CC SR 20210601 09 - Cal Water 2022 Rate Case
CITY COUNCIL MEETING DATE: 06/01/2021
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to authorize a representative to participate on behalf
of the City as a party in the Cal Water 2022 California Public Utilities Commission Rate
Case.
RECOMMENDED COUNCIL ACTION:
(1) Authorize the City Manager, or designee, to serve as a party in a proceeding for
the California Water Service Company’s (Cal Water’s) Cost of Capital Application
with the California Public Utilities Commission (CPUC), seeking general
increases in water service rates; and
(2) Direct Staff to serve and file a Motion for Party Status in the Application
Proceeding (Application 21-05-002).
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: McKenzie Bright, Administrative Analyst
REVIEWED BY: Karina Bañales, Deputy City Manager
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Notice of Availability of Cost of Capital Application Filed by California
Water Service Company (U-60-W) (page A-1)
B. Draft of Motion for Party Status (page B-1)
C. May 12, 2021 City Letter to CPUC Commissioners and Cal PA Director
(page C-1)
BACKGROUND AND DISCUSSION:
On December 3, 2020, the California Public Utilities Commission (CPUC) approved the
California Water Service Company (Cal Water) 2020 General Rate Case, impacting
customer bills in the Palos Verdes water system beginning in February 2021.
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Cal Water establishes the cost of capital and receives approval for rate increases from
the CPUC every three years. Rate increases are also reviewed by the California Public
Advocates Office (Cal PA), an independent organization within the CPUC that
advocates on behalf of utility ratepayers.
At the City Council meeting on April 20, 2021, Cal Water representatives provided a
presentation providing background for the significant rate increases seen in Palos
Verdes water bills. As a result of the Palos Verdes Peninsula Water Reliability Project,
as well as routine costs associated with acquiring, maintaining, and providing water to
Palos Verdes residents, residential ratepayers’ service charges increased by 50%, and
tier usage rates increased by 5% for Tier 1, 23% for Tier 2, and 55% for Tier 3.
On May 12, 2021, after direction from the City Council, Staff sent a letter to the CPUC
Commissioners and Cal PA Director (Attachment C), expressing concerns over the
substantial increase in service charges and making recommendations to alleviate rate
increases, including transitioning cost burden from service charge to tier usage, creating
additional water rate tiers, and providing enhanced transparency of tier assignment .
The City received notice on May 20, 2021, that Cal Water filed its Cost of Capital
Application with the CPUC, seeking general rate increases for the period from January
1, 2022, through December 31, 2024. The proposed increase for Palos Verdes, for a
customer with average water usage and a 5/8” by 3/4" meter, is $0.72, or 0.7%
(Attachment A).
At the April 20 meeting, the City Attorney advised the Council that the City could
participate in the rate case as a formal party. With Cal Water’s application, the City may
now apply to be a party in a proceeding.
A Party is a person or organization that is formally and directly involved in the decision -
making process. Participating as a formal party in a CPUC proceeding is the best way
to influence decisions. A party has the right to present evidence and w itnesses, obtain
information from other parties, and file relevant motions, petitions, objections, and
briefs.
Parties must, among other requirements, demonstrate that their perspective will be
relevant to the proceeding’s issues. Party status may be granted by the CPUC after
filing a motion to become a party, filing a petition or complaint, filing a protest or
response to an application or petition, or entering an appearance at a pre-hearing
conference or hearing.
In order to participate as an advocate for Rancho Palos Verdes ratepayers and to
ensure they are receiving safe and reliable water service at low ratepayer costs, Staff
recommends the City Council authorize the City Manager, or designee, to become a
party in a proceeding for Cal Water’s 2022-2024 rate increase, to advocate on behalf of
residents, and direct Staff to serve and file a Motion for Party Status, as drafted, or with
revisions.
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ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council’s consideration:
1. Take other action, as deemed appropriate.
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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of CALIFORNIA WATER
SERVICE COMPANY (U-60-W), a California corporation,
for for Authority to Establish its Authorized Cost of
Capital for the period from January 1, 2022 through
December 31, 2024.
