DRA Report on Cal Water Redwood District Rate Case

7/30/2019 DRA Report on Cal Water Redwood District Rate Case

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Docket:Exhibit NumberCommissionerAdministrative Law JudgeDRA Project Coordinators

:::::

A.12-07-007_______________Catherine SandovalRobert MasonYoke Chan; Pat Ma

DIVISION OF RATEPAYER ADVOCATESCALIFORNIA PUBLIC UTILITIES COMMISSION

REPORT

ON THE RESULTS OF OPERATIONS

OF CALIFORNIA WATER SERVICE COMPANYREDWOOD VALLEY DISTRICT

General Rate Case Application 12-07-007

Test Year 2014

Escalation Years 2015 and 2016

For authority to increase water rates

in its Redwood Valley District serving

Guerneville, Duncan Mills, Santa Rosa, Lucerne,Dillon Beach in Sonoma, Lake and Marin counties

San Francisco, California

March 1, 2013


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MEMORANDUM

This report is prepared by theDivision of Ratepayer Advocates - Water Branch.

Senior Utilities Engineers Yoke Chan and Pat Ma serve as project coordinators, under the

supervision of Program and Project Supervisors Ting Pong-Yuen and Lisa Bilir and

Program and Project Manager Danilo Sanchez. Selina Shek and Marian Peleo serve as

DRA legal counsels in this general rate case. Listed below are DRA witnesses and their

contributions to this report.

Ch. Description DRA Witness

1 Introduction & Summary (RO tables) Yoke Chan, Pat Ma & Josefina Montero

2 Sales, Revenues & Rate Design Inderdeep Atwal

3 Operations & Maintenance Expenses Herbert Merida

4 Administrative & General Expenses Herbert Merida

5 Taxes Other Than Income Jose Cabrera

6 Income Taxes Jose Cabrera

7 Plant In Service Justin Menda

8 Depreciation Sung Han

9 Rate Base Victor Chan

10 Customer Service Toni Canova

11 Water Quality Justin Menda


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i

Division of Ratepayer Advocates

RESULTS OF OPERATIONS REPORT

REDWOOD VALLEY DISTRICT

CWS General Rate Case A.12-07-007

Table of Contents

CHAPTER 1: INTRODUCTION & SUMMARY 1-1A. INTRODUCTION 1-1B. SUMMARY OF RECOMMENDATIONS 1-1C. KEY RECOMMENDATIONS 1-2

CHAPTER 2: SALES, REVENUES AND RATE DESIGN 2-1A. INTRODUCTION 2-1B. SUMMARY OF RECOMMENDATIONS 2-1C. DISCUSSION 2-5D. CONCLUSION 2-16

CHAPTER 3: OPERATIONS & MAINTENANCE EXPENSES 3-1A. INTRODUCTION 3-1B. SUMMARY OF RECOMMENDATIONS 3-1C. DISCUSSION 3-1

1) OPERATION EXPENSES 3-22) MAINTENANCE EXPENSES 3-8

D. CONCLUSION 3-10CHAPTER 4: ADMINISTRATIVE & GENERAL EXPENSES 4-1

A. INTRODUCTION 4-1B. SUMMARY OF RECOMMENDATIONS 4-1C. DISCUSSION 4-1

1) ADMINISTRATIVE & GENERAL EXPENSES 4-22) PURCHASED SERVICES 4-3

D. CONCLUSION 4-7CHAPTER 5: TAXES OTHER THAN INCOME 5-1

A. See Chapter 5: Taxes Other Than Income in DRAs Company-Wide Report ofResults of Operations of California Water Service Company (General Rate Case

A.12-07-007) for analysis and recommendations. 5-1CHAPTER 6: INCOME TAXES 6-1A. See Chapter 6: Income Taxes in DRAs Company-Wide Report of Results of

Operations of California Water Service Company (General Rate Case A.12-07-007)

for analysis and recommendations. 6-1CHAPTER 7: PLANT IN SERVICE 7-1

A. INTRODUCTION 7-1B. SUMMARY OF RECOMMENDATIONS 7-1


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ii

C. DISCUSSION 7-71) Carryover Projects 7-72) Mains, Services and Hydrant Replacement Projects 7-83) Tank Painting Projects 7-124) Projects by Subarea 7-135) Non-specific Capital Budgets, 2012 to 2015 7-17

D. CONCLUSION 7-20CHAPTER 8: DEPRECIATION 8-1

A. See Chapter 8: Depreciation in DRAs Company-Wide Report of Results ofOperations of California Water Service Company (General Rate Case A.12-07-007)

for analysis and recommendations. 8-1CHAPTER 9: RATE BASE 9-1

A. See Chapter 9: Rate Base in DRAs Company-Wide Report of Results ofOperations of California Water Service Company (General Rate Case A.12-07-007)

for analysis and recommendations. 9-1CHAPTER 10: CUSTOMER SERVICE 10-1

A. See Chapter 10: Customer Service in DRAs Company-Wide Report of Results ofOperations of California Water Service Company (General Rate Case A.12-07-007)

for analysis and recommendations. 10-1CHAPTER 11: WATER QUALITY 11-1

A. INTRODUCTION 11-1B. SUMMARY OF RECOMMENDATIONS 11-1C. DISCUSSION 11-1

1) Armstrong Valley 11-22) Coast Springs 11-23)

Hawkins 11-3

4) Lucerne 11-35) Noel Heights 11-46) Rancho del Paradiso 11-5

D. CONCLUSION 11-5


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1-1

CHAPTER 1:INTRODUCTION&SUMMARY1A.INTRODUCTION2

This Report on the Results of Operations presents the Division of Ratepayer3

Advocates (DRA) analysis and recommendations on the operations of the Redwood4

Valley District. DRA addresses requests made in the general rate case application 12-07-5

007 (GRC A.12-07-007) filed by the California Water Service Company (CWS) in6

July 2012 for the Test Year 2014 and Escalation Years 2015 and 2016.7

DRAs team of engineers, auditors, analysts and consultants reviewed the filing,8

performed discovery and inspection of the districts facilities, and provided the detailed9analysis and recommendations in this Report. This report together with the following10

form DRAs comprehensive response to CWSs GRC application:11

Report on the General Office of CWS,12 Report on the Balances on Balancing Accounts & Memorandum Accounts,13 Report on Conservation Program and Expenses, and14 Report on the Company-Wide Results of Operations (Company-Wide Report).15B.SUMMARY OF RECOMMENDATIONS16

Table 1-A below presents estimated revenue increases proposed by CWS and by17

DRA. Key differences between DRAs and CWSs estimates are summarized in the next18

section. Attachment 1 at the end of this chapter presents the parties results of operations19

(RO) estimates in further details.20


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1-2

Table 1-A. Comparison of Revenue Increases.1

REVENUE INCREASES - RWV Coast Springs DRA CWS CWS > DRA

1. Test Year 2014 Increase (in dollars) $65,810 $136,984 $71,174

2. Test Year 2014 Increase 15.5% 33.1% 17.7%

3. Escalation Year 2015 Increase -0.5% -2.8% -2.3%4. Escalation Year 2016 Increase -3.3% -5.4% -2.1% 2

REVENUE INCREASES - RWV Lucerne DRA CWS CWS > DRA


2. Test Year 2014 Increase 46.1% 57.0% 10.8%

3. Escalation Year 2015 Increase -1.1% 2.2% 3.2%

4. Escalation Year 2016 Increase -3.8% -1.2% 2.6% 3

REVENUE INCREASES - RWV Unified DRA CWS CWS > DRA


2. Test Year 2014 Increase 35.9% 50.3% 14.5%3. Escalation Year 2015 Increase 1.1% -0.2% -1.3%

4. Escalation Year 2016 Increase -1.3% -2.5% -1.2% 4

C.KEY RECOMMENDATIONS5Rate of Return: DRA applies the authorized rate of return of 7.94% for Test Year 2014,

