Monterey Wastewater Rate Application

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 OfficeJanuary 30, 2008 For rates in Rate of Return May, 2008 Next GRC + General Office May, 2010 For rates in San Clemente Dam Total Cost Recovery Future Coastal Water Project EIR & CPCNOn-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 customers Indian Springs customers Oak Hills customers Spreckels 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 Increase 108% overall increase from 2008, due to compounding YearPercent Increase $ Proposed Revenue %$1,387, %$195, %$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 represent actual costs to operate wastewater systems Investing over $4 million for needed capital improvements Propose adding 2 additional employees

10 Proposed Monthly Rates AreaCurrent % Increase Las Palmas$56.57 $94.00$99.94$ % Laguna Seca Ranch$ % Village Greens$ % White Oaks$ % Carmel Valley Ranch $ % Indian Springs$ % Oak Hills$ % Spreckels$ %

11 Contacting the Commission California Public Utilities Commission Public Advisor’s Office 505 Van Ness Avenue San Francisco, California (toll-free) (415) Case Numbers: A ; A May 29 - CPUC Public Participation Hearing – 2pm & 6pm Monterey City Hall, Pacific & Madison, Monterey Application available for download at: