Proposed decision issued in AV Ranchos Water rate

Administrative Law Judge recommends against $15 million in requested costs

It appears the Town of Apple Valley has been successful in limiting the damage to ratepayer pocketbooks from higher-than-justified rates requested by Apple Valley Ranchos (AVR), according to a proposed decision by an administrative law judge of the California Public Utilities Commission (CPUC) in the pending water rate case.

Although water rates are recommended to increase, the increases will be lower than the rate increases requested by AVR because the proposed decision does not authorize AVR’s requests for a new office costing approximately $4 million, its Bell Mountain storage tank costing $2.3 million and its Stoddard tank costing $2.35 million. In addition, the town’s objections to ratepayer bill impacts are reflected in the proposed decision because it lowers AVR’s main replacement budget from $16.7 million over three years to $9.4 million.

“If the town had not intervened in this case, AVR would have added more than $15 million to its cost that would have been paid by the citizens of Apple Valley,” said Town Manager Frank Robinson.

In January 2014, AVR submitted rate increase requests of 31.55 percent over three years. If the CPUC approves this proposed decision, in 2015 the average residential customer will see an increase of 9.85 percent — an increase in the average monthly bill from $65.37 per month to $71.81 per month, or $6.44.

AVR had requested a rate increase of 14.88 percent the first year.

The proposed decision also notes that AVR exceeded what it was authorized to spend on water main replacements in 2012 and 2013 and notes that no future spending above authorization will be recoverable in rates unless AVR can demonstrate the need to the CPUC.

Finally, the Town also asked for and received a level pay plan for ratepayers who have been AVR customers for a year or more.

Robinson noted this is the first time the Town has participated in a CPUC settlement conference on behalf of the ratepayers and the Town’s efforts, along with its briefing on litigated issues, has certainly paid off.

The CPUC decides how much private utility companies such as AVR are allowed to raise rates. It holds hearings on the justification for rate increases and, in this case, heard from the Town of Apple Valley, which argued that the rate increases would help AVR pay for items that the citizens should not be paying for. The CPUC agreed with many of the Town’s arguments in its proposed decision.

Both parties have 20 days to comment on the proposed decision, and then another five days to reply to any comments made by the other side, before it is taken up by the full Commission for final ruling.