16

whereas CWS uses 8.24%, the rate that was effective at the time of its GRC application7

filing. DRA does not expect this to be a contentious issue.8

Plant Investment: DRAs estimates for plant additions are significantly lower than9

requested by CWS, as shown below. (Chapter 7 of this report and DRAs Company-10

Wide Report)11

Table 1-B. Comparison of Plant Additions.12

2012 2013 2014 2015 Annual Average

DRA -$ 181,843$ 184,389$ 213,396$ $ 144,907

CWS -$ 258,554$ 224,200$ 367,418$ $ 212,543

CWS > DRA -$ 76,711$ 39,811$ 154,022$ 67,636$

DRA as % of CWS n/a 70% 82% 58% 68% 13

Conservation Expenses: DRA recommends only $6,500 out of CWSs requested14

$19,350. DRA supports maintaining ongoing conservation efforts and the States water15

1Advice Letter 2085.


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1-3

conservation goals, however, these goals can be achieved at DRAs lower cost estimates.1

(Report on Conservation Program and Expenses)2

General Office Expenses & Ratebase: CWSs General Office expenses and rate base are3

allocated to individual districts based on a four-factor allocation. DRA examined4

expenses and capital investments of the CWSs general office operations and5

recommends substantial adjustments that include among other things: disallowance of 206

of CWSs new employee requests, 35 requested vehicles and related transportation7

expenses, removal of the costs included in the pension component for the Supplemental8

Executive Retirement Plan and exclusion of those costs from the pension balancing9

account beginning in January 2014, and the removal of expense included by CWS in10

Administrative and General salaries for stock awards granted to executive officers.11

(Report on the General Office)12

Income Taxes: In addition to the adjustments to correspond to other results of operations13

estimates (such as revenues, expenses and plant), DRAs tax calculations more accurately14

reflect the Repair Cost and the extension of the Bonus Depreciation to 2013. DRA15

worked cooperatively with CWS to incorporate these recent tax law changes in its16

estimates and does not expect this to be a controversial issue.17

Depreciation: For depreciation expenses, DRA uses lower depreciation rates for mains18

and services that do not include cost of removal. (DRAs Company-Wide Report,19

Chapter 8)20

Rate Base: DRA adjusts a number of components, in addition to plant balances, that21

make up the weighted average rate base on which the company can earn a return. These22

include contributions in aid of construction, materials and supplies and average lead/lag23

days. (DRAs Company-Wide Report)24

Operating Expenses: DRA estimates lower total Operating and Maintenance expenses25

and Administrative and General expenses that reflect among other things reductions in26

source of supply, contracted maintenance and employee benefits. (Chapters 3 and 4)27


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1-4

Sales Forecasts: DRA estimates higher sales for residential and business in Coast1

Springs; higher sales for residential, business and multi-family in Lucerne; and higher2

sales for residential in Unified. DRA also recommends unaccounted for water rates of3

23.72% for Coast Springs, 20.7% for Lucerne and 15.8% for Unified. (Chapter 2)4

In addition to adjustments to the companys Test Year and Escalation Year5

forecasts, DRA also present its findings and where appropriate recommendations on6

customer service (Chapter 10, Company-Wide Report) and water quality (Chapter 11 of7

this Report).8

Lastly, DRA considered CWSs 21 separate Special Requests, listed in9

Table 1-C below. Those requests include rate design- and billing-related proposals that10

have direct and significant impact on customers in this district include:11

Special Request # 6 Phase-in of rates in 14 districts. CWS requests Commission12

authority to phase-in rates in certain districts if a set of criteria is met. Based on DRAs13

recommended revenue requirement and phase-in criteria, phase-in rates will not be14

applicable.15

Special Request # 16 Balanced Payment Plan. CWS requests Commission authority to16

offer a Balanced Payment Plan option to its customers. DRA recommends CWSs17

balanced payment plan proposal be approved by the Commission on the condition that18

CWS offers it to all of its customers.19

For more details on the above and other Special Requests, please see DRAs20

Company-Wide Report unless otherwise indicated.21

22


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1-5

Table 1-C. Special Requests by CWS.1

Special

Request

Number

CWSs Special Request DRAs Recommendation

1 Additional Rate Design Phase Allow

2 Coordination with Open Proceedings Allow with condition

3 Rate Design Pilot Allow with clarification

4 Sales Reconciliation Mechanism Disallow

5 Expand Rate Stabilization Mechanism Allow with modifications

6 Phase-in of Rates in 14 Districts Disallow

7 Waiver of Notice for Escalation Years Disallow

8 Subsequent Offset Increases Allow with condition

9 Apply Salinas Tariff to Buena Vista Allow

10 Apply Kernville Tariff to James Water Allow

11Closing Balancing Accounts and MemorandumAccounts

See Report on the Balances ofMemorandum and BalancingAccounts

12Continuing Balancing Accounts and MemorandumAccounts

See Report on the Balances ofMemorandum and BalancingAccounts

13 Health Cost Balancing Account (New) Disallow

14 Water Quality Findings See each Water Quality chapter inDRAs Report on Results ofOperations for each district.

15 Customer Service Rule Change Disallow

16 Balanced Payment Plan Allow with conditions

17 Credit Card Program Disallow

18 Chromium 6 Memo Account (New) Disallow

19 Cross-Connection Rule 16 Change Allow with reporting

20 Lot and Transmission Fee Modifications Allow

21 Tariff For Residential Fire Service Disallow


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Chapter 1, Attachment A, page 1

CHAPTER 1, ATTACHMENT A1

REDWOOD VALLEY DISTRICT2

DRAS RESULTS OF OPERATIONS TABLES3

Index4 Coast Springs5Page 2 Table 1-1: SUMMARY OF EARNINGS - TEST YEAR6Page 3 Table 1-2: SUMMARY OF EARNINGS - ESCALATION YEARS7Page 4 Table 2-1: WATER SALES PER CUSTOMER (OR PER CONNECTION)8Page 5 Table 2-2: AVERAGE NUMBER OF CUSTOMERS (SERVICE CONNECTIONS)9Page 6 Table 2-3: TOTAL SALES AND SUPPLY10Page 7 Table 2-4: OPERATING REVENUES AT PRESENT RATES11Page 8 Table 3-1: OPERATIONS & MAINTENANCE EXPENSES - TEST YEAR12Page 9 Table 4-1: ADMINISTRATIVE & GENERAL EXPENSES13Page 10 Table 5-1: TAXES OTHER THAN INCOME14Page 11 Table 6-1: TAXES BASED ON INCOME - TEST YEAR AT PRESENT RATES15Page 12 Table 6-2: TAXES BASED ON INCOME - TEST YEAR AT PROPOSED RATES16Page 13 Table 7-1: UTILITY PLANT IN SERVICE17Page 14 Table 8-1: DEPRECIATION RESERVE & EXPENSE18Page 15 Table 9-1: WEIGHTED AVERAGE RATE BASE - TEST YEAR19Page 16 Table 9-2: WEIGHTED AVERAGE RATE BASE - ESCALATION YEAR20