Application 21-05-002
Filed May 3, 2021
NOTICE OF AVAILABILITY OF COST OF CAPITAL APPLICATION
FILED BY CALIFORNIA WATER SERVICE COMPANY (U-60-W)
On May 3, 2021, California Water Service Company (“Cal Water”) filed its Cost of
Capital Application with the California Public Utilities Commission (“Commission”). You
are receiving this notification pursuant to Rule 3.2(b) of the Commission’s Rules of
Practice and Procedure (“Rule”).1
In its Application, Cal Water is seeking general increases in rates as shown in the
tables that follow. Water rates adopted as a result of this application will go into effect
no sooner than January 1, 2022. You may obtain the application and associated public
attachments on the Commission’s website at
https://docs.cpuc.ca.gov/SearchRes.aspx?DocFormat=ALL&DocID=381473547 or by
contacting the Cal Water Rates Department at RatesHelp@calwater.com or 408-367-
8200. For more information about Cal Water, see https://www.calwater.com/.
1 Rule 3.2(b) states: “Applicants for authority to increase rates shall, within 20 days after filing the application with
the Commission, serve notice to the following stating in general terms the proposed increases in rates or fares: (1)
the Attorney General and the Department of General Services, when the State is a customer or subscriber whose
rates or fares would be affected by the proposed increase; (2) the County Counsel (or District Attorney if the
county has no County Counsel) and County Clerk, and the City Attorney and City Clerk, listed in the current Roster
published by the Secretary of State in each county and city in which the proposed increase is to be made effective;
and (3) any other persons whom applicant deems appropriate or as may be required by the Commission.”
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M209/K618/209618807.PDF
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Average Residential Bill Impact (for a 5/8” x 3/4” Water Meter)
District/Region Avg Usage
(CCF*)
2021
Current Bill
2022
Proposed Bill
Amount
Change ($)
Percent
Change
Bakersfield 15 $46.02 $46.31 $0.29 0.6%
Bay Area Region 7 $62.38 $62.72 $0.34 0.5%
Bear Gulch 11 $95.90 $96.60 $0.70 0.7%
Chico 12 $34.22 $34.46 $0.24 0.7%
Dixon 9 $73.21 $74.16 $0.95 1.3%
Dominguez 9 $51.08 $51.31 $0.23 0.5%
East Los Angeles 10 $65.53 $66.01 $0.48 0.7%
Hermosa Redondo 8 $48.95 $49.17 $0.22 0.4%
Kern River Valley 4 $75.81 $76.20 $0.39 0.5%
Livermore 10 $62.88 $63.22 $0.34 0.5%
Los Altos 13 $87.67 $88.14 $0.47 0.5%
Los Angeles County Region –
Antelope Valley 10 $69.69 $69.95 $0.26 0.4%
Los Angeles County Region –
Palos Verdes 15 $106.48 $107.20 $0.72 0.7%
Marysville 8 $47.63 $47.98 $0.35 0.7%
Oroville 8 $47.82 $48.13 $0.31 0.6%
Salinas Valley Region 9 $46.74 $47.16 $0.42 0.9%
Selma 13 $42.83 $43.13 $0.30 0.7%
Stockton 9 $52.11 $52.48 $0.37 0.7%
Travis Flat $163,932.64 $164,588.37 $655.73 0.4%
Visalia 13 $27.11 $27.27 $0.16 0.6%
Willows 10 $64.49 $65.09 $0.60 0.9%
Westlake 14 $85.76 $86.04 $0.28 0.3%
*CCF stands for 100 cubic feet. One CCF is equal to 748 gallons.
