Monterey Wastewater

Rate Application 2009 - 2011

2

Setting Your Rates: A 20 month process

• WW Schedule:• Initial proposal filed November 30, 2007• Final Application filed January 30, 2008• Public hearings in Monterey May 28 & 29, 2008• DRA Report on their findings and review August 2008• Evidentiary hearings October 2008• Proposed Decision by Administrative Law Judge April 2009• Final Decision by CPUC Commissioners in June 2009• Final rates effective July 2009

*DRA= Division of Ratepayer Advocates, an independent entity of the CPUC

3

Filings for a Sustainable System

• Current GRC + General Office January 30, 2008For rates in 2009 - 2011

• Rate of Return May, 2008 • Next GRC + General Office May, 2010

For rates in 2012 - 2014

• San Clemente Dam Total Cost Recovery Future • Coastal Water Project EIR & CPCN On-going review• CWP Total Cost Recovery Future

– Monterey Customers currently pay for Coastal Water Project preconstruction costs through a surcharge on the bill

4

History

• In 2003, California American Water acquired Las Palmas Ranch, Laguna Seca Ranch and Village Greens, White Oaks, Carmel Valley Ranch from Monterey County through competitive bid process

• In 2004, California American Water acquired Spreckles, Oaks Hills and Indian Springs from Watertek Systems

• First General Rate Increase proposed for systems since the acquisitions

5

Map of Wastewater Service Area

6

Customer Service Area

• Las Palmas Ranch - 1,041 customers• Laguna Seca Ranch – 219 customers• Village Greens – 22 customers• White Oaks – 38 customers• Carmel Valley Ranch - 250 customers• Indian Springs - 175 customers• Oak Hills - 483 customers• Spreckels - 200 customers

TOTAL Wastewater Customers = 2,428

7

Wastewater Systems At-A-Glance• Regulated by California Public Utilities Commission and State Water

Resources Control Board

• 2,428 customers in 8 systems

• 98.2% residential customers

• Customers are billed flat rate

• 230,000 feet of sewer mains

• 926 manholes

• Systems are geographically diverse – miles apart

• Treat 462,000 gallons per day of sewage

• Various sophisticated treatment technology utilized

• All sewage effluent water land applied except White Oaks and Village Green

• 8 full-time employees

• Propose to add 2 full time employees in this rate case

8

Proposed Revenue Increase108% overall increase from 2008, due to compounding

Year Percent Increase$ Proposed

Revenue

2009 83.47% $1,387,600

2010 6.32% $195,400

2011 6.40% $212,800

Customers have different % increase (87% - 196%)

depending on system location

9

Major Drivers of the Increase

• Propose to have same rates for all sewer customers regardless of system

• Rates kept artificially too low during acquisition phase of the systems (5 years)

• Proposed rates in 2009-2011 represent actual costs to operate wastewater systems

• Investing over $4 million for needed capital improvements

• Propose adding 2 additional employees

10

Proposed Monthly Rates

Area Current 2009 2010 2011 % Increase

Las Palmas $56.57

$94.00 $99.94 $106.25

87%

Laguna Seca Ranch$56.57 87%

Village Greens $56.57 87%

White Oaks $56.57 87%

Carmel Valley Ranch

$56.57 87%

Indian Springs $49.21 116%

Oak Hills $39.93 166%

Spreckels $35.93 196%

11

Contacting the Commission

California Public Utilities Commission

Public Advisor’s Office

505 Van Ness Avenue

San Francisco, California 94102

1-866-849-8390 (toll-free)

(415) 703-2074

Email: public.advisor@cpuc.ca.gov

Case Numbers: A.08-01-027; A.07-12-010

May 29 - CPUC Public Participation Hearing – 2pm & 6pm

Monterey City Hall, Pacific & Madison, Monterey

Application available for download at: www.amwater.com