Lucern21Page 17 Table 1-1: SUMMARY OF EARNINGS - TEST YEAR22Page 18 Table 1-2: SUMMARY OF EARNINGS - ESCALATION YEARS23Page 19 Table 2-1: WATER SALES PER CUSTOMER (OR PER CONNECTION)24Page 20 Table 2-2: AVERAGE NUMBER OF CUSTOMERS (SERVICE CONNECTIONS)25Page 21 Table 2-3: TOTAL SALES AND SUPPLY26Page 22 Table 2-4: OPERATING REVENUES AT PRESENT RATES27Page 23 Table 3-1: OPERATIONS & MAINTENANCE EXPENSES - TEST YEAR28Page 24 Table 4-1: ADMINISTRATIVE & GENERAL EXPENSES29Page 25 Table 5-1: TAXES OTHER THAN INCOME30Page 26 Table 6-1: TAXES BASED ON INCOME - TEST YEAR AT PRESENT RATES31Page 27 Table 6-2: TAXES BASED ON INCOME - TEST YEAR AT PROPOSED RATES32Page 28 Table 7-1: UTILITY PLANT IN SERVICE33Page 29 Table 8-1: DEPRECIATION RESERVE & EXPENSE34Page 30 Table 9-1: WEIGHTED AVERAGE RATE BASE - TEST YEAR35Page 31 Table 9-2: WEIGHTED AVERAGE RATE BASE - ESCALATION YEAR36Unified37Page 32 Table 1-1: SUMMARY OF EARNINGS - TEST YEAR38Page 33 Table 1-2: SUMMARY OF EARNINGS - ESCALATION YEARS39Page 34 Table 2-1: WATER SALES PER CUSTOMER (OR PER CONNECTION)40Page 35 Table 2-2: AVERAGE NUMBER OF CUSTOMERS (SERVICE CONNECTIONS)41Page 36 Table 2-3: TOTAL SALES AND SUPPLY42Page 37 Table 2-4: OPERATING REVENUES AT PRESENT RATES43

Page 38 Table 3-1: OPERATIONS & MAINTENANCE EXPENSES - TEST YEAR44 Page 39 Table 4-1: ADMINISTRATIVE & GENERAL EXPENSES45Page 40 Table 5-1: TAXES OTHER THAN INCOME46Page 41 Table 6-1: TAXES BASED ON INCOME - TEST YEAR AT PRESENT RATES47Page 42 Table 6-2: TAXES BASED ON INCOME - TEST YEAR AT PROPOSED RATES48Page 43 Table 7-1: UTILITY PLANT IN SERVICE49Page 44 Table 8-1: DEPRECIATION RESERVE & EXPENSE50Page 45 Table 9-1: WEIGHTED AVERAGE RATE BASE - TEST YEAR51Page 46 Table 9-2: WEIGHTED AVERAGE RATE BASE - ESCALATION YEAR52

53


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DRA- CWS-Test Year 2014 ($000) Present Present

Rates Rates

1a Operating Revenues 425.4 413.6 (11.9) -2.8%

Operating Expenses:

2a Operation & Maintenance 117.4 121.9 4.5 3.8%

3a Administrative & General 54.0 56.9 3.0 5.5%

4a Payroll 39.6 40.5 0.9 2.3%

5a General Office -prorated expenses 63.4 75.9 12.5 19.7%

6a Depreciation Expense 71.2 75.7 4.5 6.3%

7a Taxes Other Than Income 11.4 12.3 0.9 7.7%

8a California Corporate Franchise Tax 1.5 (1.3) (2.8) -189.4%

9a Federal Income Tax 11.7 (2.9) (14.6) -125.1%

10a Total Operating Expenses 370.2 378.9 8.7 2.4%

11a Net Operating Revenues 55.3 34.7 (20.6) -37.2%

12a Weighted Average Rate Base 1,242.7 1,475.9 233.1 18.8%

13a Return on Rate Base 4.45% 2.35% -2.10% -47.1%

DRA- CWS-

Test Year 2014 ($000) Proposed Proposed

Rates Rates

1b Operating Revenues 491.3 550.6 59.3 12.1%

Operating Expenses:

2b Operation & Maintenance 117.4 121.9 4.5 3.9%

3b Administrative & General 54.0 56.9 3.0 5.5%

4b Payroll 39.6 40.5 0.9 2.3%

5b General Office -prorated expenses 63.4 75.9 12.5 19.7%

6b Depreciation Expense 71.2 75.7 4.5 6.3%

7b Taxes Other Than Income 11.4 12.3 0.9 7.7%

8b California Corporate Franchise Tax 7.3 10.8 3.4 47.0%

9b Federal Income Tax 28.2 35.0 6.8 23.9%

10b Total Operating Expenses 392.5 429.0 36.4 9.3%

11b Net Operating Revenues 98.7 121.6 22.9 23.2%

12b Weighted Average Rate Base 1,242.7 1,475.9 233.1 18.8%

13b Return on Rate Base 7.94% 8.24% 0.30% 3.7%

14 Increase in Operating Revenues (1b - 1a) 65.8 137.0 71.2 108.2%

SUMMARY OF EARNINGS - TEST YEAR

TABLE 1-1

CWS > DRA

CWS > DRA

REDWOOD VALLEY COAST SPRINGS DISTRICT

CALIFORNIA WATER SERVICE COMPANY A.12-07-007

1


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For Illustrative Purposes ($000) DRA 2015 DRA 2016 2015-2016 Increase

1 Operating Revenues 490.9 493.5 2.7 0.5%

2 Operating Expenses:*

3 Operation & Maintenance 119.9 122.5 2.7 2.2%

4 Administrative & General 55.3 56.5 1.2 2.2%

5 Payroll 40.4 41.2 0.8 1.9%

6 G.O. Prorated Expenses 63.2 64.6 1.4 2.2%

7 Depreciation Expense 70.6 72.2 1.6 2.2%

8 Taxes Other Than Income 11.2 11.4 0.3 2.2%

9 California Corporate Franchise Tax 7.3 6.86 (0.4) -6.0%

10 Federal Income Tax 27.4 25.65 (1.7) -6.4%

11 Total Operating Expenses 395.2 401.0 5.8 1.5%

12 Net Operating Revenues 95.6 92.5 (3.1) -3.2%

13 Weighted Average Rate Base 1,203.8 1,164.8 (38.9) -3.2%

14 Return on Rate Base 7.94% 7.94% (0.0) 0.0%

* Assumed escalation factors of 2.24% for composite and 1.90% for labor, for 2016.

with income

tax effect

w/o income

tax effectCalculations

1 Uncollectibles Rate 0.03846% 0.03846%

2 100% - Uncollectibles Rate 99.96154% 99.96154% 100% - [1]

3 Franchise Tax Rate 0.00000% 0.00000%4 Franchise Tax 0.00000% 0.00000% [2] x [3]

5 Business License Rate 0.00000% 0.00000%

6 Business License cost 0.00000% 0.00000% [2] x [5]

7 Subtotal 0.03846% 0.03846% [1+4+6]

8 100% - Subtotal 99.96154% 99.96154% 100% - [7]

9 California Corporate Franchise Tax Rate 8.84%

10 California Corporate Franchise Tax 8.83660% [8] x [9]

11 American Jobs Creation Act Rate 9.00%

12 American Jobs Creation Act deductions * 8.20124% [8-1]x[11]xprod%

13 Federal Income Tax Rate 35.00%

14 Federal Income Tax 29.02329% [8-10-12] x 13

15 Total Taxes Paid 37.89835% 0.03846% [7+10+14]

16 Net After Taxes 62.10165% 99.96154% 100% - [15]

17 NTG Multiplier 1.61026 1.00038 1 / [16]

Capital Structure NTG Multiplier

18 Debt 46.6% 1.00038 0.46618 w/o income taxes

19 Equity 53.4% 1.61026 0.85988 with income taxes

20 Total 100.0% 1.32606 Wtd. NTG Multiplier

* prod% = ratio of total well and surface water to total water supply.



