2016 Park Water General Rate Case (GRC)
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
- 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
- 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 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.
See the CPUC Proceedingdocket.