SCWC seeks another rate increase
By Kelly Feser Eells

It's déjà vu all over again for Southern California Water Company's nearly 3,000 Ojai-area customers: SCWC filed an application with the California Public Utilities Commission on Nov. 4, 2002, requesting the latter agency's authority to again increase water rates.

The application asks for a 29.72 percent (approximately $20 million dollars) increase in the year 2003; a 7.31 percent increase ($6,327,800) in the year 2004; and a 6.81 percent increase ($6,326,200) in the year 2005 for its "Region III Service Area, and increased rates for the general office allocation in all of its customer service areas" - including Ojai, which is one of four CSAs served by the company's Coastal District, Region I. Ojai's share of the proposed rate increase breaks down to $108,000 for 2003, and nearly $55,000 in both 2004 and 2005.

If the application sounds familiar, it should. SCWC sought, and subsequently received, a 27 percent rate increase in 1998 to be spread out over three years' time.

Roland Tanner, SCWC's manager of regulatory affairs, confirmed that the company applies for general rate increase request every three years, and that, "even though Ojai isn't part of our Region III (the primary customer base), we are requesting a general rate increase for all of our districts under the provisions of the general office allocation, filed as a separate entity."

The allocation, per Tanner, relates to general office overhead - accounting, technological improvements, customer service - "all of the departments that apply" to the general operating costs of providing water to 75 communities (or, as parent company, American States Water, reports, one in 30 Californians.)

Tanner explained that the separate filing is necessary, "otherwise, we would never recover" from the ever-increasing general office expenses incurred by each district - and absorbed by SCWC's corporate office.
Pursuant to SCWC's application, the CPUC held three public participation hearings, inviting public comment. The hearings were held on April 28, 29 and 30, in Claremont, Stanton, and Barstow, respectively. Asked why the CPUC - whose policy is to hold public meetings that are accessible to everyone - conducted these hearings in cities a minimum of 100 miles away from Ojai, Tanner said, "We were told that, due to the state's budget crisis, there would be a limited number of meetings held" on such applications.

"To my knowledge, no one from the Ojai district was in attendance at these meetings," said Tanner, acknowledging the fact that the city of Ojai will, however, receive any official documentation related to such.
The city, just as it had in 1998, took issue with SCWC's proposed rate hike, and has asked CPUC for the right to intervene.

David Fukutome, administrative law judge assigned to the proceeding, wrote, "I received a letter dated February 26, 2003, from the city of Ojai, requesting copies of all documents filed in this application and asking that it be included on the list of interested parties. In this application, while not subject to the entire general rate case analysis, the Ojai CSA is impacted by SCWC's proposal to increase rates for the allocation of general office costs for all customer service areas."

Fukutome further notes that, "The city of Ojai is opposed to its inclusion in this proceeding, and notes that its residents already pay a rate for their water that far exceeds that for other utilities in the region, and that the recorded rates of return by SCWC surpass Commission-authorized rates of return. The city of Ojai's request to be included as an interested party to this proceeding will be granted with the understanding that its participation will not alter this proceeding's already established scope and schedule."

That 'scope and schedule' is as follows:
May 12-16, evidentiary hearing(s); June 6, requesting parties file opening briefs; June 13, opposing parties file reply briefs; Aug. 1, proposed decision filed.

"My goal," Fukutome wrote, "is to resolve this matter as soon as possible after it is submitted. However, in no event will the resolution exceed 18 months from the date of filing this application, pursuant to Senate Bill 960, (Ch. 856, Stats. 1996) Section 12 and Rule 6(e)."
If approved, the increase is expected to go into effect in October.
Tanner assures SCWC customers that the rate increase, if approved, would not be retroactive. "We can't, by law, 'go back and collect' rates," he said. "The new rates would go in effect five days after whatever date the ruling is made."

In February, American States Water Company President Floyd Wicks told Business Wire magazine that, "We're pleased by recent decisions issued by the CPUC that increased water rates by approximately $6.2 million annually at our SCWC unit. We have also filed general rate increases with the CPUC that will provide for additional revenues in late 2003 and in 2004."

Total revenues for 2002 increased by 5.9 percent, to $209.2 million as compared to $197.5 million reported in 2001, " due to the full impacts of various rate increases effective during 2001 at its SCW unit. The reported results," said Wicks, "underscores management's emphasis on achieving positive results for shareholders and customers alike."

The Office of Ratepayer Advocates and the Orcutt Area Advisory Group (part of SCWC's Santa Maria customer service area) have filed protests to the application. Also, Fukutome has received formal letters of opposition from the cities of San Dimas and Claremont.

Individual complaints and/or concerns may be submitted in writing to the ORA, CPUC Consumer Affairs Branch, 505 Van Ness Ave., San Francisco, CA 94102; refer to Application No. 02-11-007 in any correspondence.

The email address is consumer-affairs@cpuc.ca.gov.
Roland Tanner may be reached at 909-394-3600, extension 712.

© 2003 The Ojai Valley News

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