Apple Valley Ranchos Water Company
2012 General Rate Case

Background

On January 3, 2011 Apple Valley Ranchos Water Company (AVR) filed a general rate case Application proposing a revenue increase for 2012 of more than $3.8 million (a 20% increase).

In September 2012, the Commission issued a Decision adopting a partial party settlement that resulted in a $2.9 million rate increase for 2012 - or 14.7%, as well as resolving remaining disputed issues related to employee benefits, a Pressure Reducing Valve Memorandum Account, and new building space. The decision approved most of AVR’s requests, but capped its office expansion costs to $702,000. The revenue requirement for escalation in 2013 and 2014 must be based on approved inflation factors at that time.

ORA’s Policy Position

ORA actively supported the partial settlement that significantly reduced AVR’s revenue increase request. The Commission’s Decision agreed with ORA’s recommendation that no contingency was necessary regarding the Carlyle transaction because there is no evidence that this transaction would not be completed. However, the Commission declined to incorporate ORA’s recommendations to reject AVR’s requests for:

  • 3 new employees, merit increases, bonuses, and employee benefits because the utility had failed to justify need.
  • A Pressure Reducing Valve Memorandum Account because the costs are undefined and there are no specific proposed project plans.
  • Office expansion because AVR did not adequately justify the need for additional space and has not provided a well-defined plan and a valid cost estimate.

See ORA’s September 29, 2011 Opening Brief on remaining disputed issues.

See ORA’s May 10, 2011 Results of Operations Report that forecasts AVR’s revenues, expenses, and capital expenditures. DRA’s Report recommended a revenue increase of only $1.1 million (a 5.7% increase).

 

Proceeding Status

See the Proceeding docket.