TABLE 1-2

SUMMARY OF EARNINGS - ESCALATION YEARS

Net-to-Gross (NTG) Multiplier for 2nd

Escalation Year &

Other Offset Filings

1

2


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Test Year 2014 (CCF/connection/year)* DRA CWS

1a Residential 27.8 26.4 (1.4) -5.1%

2a Business 132.0 122.4 (9.6) -7.3%

3a Multiple Family 0.0 0.0 0.0 0.0%

4a Industrial 0.0 0.0 0.0 0.0%

5a Public Authority 9.0 9.0 0.0 0.0%

6a Other 0.0 0.0 0.0 0.0%

7a Irrigation 0.0 0.0 0.0 0.0%

8a Recycled 0.0 0.0 0.0 0.0%

9a Residential Flat 0.0 0.0 0.0 0.0%

10a Private Fire Protection 0.0 0.0 0.0 0.0%

11a Public Fire Protection 0.0 0.0 0.0 0.0%

Escalation Year 2015 (CCF/connection/year)* DRA CWS

1b Residential 27.8 26.4 (1.4) -5.1%

2b Business 132.0 122.4 (9.6) -7.3%

3b Multiple Family 0.0 0.0 0.0 0.0%

4b Industrial 0.0 0.0 0.0 0.0%

5b Public Authority 9.0 9.0 0.0 0.0%

6b Other 0.0 0.0 0.0 0.0%

7b Irrigation 0.0 0.0 0.0 0.0%

8b Recycled 0.0 0.0 0.0 0.0%

9b Residential Flat 0.0 0.0 0.0 0.0%

10b Private Fire Protection 0.0 0.0 0.0 0.0%

11b Public Fire Protection 0.0 0.0 0.0 0.0%

* Hundred cubic feet per connection per year.

WATER SALES PER CUSTOMER (OR PER CONNECTION)

CWS > DRA



TABLE 2-1

CWS > DRA

1

2


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Test Year 2014 DRA CWS

Metered Connections:

1a Residential 246 246 0 0%

2a Business 5 5 0 0%

3a Multiple Family 0 0 0 0%

4a Industrial 0 0 0 0%

5a Public Authority 2 2 0 0%

6a Other 0 0 0 0%

7a Irrigation 0 0 0 0%

8a Recycled 0 0 0 0%

9a Total Number of Metered Connections 253 253 0 0%

Unmetered Connections:

10a Residential Flat 0 0 0 0%11a Private Fire Protection 0 0 0 0%

12a Public Fire Protection 0 0 0 0%

13a Total Number of Unmetered Connections 0 0 0 0%

Total Number of Connections:

14a Including Fire Protection 253 253 0 0%

15a Excluding Fire Protection 253 253 0 0%

Escalation Year 2015 DRA CWS


1b Residential 247 247 0 0%

2b Business 5 5 0 0%

3b Multiple Family 0 0 0 0%4b Industrial 0 0 0 0%

5b Public Authority 2 2 0 0%

6b Other 0 0 0 0%

7b Irrigation 0 0 0 0%

8b Recycled 0 0 0 0%

9b Total Number of Metered Connections 254 254 0 0%


10b Residential Flat 0 0 0 0%

11b Private Fire Protection 0 0 0 0%

12b Public Fire Protection 0 0 0 0%

13b Total Number of Unmetered Connections 0 0 0 0%


14b Including Fire Protection 254 254 0 0%15b Excluding Fire Protection 254 254 0 0%



TABLE 2-2

CWS > DRA

CWS > DRA

AVERAGE NUMBER OF CUSTOMERS (SERVICE CONNECTIONS)

1


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Test Year 2014 (KCCF) DRA CWS

Metered Connections' Sales:

1a Residential 6.8 6.5 (0) -5.1%

2a Business 0.7 0.6 (0) -7.3%

3a Multiple Family 0.0 0.0 0 0.0%

4a Industrial 0.0 0.0 0 0.0%

5a Public Authority 0.0 0.0 0 0.0%

6a Other 0.0 0.0 0 0.0%

7a Irrigation 0.0 0.0 0 0.0%

8a Recycled 0.0 0.0 0 0.0%

9a Total Metered Connections' Sales 7.5 7.1 (0) -5.2%

10a Total Unmetered Connections' Sales 0.0 0.0 0 0.0%

11a Total Sales 7.5 7.1 (0) -5.2%

12a Unaccounted For Water Rate 23.7% 32.0% 8.3% 35.0%

13a Unaccounted For Water (UAF) 2.3 3.4 1 43.5%

14a Total Requirement (Sales + UAF) * 9.9 10.5 1 6.3%

15a Total Requirement in Acre Feet 22.6 24.1 1 6.3%

WATER SUPPLY MIX:

16a Well Water 9.8 10.4 1 6.2%

17a Purchased Water 0.0 0.0 0 0.0%

18a Treated Water 0.0 0.0 0 0.0%

19a Total Supply * 9.8 10.4 1 6.2%

Escalation Year 2015 (KCCF) DRA CWS


1b Residential 6.9 6.5 (0) -5.1%

2b Business 0.7 0.6 (0) -7.3%

3b Multiple Family 0.0 0.0 0 0.0%

4b Industrial 0.0 0.0 0 0.0%

5b Public Authority 0.0 0.0 0 0.0%

6b Other 0.0 0.0 0 0.0%

7b Irrigation 0.0 0.0 0 0.0%

8b Recycled 0.0 0.0 0 0.0%

9b Total Metered Connections' Sales 7.5 7.1 (0) -5.2%

10b Total Unmetered Connections' Sales 0.0 0.0 0 0.0%

11b Total Sales 7.545 7.1 (0) -5.2%

12b Unaccounted For Water Rate 23.7% 32.0% 8.3% 35.0%

13b Unaccounted For Water 2.3 3.4 1 43.5%

14b Total Requirement (Sales + UAF) * 9.9 10.5 1 6.3%

15b Total Requirement in Acre Feet 22.7 24.1 1 6.3%

WATER SUPPLY MIX:

16b Well Water 9.8 10.4 1 6.2%

17b Purchased Water 0.0 0.0 0 0.0%

18b Treated Water 0.0 0.0 0 0.0%

19b Total Supply * 9.8 10.4 1 6.2%

* Total Requirement and Total Supply may differ slightly due to rounding.

