Valencia Water Company
2014 General Rate Case (GRC) and Cost of Capital

Background

In January 2013 Valencia Water filed its Application with the CPUC requesting approval to:

  • Increase rates from 2014 – 2016: 
    • 2014: 15.97% increase
    • 2015:   2.93% increase
    • 2016:   4.23% increase
     
  • Significantly increase costs through Payroll, Outside Services, State and Federal taxes, and Conservation expense.

Valencia simultaneously filed an Application to establish its authorized Cost of Capital for the same period, which sets the rates at which Valencia can earn a profit. Valencia and DRA proposed a stipulation that would reduce Valencia’s authorized rate of return from the 8.28% to 7.20%, potentially saving Valencia ratepayers over $400,000 annually.

In December 2012 Castaic Lake Water Agency (CLWA), a public water wholesaler, acquired all of Valencia Water Company’s stock via an Eminent Domain Settlement Agreement that resolved a previous CLWA action to acquire Valencia Water through eminent domain. Valencia did not submit an official request to the CPUC for approval to transfer ownership of the company as required by Public Utility Code 851, which could void the transaction. The CPUC has ordered Valencia and CLWA to file an 851 Application by Feb 14, 2013, which will address the transfer of control of the utility from the currently authorized owners to the Castaic Lake Water Agency.

Subsequently, the Santa Clarita Organization for Planning The Environment and Friends of The Santa Clarita River filed a Complaint Case with the CPUC to investigate CLWA’s acquisition of Valencia, which according to the Complaint violates numerous sections of the California Public Utilities Code.

A public hearing was held in Valencia on May 16, 2013.   

 

DRA Policy Position

DRA recommends that the CPUC should consolidate Valencia’s GRC and Cost of Capital cases in order to allow related issues to be reviewed and heard for consistency and streamlining in CPUC procedural forums. DRA also urges the CPUC to open an Investigation to address concerns raised in the Complaint Case regarding the acquisition of Valencia.

DRA will address the specific merits of Valencia’s GRC requests after completing its discovery and analysis and serving its Testimony, anticipated in the 2nd quarter of 2013. 

See DRA’s February 6, 2013 Protest.

 

Proceeding Status

The Proceeding docket for Valencia’s GRC.

The Proceeding docket for Valencia’s Cost of Capital.

Proceeding schedules will be set after the GRC Pre-Hearing Conference, which has yet to be scheduled.

Testimony is expected to be served by parties in the GRC in the 2nd quarter of 2013.