2018-2020 Cost of Capital for Large Water Utilities

Background 

In this proceeding, four of California’s largest investor-owned water utilities have requested increases in their authorized rates of return. The authorized rate of return compensates utilities for their costs of financing necessary infrastructure. The authorized rate of return takes into consideration the cost of debt, a return on investor’s equity, and the proportion of debt and equity that comprise a utility's overall capital structure. The current cost of capital proceeding will establish authorized rates of return for the 2018 through 2020 period.

 

ORA's Recommendations

 

On August 1, 2017, ORA served testimony based upon its independent analysis of the utilities’ applications. The following table compares each of the four utilities’ requests with ORA’s recommendations and calculates the approximate annual difference in customer rates that would be expected to result.

 

 ORA's Recommendations - 2018-2020 Cost of Capital for Large Water Utilities

 

See ORA’s August 1, 2017 testimony below:

 

Direct Testimony of Aaron Rothschild for ORA - Proceeding A.17-04-001 et al.

Direct Testimony of Mukunda Dawadi for ORA - Proceeding A.17-04-001 et al.  

 

 

Further Actions

A final CPUC decision is anticipated by the end of 2017. Additional information regarding this proceeding can be obtained by visiting the CPUC’s docket for this proceeding.