CWS > DRA

CWS > DRA



TABLE 2-3

TOTAL SALES AND SUPPLY

12


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Test Year 2014 ($000) DRA CWS

Metered Revenues:

1a Residential 205.5 195.1 (10.4) -5.1%

2a Business 18.6 17.3 (1.3) -7.1%


4a Industrial 0.0 0.0 0.0 0.0%

5a Public Authority 0.2 0.2 (0.0) -7.1%

6a Other 1.6 1.5 (0.1) -7.1%

7a Irrigation 0.0 0.0 0.0 0.0%

8a Recycled 0.0 0.0 0.0 0.0%

9a Total Metered Revenues 225.9 214.1 (11.9) -5.2%

Unmetered Revenues:

10a Service Charge 199.5 199.5 0.0 0.0%11a Residental Flat 0.0 0.0 0.0 0.0%

12a Total Unmetered Revenues 199.5 199.5 0.0 0.0%

Other Revenues:



15a Other 0.0 0.0 0.0 0.0%

16a Total Other Revenues 0.0 0.0 0.0 0.0%

17a Total Revenues at Present Rates, Test Year 2014 425.4 413.6 (11.9) -2.8%

Escalation Year 2015 ($000) DRA CWS

Metered Revenues:1b Residential 202.9 262.9 59.9 29.5%

2b Business 18.3 23.2 4.9 26.8%


4b Industrial 0.0 0.0 0.0 0.0%


6b Other 1.5 2.0 0.4 26.8%

7b Irrigation 0.0 0.0 0.0 0.0%

8b Recycled 0.0 0.0 0.0 0.0%

9b Total Metered Revenues 223.0 288.3 65.3 29.3%

Unmetered Revenues:

10b Service Charge 264.4 264.4 0.0 0.0%

11b Residental Flat 0.0 0.0 0.0 0.0%

12b Total Unmetered Revenues 264.4 264.4 0.0 0.0%

Other Revenues:



15b Other 0.0 0.0 0.0 0.0%

16b Total Other Revenues 0.0 0.0 0.0 0.0%

17b Total Revenues at Present Rates, Escal. Year 2015 487.4 552.7 65.3 13.4%


CWS > DRA

CWS > DRA


TABLE 2-4

OPERATING REVENUES AT PRESENT RATES

12


17/120



Operations Expenses:

1 Purchased Water 0.0 0.0 0.0 0.0%

2 Groundwater Charges 0.0 0.0 0.0 0.0%

3 Purchased Power 10.5 11.1 0.7 6.2%

4 Purchased Chemicals 2.9 3.1 0.2 6.2%

5 Payroll 27.2 27.8 0.6 2.2%

6 Postage 0.9 0.9 0.0 0.0%

7 Transportation 4.7 4.7 0.0 0.0%

Purchased Services:

8 Source of Supply 0.7 0.7 0.0 0.0%

9 Pumping 0.4 0.4 0.0 0.0%

10 Water Treatment 71.9 71.9 0.0 0.0%11 Transmission & Distribution 5.4 5.4 0.0 0.0%

12 Customer Accounting 8.2 8.2 0.0 0.0%

13 Conservation 1.0 2.9 1.9 196.9%

14 Total Operations Exp. excluding Uncollectibles 133.8 137.1 3.3 2.5%

Maintenance Expenses:

15 Payroll 4.4 4.5 0.1 2.3%


17 Stores 0.0 0.0 0.0 0.0%

18 Contracted Maintenance * 8.4 10.1 1.7 20.2%

19 Total Maintenance Expenses 15.0 16.8 1.8 12.0%

At Present Rates20 Operating Revenues 425.4 413.6 (11.9) -2.8%

21 Uncollectible Rate 0.0385% 0.0481% 0.0096% 25.0%

22 Uncollectibles Expense 0.2 0.2 0.0 21.5%

23 Total O&M Expenses including Uncollectibles 149.0 154.2 5.2 3.5%

At Proposed Rates





* DRA estimate include amortization of tank painting costs; CWS capitalizes tank painting costs.

TABLE 3-1

OPERATIONS & MAINTENANCE EXPENSES - TEST YEAR

CWS > DRA



1

2


18/120



Administrative & General Expenses:

1a Payroll 8.0 8.2 0.2 2.5%

2a Benefits 39.8 42.8 3.0 7.4%

3a Transportation Expenses 0.0 0.0 0.0 0.0%

Purchased Services:

4a Rents, Acct. 8110 0.0 0.0 0.0 0.0%

5a Admin. Charges Transferred, Acct. 8120 0.0 0.0 0.0 0.0%

6a Workers' Compensation 2.2 2.2 0.0 0.0%

7a Non-Specifics 3.5 3.5 0.0 0.0%

8a Subtotal 53.5 56.7 3.2 5.9%

Miscellaneous Expenses9a Amortization of Limited Term Investment 8.4 8.4 0.0 0.0%

Ratemaking Adjustments

10a Dues & Donations Adjustments 0.0 0.0 0.0 0.0%

11a Total A&G and Miscellaneous Adjustments 62.0 65.1 3.2 5.1%



TABLE 4-1

ADMINISTRATIVE & GENERAL EXPENSES

CWS > DRA

1

2


19/120



1a Ad Valorem Taxes 7.0 7.8 0.8 10.9%

2a Payroll Taxes 4.4 4.5 0.1 2.5%

Business License-Present Rates 0.0 0.0 0.0 0.0%

At Present Rates

3a Operating RevenueEXCLUDING Uncollectibles * 425.4 413.6 (11.9) -2.8%

4a Effective Local Franchise Tax Rate 0.000% 0.000% 0.000% 0.0%

5a Franchise Taxes on applicable op. revenues 0.0 0.0 0.0 0.0%

6a Total Taxes Other Than Income, At Present Rates 11.4 12.3 0.9 7.7%

At Proposed Rates

7a Operating RevenueEXCLUDING Uncollectibles * 491.3 550.6 59.3 12.1%8a Effective Local Franchise Tax Rate 0.000% 0.000% 0.000% 0.0%


Business License-Proposed Rates 0.0 0.0 0.0 0.0%

10a Total Taxes Other Than Income, At Proposed Rates 11.4 12.3 0.9 7.7%

TABLE 5-1

TAXES OTHER THAN INCOME



CWS > DRA

1


20/120



1 Operating Revenues at Present Rates 425.4 413.6 (11.9) -2.8%

Common Deductions:

2 O&M Expenses less Uncollectibles Expense 148.8 154.0 5.1 3.5%


4 A&G Expenses 62.0 65.1 3.2 5.1%


6 G.O. Book Depreciation (to be excluded) (6.2) (7.7) (1.5) 24.2%

7 Transportation Deprec. Expense (to be excluded) (0.2) (0.3) (0.0) 23.6%

8 Taxes On Other Than Income 11.4 12.3 0.9 7.7%

9 Interest Expense 35.4 42.1 6.7 19.0%

10 Total Common Deductions 314.7 341.6 26.9 8.5%

Calif. Corporation Franchise Tax Deductions

11 Book Depreciation - District 84.2 73.3 (10.9) -12.9%

12 Book Depreciation - G.O. 9.6 13.9 4.3 45.4%

13 Subtotal 93.7 87.2 (6.5) -7.0%

14 Total State Deductions, incl. Common Deductions 408.4 428.8 20.4 5.0%

Federal Tax Deductions

16 Book Depreciation - District 70.0 74.4 4.5 6.4%


18 Domestic Production Activity Deductions 0.0 0.0 0.0 0.0%

19 Calif. Corporation Franchise Tax (current year) 1.5 (1.3) (2.8) -189.4%

20 Subtotal 77.3 80.4 3.0 3.9%21 Total Fed. Deductions, incl. Common Deductions 392.0 422.0 29.9 7.6%

California Corporate Franchise Tax (CCFT)