Proposed Revenue Increases Dollars
(in thousands) Percentage
Bakersfield $512.9 0.6%
Bay Area Region (formerly Bayshore and Redwood Valley) $497.3 0.5%
Bear Gulch $421.9 0.7%
Chico $180.9 0.7%
Dixon $56.0 0.9%
Dominguez $331.6 0.5%
East Los Angeles $281.2 0.7%
Hermosa Redondo $156.2 0.5%
Kern River Valley $52.1 0.7%
Livermore $141.2 0.5%
Los Altos $227.8 0.5%
Los Angeles Region - Antelope Valley $7.2 0.4%
Los Angeles Region - Palos Verdes $418.5 0.7%
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Proposed Revenue Increases Dollars
(in thousands) Percentage
Marysville $31.3 0.7%
Oroville $35.3 0.6%
Salinas Valley Region (formerly King City and Salinas) $339.0 0.9%
Selma $40.3 0.7%
Stockton $395.3 0.7%
Visalia $173.0 0.6%
Willows $31.2 0.8%
Westlake $70.8 0.3%
Travis $7.6 0.4%
TOTAL $4,408.7 0.6%
Dated: May 20, 2021
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BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA
MOTION FOR PARTY STATUS OF THE CITY OF RANCHO PALOS
VERDES
William Wynder
Aleshire & Wynder, LLP
For the City of Rancho Palos Verdes
1881 Von Karman Ave., Suite 1700
Irvine, CA 92612
Tel: 310-527-6667
E-mail: wwynder@awattorneys.com
[Date of when motion served and filed]
Application of California Water Service
Company (U-60-W), a California
corporation, for the Authority to Establish
its Authorized Cost of Capital for the
period from January 1, 2022 through
December 31, 2024.
Application 21-05-002
(Filed May 3, 2021)
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BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA
MOTION FOR PARTY STATUS OF THE CITY OF RANCHO PALOS
VERDES
I. Introduction
The City of Rancho Palos Verdes (“City”), respectfully moves for party status in this
proceeding in accordance with Section 1.4 of the California Public Utilities Commission
(“Commission”) Rules of Practice and Procedure.
II. Interest in this Proceeding
The City of Rancho Palos Verdes is a general law city, located in Los Angeles County on
the Palos Verdes Peninsula, with water service for all customers within the City provided by the
California Water Service Company (Cal Water).
A. The City requests party status in this proceeding to ensure the CPUC is informed of
the interests of the City, and all its citizens, that may be affected by this proceeding, and to
ensure the City has adequate notice and opportunity to respond to issues, claims and arguments
that may be raised by any party in the course of this proceeding.
B. The City has a direct interest in protecting its constituents by ensuring continuation of
the most cost-effective and deliverable water supplies. In addition, the City has a direct interest
in ensuring the various components of the overall water supply system on the Palos Verdes
Peninsula are effective and adequately reflect the public’s needs and wishes. To these ends, the
Application of California Water Service Company
(U-60-W), a California corporation, for the
Authority to Establish its Authorized Cost of
Capital for the period from January 1, 2022
through December 31, 2024.
Application 21-05-002
(Filed May 3, 2021)
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City promotes a full and balanced consideration of perspectives and a comprehensive analysis of
cost-effective service.
In accord with Rules 1.4(b), the City has information useful and pertinent to the
Commission in this proceeding.
III. Notice
Service of notices, orders, and other correspondence in this proceeding should be directed
to the City at the address set forth below:
Ara Mihranian
City Manager
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, CA 90275
Tel: 310-544-5202
E-mail: aram@rpvca.gov
William Wynder
Aleshire & Wynder, LLP
1881 Von Karman Ave., Suite 1700
Irvine, CA 92612
Tel: 310-527-6667
E-mail: wwynder@awattorneys.com
IV. Conclusion
The City’s participation in this proceeding will not prejudice any party and will not delay
the schedule or broaden the scope of the issues in the proceeding. For the reasons stated above,
The City of Rancho Palos Verdes respectfully requests that the CPUC grant this Motion for Party
Status filing.
