TOAV files protest against proposed water surcharge (May 27, 2014)

APPLE VALLEY • The town has filed a protest over a temporary surcharge proposed by Apple Valley Ranchos Water Co., calling it unjust, unreasonable and discriminatory.

The water company’s advice letter — filed with the California Public Utilities Commission on May 6 — requests a temporary surcharge of 32 cents per 100 cubic feet, or 12.97 percent over the next 18 months for residential customers, town and water company officials say.

We strongly disagree with the town’s assertion that the request is unjust, unreasonable and discriminatory, said Edward Jackson, director of revenue requirements for Park Water Co., owner of Apple Valley Ranchos.

In terms of process, we have to formally respond to their protest, and we will, he said.

Jackson said the surcharge is part of a standardized regulatory mechanism that allows the water company to recover revenue previously authorized for the previous year. He said the concept of a balancing account for annual revenue restoration to the company or credit to consumers was introduced by the CPUC in 2009. It takes into account a drop in production through water conservation and costs incurred in purchasing power to produce water, he said.

The town strongly objects to Ranchos’ efforts to request this surcharge outside of the general rate case already in process, Apple Valley Assistant Town Manager Dennis Cron said.

Jackson said the company sees the town’s objection as a protest against the commission’s rules and regulatory structure. He said it will delay a commission answer by a couple of weeks.

The town said the advice letter was filed late.

In protesting the temporary surcharge request, the town said it is unjust, unreasonable and discriminatory, a standard phrase that is used in advice-letter protests, Apple Valley spokeswoman Kathie Martin said. She said the town believes the surcharge is unjust because it applies to the lowest tier of water consumption.

The town previously filed an objection to the water company’s general rate case and has asked for changes to the billing structure and bimonthly billing cycle, Martin said.

The water company has requested rate increases of about 16 percent, 8 percent and 8 percent for 2015-17. It is unlikely the full request will be awarded by the CPUC, based on past Apple Valley Ranchos rate-hike requests and CPUC awards.

The general-rate case should be settled by about November and become effective in January.

Source: Gary Brodeur, Daily Press