Liberty Utilities surcharge approved (March 18, 2016)

CPUC OKs 43 cent-per-CCF request

APPLE VALLEY — The California Public Utilities Commission approved a request this week made by Liberty Utilities, Apple Valley — formerly Apple Valley Ranchos — to recover nearly $3 million in revenue lost between January and November of 2015 with a temporary surcharge.

The 43 cent-per-CCF (100 cubic feet of water) surcharge will go into effect March 25, according to a letter sent by the CPUC to Town Manager Frank Robinson, and will stay in effect for almost two years.

Steve Lambert of the 2020 Network — the town’s public relations firm — told the Daily Press the average water user will see an increase of approximately $90 for the year.

(The approval allows) Liberty to collect approximately $2.9 million in revenue from Apple Valley customers because it took the CPUC 11 months to grant (Liberty) their latest (rate) increase, Lambert said via email. Liberty now is able to make the water rates retroactive to the day they first asked for the rate increases … and not on the day they were granted.

Liberty Utilities General Manager Tony Penna previously told the Daily Press that the state-mandated water conservation regulations had an effect on the surcharge request.

Our rates are calculated based on the total cost of providing service and the anticipated water use for the entire 2015 year, Penna said in a statement, but because of the emergency drought regulations that went into effect last year, the decision on our rates was delayed until (last) November to take into account our statemandated 28 percent water use reduction.

Rates authorized by the CPUC were based on reduced water usage, according to Penna, but the final decision was delayed until late in the year.

The result was that the money collected was well below our cost to provide reliable high quality water service, he added. This surcharge will be spread over 21 months — rather than over the 11 months when the service was originally provided — and the charge will drop off bills after that time.

In response, the town equated Liberty’s surcharge request to residents showering once, but paying twice.

Bear in mind, the town said in a statement released in February, these ‘backcharges’ are in addition to the increases approved by the CPUC going forward. So now you will be required to pay new, higher rates for what water you use now. And more for water that you used a year ago.

Liberty initially filed an advice letter with the CPUC’s Division of Water and Audits in February that requested the recovery of $2.9 million through a 21-month surcharge of nearly $0.46, DWA Program Manager Bruce DeBerry said in the letter to Robinson.

On March 2, a second advice letter was filed by the company to correct two errors in its initial calculations that excluded uncollectible and franchise expenses, which lowered the requested surcharge to $0.43, but added half a month to the 21-month surcharge collection period.

The total amount Liberty will recover through the collection period is $2,929,576, according to DeBerry’s letter. The town filed a protest with the CPUC related to the surcharge request, but the CPUC’s approval meant a rejection of that protest.

Source: Matthew Cabe, Daily Press