California Water Service Group
| The Company expects that the net effect of surcharges and surcredits will reduce revenue by approximately $2.3 million in 2006, assuming similar usage. The estimated impact of rate changes compared to the prior years is listed in the following table: | |||||||||||||||||||||||||||||||||||||
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Remaining Unrecorded
Balances from Previously Authorized Balancing Account Recoveries/Refunds
For the balancing accounts authorized in May 2004, the amount remaining
to be refunded as of December 2005 was $0.2 million and December 2004
was $0.6 million. The balance is expected to be refunded by May 2006. For the balancing accounts authorized in September 2004, the amount remaining to be collected in rates as of December 2005 was $0.2 million and December 2004 was $0.3 million. The balance is expected to be recovered by June 2006. For the balancing accounts authorized in the fourth quarter of 2004, the net amount remaining to be collected in rates as of December 2005 was $3.1 million and December 2004 was $8.3 million. The net balance is expected to be fully recovered by January 2008. For the balancing accounts authorized in September 2005, the amount remaining to be collected in rates as of December 2005 was $0.8 million. The balance is expected to be recovered by the third quarter of 2006. The total amount of unrecorded, under-collected memorandum and balancing accounts was $2.6 million and $8.5 million, as of December 31, 2005 and 2004, respectively. Included in this amount, Cal Water has pending memorandum account filings for 2005 and previously authorized balancing accounts approved for collection as stated above. Pending Filings as of February 21, 2006 Cal Water has pending its 2005 GRC filings covering eight districts. Cal Water expects decisions regarding its 2005 GRCs to be issued in the second quarter of 2006. The amount requested in the 2005 GRCs is approximately $10.6 million in 2006/2007, $5.5 million in 2007/2008, and $5.5 million in 2008/2009. The amounts granted may vary due to a variety of factors. Over the past few years, the amount approved by the CPUC has been substantially less than the requested amount. The GRCs also requested the CPUC to consider several modifications to CPUC rate-setting procedures. The GRCs request a water revenue adjustment mechanism that would allow the Company to recover (refund) water revenues when actual water sales are below (above) adopted water sales in the GRCs. This proposal would decouple the Company’s revenues from conservation efforts and inaccurate weather forecasts, putting in place a mechanism similar to that employed by California’s investor-owned electric utilities. The GRCs also request a full-cost balancing account that would allow the Company to recover changes in source of supply mix as well as price changes under current procedures. The Company requested a rate base equalization account to minimize the impact on rates of large capital projects in small water systems. Finally, the Company requested that the Commission adjust its authorized rate of return if modifications are not adopted to change certain rate-setting procedures. The Company is unable to predict the timing and final outcome of the filings at this time. 2006 Regulatory Activity In accordance with the rate case plan, Cal Water will file a GRC for eight districts in May of 2006. At this time, Cal Water does not know the amounts to be requested. In January 2006, the Company was granted step rate increases for 13 districts and was authorized an increase of $1.9 million. In February 2006, Cal Water received authorization to recover (refund) various balancing and memorandum accounts. Memorandum account decision AL1734A will be collected over a 36-month period. Cal Water also intends to file for step rate increases in July for eight districts. Cal Water is authorized to request up to $5.5 million; however, the request may be adjusted downward by the weather-adjusted earnings test. |
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