Suburban Water Systems
2015 General Rate Case

Background 

Suburban serves about 76,000 water customers in the San Jose Hills and Whittier/La Mirada service areas. On February 24, 2014, Suburban Water Company filed a general rate case Application with the CPUC, proposing to increase its customer rates for 2015 – 2017:

  • 2015: $8.93 million (or 13.37%) increase
  • 2016: $3.21 million (4.32%) increase
  • 2017: $2.72 million (3.51%) increase
  • Total: Cumulative $14.86 million increase over 3 years

Suburban's initial proposal would have increased monthly bills for an average residential customer by $10.28 for San Jose Hills and $7.41 for Whittier/La Mirada.

A Public Participation Hearing was held on July 16, 2014 in West Covina.
On September 10, 2014, ORA and Suburban filed a proposed Settlement Agreement which would adjust customer rates for 2015 – 2017:

  • 2015: $6.75 million (or 9.84%) increase
  • 2016: $2.32 million (3.07%) increase
  • 2017: $2.09 million (2.68%) increase
  • Total: Cumulative = $11.16 million increase over 3 years

The proposed Settlement would increase an average residential customer’s bill by $7.52 for San Jose Hills and $5.47 for Whittier/La Mirada in 2015. If approved by the CPUC, the Settlement would resolve all but one disputed issue related to Suburban’s recovery of regulatory expenses.
The proposed Settlement is pending before the CPUC.

 

ORA’s Policy Position

ORA’s analysis shows that Suburban over-estimated its revenue needs by 45% in the areas of operations and administrative expenses, infrastructure, and forecast of water sales. ORA supports the Settlement because it fairly reduces Suburban’s original requested rate increase, but still allows Suburban to continue to provide safe and clean water service in an efficient and cost-effective manner. The CPUC’s adoption of the Settlement would reduce Suburban’s revenue requirement increase by nearly $2.2 million, or 24.4%, compared to Suburban’s original request of $8.9 million for 2015.

The remaining unresolved issues are related to the recovery of regulatory expenses, which will have policy implications for all other Class A Water Companies. ORA advocates that the CPUC should:

  • Shift Suburban from amortized recovery of general rate case expenses to recovery of forecasted expenses for a future general rate case.
  • Not allow Suburban to recover double the amount of regulatory expenses for the current general rate case cycle.

If a shift from amortized recovery of general rate case expenses to recovery of forecasted expenses for a future year is authorized, the CPUC should:

  • Not allow recovery of double the amount of regulatory expenses for the 2015 General Rate Case cycle.
  • Allow recovery of the catch-up allowance over no less than six years.  

See ORA's June 23, 2014 amended Testimony.

See ORA’s March 28, 2014 Protest

 

Current Proceeding 

See the Proceeding docket.

 

Other Resources

2012 Suburban General Rate Case Archive