22 Taxable Income for CCFT 17.0 (15.2) (32.2) -189.4%

23 CCFT Rate 8.84% 8.84%

24 Total CCFT 1.5 (1.3) (2.8) -189.4%

Federal Income Tax (FIT)

25 Taxable Income for FIT 33.4 (8.4) (41.8) -125.1%

26 FIT Rate 35.00% 35.00%

27 Total FIT 11.7 (2.9) (41.8) (1.3)

28 Adjustment to FIT, Regulatory Liability 0.0 0.0 0.0 0.0%

29 Total FIT, with Adjustment 11.7 (2.9) (14.6) -125.1%

30 Total Income Taxes for Revenues at Present Rates 13.2 (4.3) (17.5) -132.4%

TABLE 6-1

TAXES BASED ON INCOME - TEST YEAR AT PRESENT RATES



CWS > DRA

1

2


21/120



1 Operating Revenues at Proposed Rates 491.3 550.6 59.3 12.1%

Common Deductions:



4 A&G Expenses 62.0 65.1 3.2 5.1%






10 Total Common Deductions 314.7 341.7 26.9 8.6%


11 Book Depreciation - District 84.2 73.3 (10.9) -12.9%


13 Subtotal 93.7 87.2 (6.5) -7.0%

14 Total State Deductions, incl. Common Deductions 408.5 428.9 20.4 5.0%





19 Calif. Corporation Franchise Tax (current year) 7.3 10.8 3.4 47.0%

20 Subtotal 95.8 108.9 13.1 13.6%21 Total Fed. Deductions, incl. Common Deductions 410.6 450.6 40.0 9.7%


22 Taxable Income for CCFT 82.8 121.7 38.9 47.0%

23 CCFT Rate 8.84% 8.84%

24 Total CCFT 7.3 10.8 3.4 47.0%


25 Taxable Income for FIT 80.7 100.0 19.3 23.9%

26 FIT Rate 35.00% 35.00%

27 Total FIT 28.2 35.0 6.8 23.9%


29 Total FIT, with Adjustment 28.2 35.0 6.8 23.9%

30 Total Income Taxes for Revenues at Proposed Rates 35.6 45.8 10.2 28.7%



TABLE 6-2

CWS > DRA

TAXES BASED ON INCOME - TEST YEAR AT PROPOSED RATES

1

2


22/120



1a Plant in Service - Beginning of Year 3,132.8 3,334.1 201.3 6.4%

2a Adjustments (1,190.0) (1,190.0) 0.0 0.0%

Gross Additions:

3a Company-funded plant 0.0 0.0 0.0 0.0%

4a Advances 0.0 0.0 0.0 0.0%

5a Contributions 0.0 0.0 0.0 0.0%

6a Total Gross Additions 0.0 0.0 0.0 0.0%

7a Construction Overhead Adjustment 0.0 0.0 0.0 0.0%

8a Retirements (16.3) (16.3) 0.0 0.0%

9a Net Additions (16.3) (16.3) 0.0 0.0%

10a Plant in Service - End of Year 1,926.5 2,127.8 201.3 10.4%

11a Plant Weighting Factor 27.94% 36.44% 8.51% 30.5%

12a Weighted Average Plant in Service 1,938.3 2,138.2 199.9 10.3%


1b Plant in Service - Beginning of Year 3,116.5 3,317.8 201.3 6.5%

2b Adjustments (1,190.0) (1,190.0) 0.0 0.0%

Gross Additions:

3b Company-funded plant 8.6 8.6 0.0 0.0%

4b Advances 0.0 0.0 0.0 0.0%5b Contributions 0.0 0.0 0.0 0.0%

6b Total Gross Additions 8.6 8.6 0.0 0.0%

7b Construction Overhead Adjustment 0.5 (0.0) (0.5) -110.9%

8b Retirements (16.3) (16.3) 0.0 0.0%

9b Net Additions (7.2) (7.7) (0.5) 7.0%

10b Plant in Service - End of Year 1,919.3 2,120.1 200.8 10.5%

11b Plant Weighting Factor 27.94% 36.44% 8.51% 30.5%

12b Weighted Average Plant in Service 1,924.5 2,125.0 200.5 10.4%

TABLE 7-1

UTILITY PLANT IN SERVICE



CWS > DRA

CWS > DRA

1


23/120



1a Depreciation Reserve - Beginning of Year 577.0 577.0 0.1 0.0%

Accruals:

2a Transportation Equipment 0.0 0.0 0.0 0.0%

3a Contributed Plant 4.0 3.8 (0.2) -4.0%

4a Depreciation Accrual * 70.0 74.4 4.5 6.4%

5a Total Accruals 74.0 78.3 4.3 5.8%

Retirements and Adjustments:

6a Net Retirements 19.0 19.0 0.0 0.0%

7a Adjustments 0.0 0.0 0.0 0.0%

8a Total Retirement and Adjustments 19.0 19.0 0.0 0.0%

9a Net Additions 51.0 55.5 4.5 8.8%

10a Depreciation Reserve - End of Year 628.0 632.5 4.5 0.7%

11a Depreciation Reserve Weighting Factor 50.00% 50.00% 0.00% 0.0%

12a Weighted Average Depreciation Reserve 602.5 604.8 2.3 0.4%

13a * Deprec. expense for summary of earnings calc. 71.2 75.7 4.5 6.3%

(does not include depreciation for transportation, etc.)


1b Depreciation Reserve - Beginning of Year 628.0 632.5 4.5 0.7%

Accruals:

2b Transportation Equipment 0.0 0.0 0.0 0.0%

3b Contributed Plant 4.0 3.8 (0.2) -4.1%

4b Depreciation Accrual * 69.4 73.9 4.5 6.4%

5b Total Accruals 73.4 77.7 4.3 5.9%


6b Net Retirements 19.0 19.0 0.0 0.0%

7b Adjustments 0.0 0.0 0.0 0.0%

8b Total Retirement and Adjustments 19.0 19.0 0.0 0.0%

9b Net Additions 50.4 54.9 4.5 8.9%

10b Depreciation Reserve - End of Year 678.4 687.4 9.0 1.3%

11bDepreciation Reserve Weighting Factor 50.00% 50.00% 0.00% 0.0%

12b Weighted Average Depreciation Reserve 653.2 660.0 6.8 1.0%

13b * Deprec. expense for summary of earnings calc. 70.6 75.1 4.5 6.3%



TABLE 8-1

DEPRECIATION RESERVE & EXPENSE

CWS > DRA

CWS > DRA


12


24/120



1 Weighted Average Plant In Service 1,938.3 2,138.2 199.9 10.3%

2 Weighted Average Depreciation Reserve (602.5) (604.8) (2.3) 0.4%

3 Net Utility Plant 1,335.8 1,533.4 197.6 14.8%

Deductions from Rate Base:

4 Contribution In Aid of Contruction 109.5 109.6 0.1 0.1%

5 Advances in Construction 0.0 0.0 0.0 0.0%

6 Reserve for Amortization of Intangibles 68.2 68.2 0.0 0.0%

7 Deferred Taxes 93.8 73.4 (20.4) -21.7%

8 Unamortized Investment Tax Credits 0.0 0.0 0.0 0.0%

9 Total Deductions from Rate Base 271.5 251.2 (20.3) -7.5%

Additions to Rate Base:

