2016 Park Water General Rate Case (GRC)

Background

Park Water Company’s Central Division consists of three separate water systems in southeastern Los Angeles County serving approximately 27,300 customers in the Cities of Willowbrook, Compton, Lynwood, Bellflower and Norwalk.
 

On January 2, 2015, Park Water Company’s Central Basin Division submitted its Application to the CPUC requesting authorization to increase rates for water service over present levels:

  • 2016:  $2.9 million (8.72 %) for a total revenue requirement of $36.4 million
  • 2017:  $2.4 million (6.63%) for a total revenue requirement of $38.8 million 
  • 2018:  $1.6 million (4.08%) for a total revenue requirement of $40.4 million
  • 3-Year Cumulative Total = $6.94 million (19.43%)

Specifically, the proposed rate increase is driven by these key areas: 

  • $45.3 million in Capital Additions 
  • $  7.8 million in Purchased Water Expenses
  • $  7.2 million in Operation & Maintenance Expenses except Purchased Water Expenses 
  • $  8.2 million in Administrative and General Expenses
  • $  4.4 million in Taxes  

 

ORA Position

ORA performed an in-depth review of Park Water's Application and makes the following recommendations for revenue increases:

  • 2016: $621,470 or 1.87% 
  • 2017: $760,000 or 2.24% 
  • 2018: $590,000 or 1.70%
  • 3-Year Cumulative Total = $1.97 million

ORA's analysis shows that Park Water has over-estimated its revenue needs in the areas of Capital Improvement Projects, Operation & Maintenance, and Administrative & General Expenses.

ORA’s recommendation for a smaller increase in service rates is offset by ORA’s recommendation that Park Water should use a lower water consumption forecast, given the Governor’s Order to significantly increase water conservation. Lower water consumption will result in the collection of less revenue from customers, which means that Park Water will need additional revenue to cover its fixed costs required to run its utility operations and reliably serve customers' water needs.

Additionally, ORA believes Park’s request of $45.3 million for its 2016 - 2018 capital project expenditures are too aggressive given that nearly half of Park’s service area is comprised of residential customers on the low income assistance program. Accordingly, ORA recommends that the CPUC approve a more moderate $26.7 million for capital expenditures, which is a 41% reduction compared to Park’s request.

See ORA's May 6, 2015 Testimony in response to Park Water's Application.

See ORA’s February 5, 2015 Protest to Park Water’s GRC Application.


Proceeding Docket 

See the CPUC Proceedingdocket.

 

 

Other Resources

Archives

2013 Park GRC