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Dated: [date of when motion served and filed] Respectfully submitted,
/s/ _________________
William Wynder
Aleshire & Wynder, LLP
For the City of Rancho Palos Verdes
1881 Von Karman Ave., Suite 1700
Irvine, CA 92612
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May 12, 2021 Via Email
The Honorable Marybel Batjer and Commissioners
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Elizabeth Echols, Director
Public Advocates Office
505 Van Ness Avenue
San Francisco, CA 94102
SUBJECT: Rancho Palos Verdes Concerns Over Cal Water Rates for Residential
Ratepayers
Dear President Batjer, CPUC Commissioners, and Director Echols,
On behalf of the residents and City Council of the City of Rancho Palos Verdes, I am
writing to express our concerns over the recent substantial increase in service charges
for residential ratepayers imposed by the California Water Service Company (Cal
Water) in the Palos Verdes service area of the Rancho Dominguez District.
On December 3, 2020, the California Public Utilities Commission (CPUC) approved Cal
Water’s General Rate Case for 2020-2022, and residents began seeing the related
increases to their water bills during the February billing cycle.
The approved rate increase incorporated the fees associated with Cal Water’s recently
completed $96 million Palos Verdes Peninsula Water Reliability Project. This project
added seven miles of new drinking water pipeline for customers on the Palos Verdes
Peninsula and added a new pump station. As a result, customers’ service charges
increased by 50%, and tier usage rates increased by 5% for Tier 1, 23% for Tier 2, and
55% for Tier 3.
While the City appreciates the work by the CPUC and the Public Advocates Office (Cal
PA) to review, analyze, and approve the recent Cal Water General Rate Case, we are
concerned that the substantial increase in service charges unfairly penalizes customers
for the readiness-to-service charge. Of particular concern to residents is the significant
service charge associated with a 1” meter. Residents in Rancho Palos Verdes most
likely did not have a choice in their meter size and may not have considered the
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President Batjer, CPUC Commissioners, and Director Echols
May 13, 2021
Page 2
financial implications of having a larger meter. We would therefore like to formally
express our concerns over the substantial increase in water bill rates, on behalf of
Rancho Palos Verdes ratepayers.
The City recognizes that the rate setting process has ended, and that Cal Water
anticipates starting its 2023-2025 General Rate Case in the summer. The City
anticipates participating in this process as an intervenor to better protect the interests of
Rancho Palos Verdes ratepayers.
We understand that many considerations go into approving new rates for private utility
companies, and appreciate the time, effort, and advocacy that occurred as part of the
2020-2022 General Rate Case. As the new cycle begins for Cal Water, we encourage
the CPUC and Cal PA to reevaluate how costs like the Palos Verdes Water Reliability
Project are borne by residential ratepayers.
To that effect, for the next rate increase hearings, we propose the following
recommendations aimed at alleviating the significant rate increase associated with the
completion of the Palos Verdes Peninsula Water Reliability Project for residential
ratepayers:
• Transition of cost burden from service charges to tier usage. Transitioning some
of the service charge cost to the tier usage may help encourage conservation
and minimize financial penalties to residents with a 1” meter.
• Expansion of water rate tiers – increasing the number of tiers from three to five
for single-family residential customers may provide a more equitable distribution
of recovery costs for the Palos Verdes Peninsula Water Reliability Project based
on a ratepayer’s water usage.
• Enhanced transparency regarding tier assignments and establishment of a tier
reclassification process that is tied to a customer's individual annual water usage.
Thank you for your continued efforts to ensure Californians’ access to safe and reliable
utility infrastructure and services at low ratepayer costs. We understand that the
recently approved Cal Water General Rate Case underwent a rigorous review process,
but we, on behalf of Rancho Palos Verdes ratepayers, believe there may be other rate
options available to distribute the costs of the Palos Verdes Water Reliability Project
more equitably across ratepayers, while promoting conservation efforts.
The City looks forward to being an intervenor and active participant in the next Cal
Water General Rate Case cycle, to ensure that Rancho Palos Verdes residents have
safe, reliable, and low-cost water.
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President Batjer, CPUC Commissioners, and Director Echols
May 13, 2021
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Sincerely,
Eric Alegria
Mayor, City of Rancho Palos Verdes
cc: Rancho Palos Verdes City Council
Ara Mihranian, City Manager
Karina Bañales, Deputy City Manager
Angie Gilbride, Cal Water Regional Community Affairs
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