Working Capital:

10 Materials & Supplies 0.0 0.0 0.0 0.0%

11 Working Cash, Lead-Lag 27.2 28.9 1.7 6.4%

12 Amount Withheld from Employees (0.2) (0.2) 0.0 0.0%

13 Total Working Capital 27.0 28.7 1.7 6.5%

15 Taxes on Advances 0.0 0.0 0.0 0.0%

16 Taxes on Contributions 0.0 0.0 0.0 0.0%

17 Total Additions to Rate Base 27.0 28.7 1.7 6.5%

Prorated Redwood Valley Rate Base (JM2 added) 100.6 100.1 (0.4) -0.4%

18 Weighted Average Rate Base, District 1,091.2 1,310.9 219.7 20.1%

19 Weighted Average Rate Base, G.O. Allocation 50.9 64.8 13.9 27.3%

20 Total Weighted Average Rate Base 1,242.7 1,475.9 233.1 18.8%

Interest Calculation (for Tax Deductions):

21 Weighted Avg. Rate Base, excl. Working Capital 1,215.7 1,447.1 231.4 19.0%

22 Weighted Cost of Debt 2.91% 2.91% 0.00% 0.0%

23 Interest Expense 35.4 42.1 * 6.7 19.0%

* CWS's amount was incorrectly calculated & based on incorrect rate base amount.


CWS > DRA


TABLE 9-1

WEIGHTED AVERAGE RATE BASE - TEST YEAR

1

2


25/120




2 Weighted Average Depreciation Reserve (653.2) (660.0) (6.8) 1.0%






7 Deferred Taxes 97.8 93.9 (4.0) -4.1%


9 Total Deductions from Rate Base 280.8 277.0 (3.7) -1.3%


Working Capital:


11 Working Cash, Lead-Lag 27.5 25.8 (1.8) -6.4%


13 Total Working Capital 27.4 25.6 (1.8) -6.4%



17 Total Additions to Rate Base 27.4 25.6 (1.8) -6.4%










CWS > DRA



TABLE 9-2

WEIGHTED AVERAGE RATE BASE - ESCALATION YEAR

1


26/120



Rates Rates

1a Operating Revenues 1,460.2 1,436.1 (24.1) -1.6%

Operating Expenses:


3a Administrative & General 252.4 239.6 (12.7) -5.0%

4a Payroll 394.3 404.1 9.8 2.5%




8a California Corporate Franchise Tax (25.6) (51.1) (25.5) 99.5%9a Federal Income Tax (88.1) (119.7) (31.5) 35.8%

10a Total Operating Expenses 1,505.4 1,533.2 27.8 1.8%

11a Net Operating Revenues (45.2) (97.1) (51.9) 114.7%


13a Return on Rate Base -1.02% -2.08% -1.06% 103.5%

DRA- CWS-


Rates Rates

1b Operating Revenues 2,134.0 2,254.2 120.2 5.6%

Operating Expenses:


3b Administrative & General 252.4 239.6 (12.7) -5.0%

4b Payroll 394.3 404.1 9.8 2.5%




8b California Corporate Franchise Tax 33.5 20.6 (12.9) -38.4%


10b Total Operating Expenses 1,783.0 1,870.2 87.2 4.9%


12b Weighted Average Rate Base 4,417.9 4,659.6 241.6 5.5%

13b Return on Rate Base 7.94% 8.24% 0.30% 3.7%



TABLE 1-1

CWS > DRA

CWS > DRA

REDWOOD VALLEY LUCERNE DISTRICT


1


27/120



1 Operating Revenues 2,109.6 2,135.0 25.5 1.2%




5 Payroll 401.8 409.4 7.6 1.9%






11 Total Operating Expenses 1,764.2 1,795.2 31.0 1.8%



14 Return on Rate Base 7.94% 7.94% (0.0) 0.0%


with income

tax effect

w/o income







7 Subtotal 0.76587% 0.76587% [1+4+6]

8 100% - Subtotal 99.23413% 99.23413% 100% - [7]







15 Total Taxes Paid 41.19981% 0.76587% [7+10+14]

16 Net After Taxes 58.80019% 99.23413% 100% - [15]17 NTG Multiplier 1.70067 1.00772 1 / [16]








TABLE 1-2



Escalation Year &


1


28/120



1a Residential 63.4 58.3 (5.1) -8.0%

2a Business 148.8 145.8 (3.0) -2.0%

3a Multiple Family 1,268.6 1,181.7 (86.9) -6.8%

4a Industrial 0.0 0.0 0.0 0.0%


6a Other 0.0 0.0 0.0 0.0%

7a Irrigation 0.0 0.0 0.0 0.0%

8a Recycled 0.0 0.0 0.0 0.0%





1b Residential 63.4 58.3 (5.1) -8.0%

2b Business 148.8 145.8 (3.0) -2.0%

3b Multiple Family 1,268.6 1,181.7 (86.9) -6.8%

4b Industrial 0.0 0.0 0.0 0.0%


6b Other 0.0 0.0 0.0 0.0%

7b Irrigation 0.0 0.0 0.0 0.0%

8b Recycled 0.0 0.0 0.0 0.0%






CWS > DRA



TABLE 2-1

CWS > DRA

1


29/120




1a Residential 1,129 1,153 24 2%





6a Other 0 0 0 0%



9a Total Number of Metered Connections 1,192 1,219 27 2%






14a Including Fire Protection 1,197 1,224 27 2%

15a Excluding Fire Protection 1,192 1,219 27 2%



1b Residential 1,119 1,153 34 3%

2b Business 39 44 5 13%

3b Multiple Family 12 13 1 8%

4b Industrial 0 0 0 0%


6b Other 0 0 0 0%



9b Total Number of Metered Connections 1,179 1,219 40 3%







14b Including Fire Protection 1,184 1,224 40 3%

15b Excluding Fire Protection 1,179 1,219 40 3%



TABLE 2-2

CWS > DRA

CWS > DRA


1


30/120




1a Residential 71.6 67.3 (4) -6.0%

2a Business 6.1 6.4 0 5.1%

3a Multiple Family 16.5 15.4 (1) -6.8%

4a Industrial 0.0 0.0 0 0.0%


6a Other 0.0 0.0 0 0.0%

7a Irrigation 0.0 0.0 0 0.0%

8a Recycled 0.0 0.0 0 0.0%



11a Total Sales 95.6 90.6 (5) -5.3%


13a Unaccounted For Water (UAF) 25.0 23.7 (1) -5.2%

14a Total Requirement (Sales + UAF) * 120.6 114.3 (6) -5.3%

15a Total Requirement in Acre Feet 276.9 262.3 (15) -5.3%

WATER SUPPLY MIX:

16a Well Water 0.0 0.0 0 0.0%

17a Purchased Water 120.6 114.3 (6) -5.2%


19a Total Supply * 120.6 114.3 (6) -5.2%



1b Residential 70.9 67.3 (4) -5.2%

2b Business 5.8 6.4 1 10.5%


4b Industrial 0.0 0.0 0 0.0%


6b Other 0.0 0.0 0 0.0%

7b Irrigation 0.0 0.0 0 0.0%

8b Recycled 0.0 0.0 0 0.0%



11b Total Sales 93.437 90.6 (3) -3.0%


13b Unaccounted For Water 24.4 23.7 (1) -3.0%

14b Total Requirement (Sales + UAF) * 117.8 114.3 (4) -3.0%

15b Total Requirement in Acre Feet 270.5 262.3 (8) -3.0%

WATER SUPPLY MIX:

16b Well Water 0.0 0.0 0 0.0%

17b Purchased Water 117.8 114.3 (4) -3.0%


19b Total Supply * 117.8 114.3 (4) -3.0%



TABLE 2-3



CWS > DRA

CWS > DRA

1


31/120



Metered Revenues:

1a Residential 566.0 531.8 (34.2) -6.0%

2a Business 50.9 49.4 (1.5) -3.0%

3a Multiple Family 128.6 124.7 (3.9) -3.0%

4a Industrial 0.0 0.0 0.0 0.0%

5a Public Authority 10.8 10.4 (0.3) -3.0%

6a Other 0.0 0.0 0.0 0.0%

7a Irrigation 0.0 0.0 0.0 0.0%

8a Recycled 0.0 0.0 0.0 0.0%


Unmetered Revenues:



Other Revenues:



15a Other 0.7 0.7 0.0 0.0%


17a Total Revenues at Present Rates, Test Year 2014 1,460.2 1,436.1 (24.1) -1.6%


Metered Revenues:1b Residential 940.7 1,016.4 75.8 8.1%

2b Business 79.8 94.4 14.6 18.2%


4b Industrial 0.0 0.0 0.0 0.0%


6b Other 0.0 0.0 0.0 0.0%

7b Irrigation 0.0 0.0 0.0 0.0%

8b Recycled 0.0 0.0 0.0 0.0%

9b Total Metered Revenues 1,238.9 1,369.0 130.1 10.5%

Unmetered Revenues:

10b Service Charge 855.9 884.1 28.3 3.3%



Other Revenues:



15b Other 0.6 0.6 0.0 0.0%


17b Total Revenues at Present Rates, Escal. Year 2015 2,095.7 2,254.1 158.4 7.6%


CWS > DRA

CWS > DRA


TABLE 2-4


1


32/120




1 Purchased Water 14.3 13.8 (0.5) -3.5%


3 Purchased Power 91.8 93.1 1.4 1.5%

4 Purchased Chemicals 25.0 23.7 (1.3) -5.2%

5 Payroll 307.2 314.8 7.6 2.5%

6 Postage 5.1 5.2 0.1 2.0%


Purchased Services:


9 Pumping 0.6 0.6 0.0 0.0%



13 Conservation 4.2 12.4 8.2 196.9%



15 Payroll 21.3 21.8 0.5 2.3%


17 Stores 0.3 0.3 0.0 0.0%



At Present Rates

20 Operating Revenues 1,460.2 1,436.1 (24.1) -1.6%


22 Uncollectibles Expense 11.2 11.0 (0.2) -1.6%


At Proposed Rates

25 Operating Revenues 2,134.0 2,254.2 120.2 5.6%





TABLE 3-1


CWS > DRA



1


33/120



Administrative & General Expenses:

1a Payroll 65.8 67.5 1.7 2.6%

2a Benefits 197.3 211.7 14.5 7.3%

3a Transportation Expenses 0.0 0.0 0.0 0.0%

Purchased Services:

4a Rents, Acct. 8110 20.0 20.0 0.0 0.0%

5a Admin. Charges Transferred, Acct. 8120 (2.6) (2.5) 0.1 -4.4%

6a Workers' Compensation 9.6 9.6 0.0 0.0%

7a Non-Specifics 28.1 0.8 (27.3) -97.2%

8a Subtotal 318.2 307.1 (11.0) -3.5%

Miscellaneous Expenses9a Amortization of Limited Term Investment 0.0 0.0 0.0 0.0%

Ratemaking Adjustments

10a Dues & Donations Adjustments 0.0 0.0 0.0 0.0%

11a Total A&G and Miscellaneous Adjustments 318.2 307.1 (11.0) -3.5%



TABLE 4-1

ADMINISTRATIVE & GENERAL EXPENSES

CWS > DRA

1


34/120



1a Ad Valorem Taxes 40.8 41.4 0.7 1.6%

2a Payroll Taxes 21.6 22.1 0.5 2.5%

Business License-Present Rates 0.0 0.0 0.0 0.0%

At Present Rates

3a Operating RevenueEXCLUDING Uncollectibles * 1,460.2 1,436.1 (24.1) -1.6%

4a Effective Local Franchise Tax Rate 0.000% 0.000% 0.000% 0.0%


6a Total Taxes Other Than Income, At Present Rates 62.4 63.6 1.2 1.9%

At Proposed Rates

7a Operating RevenueEXCLUDING Uncollectibles * 2,134.0 2,254.2 120.2 5.6%8a Effective Local Franchise Tax Rate 0.000% 0.000% 0.000% 0.0%


Business License-Proposed Rates 0.0 0.0 0.0 0.0%

10a Total Taxes Other Than Income, At Proposed Rates 62.4 63.6 1.2 1.9%

TABLE 5-1

TAXES OTHER THAN INCOME



CWS > DRA

1


35/120



1 Operating Revenues at Present Rates 1,460.2 1,436.1 (24.1) -1.6%

Common Deductions:



4 A&G Expenses 318.2 307.1 (11.0) -3.5%






10 Total Common Deductions 1,519.4 1,597.7 78.3 5.2%




13 Subtotal 230.9 417.0 186.2 80.6%

14 Total State Deductions, incl. Common Deductions 1,750.2 2,014.7 264.5 15.1%





19 Calif. Corporation Franchise Tax (current year) (25.6) (51.1) (25.5) 99.5%

20 Subtotal 192.7 180.3 (12.3) -6.4%

21 Total Fed. Deductions, incl. Common Deductions 1,712.0 1,778.0 66.0 3.9%


22 Taxable Income for CCFT (290.0) (578.6) (288.6) 99.5%

23 CCFT Rate 8.84% 8.84%

24 Total CCFT (25.6) (51.1) (25.5) 99.5%


25 Taxable Income for FIT (251.8) (341.9) (90.1) 35.8%

26 FIT Rate 35.00% 35.00%

27 Total FIT (88.1) (119.7) (90.1) 0.4


29 Total FIT, with Adjustment (88.1) (119.7) (31.5) 35.8%

30 Total Income Taxes for Revenues at Present Rates (113.8) (170.8) (57.0) 50.1%

TABLE 6-1

TAXES BASED ON INCOME - TEST YEAR AT PRESENT RATES



CWS > DRA

1


36/120



1 Operating Revenues at Proposed Rates 2,134.0 2,254.2 120.2 5.6%

Common Deductions:



4 A&G Expenses 318.2 307.1 (11.0) -3.5%






10 Total Common Deductions 1,524.5 1,604.0 79.4 5.2%




13 Subtotal 230.9 417.0 186.2 80.6%

14 Total State Deductions, incl. Common Deductions 1,755.4 2,021.0 265.6 15.1%





19 Calif. Corporation Franchise Tax (current year) 33.5 20.6 (12.9) -38.4%

20 Subtotal 251.8 252.1 0.3 0.1%

21 Total Fed. Deductions, incl. Common Deductions 1,776.3 1,856.1 79.8 4.5%


22 Taxable Income for CCFT 378.6 233.2 (145.4) -38.4%

23 CCFT Rate 8.84% 8.84%

24 Total CCFT 33.5 20.6 (12.9) -38.4%


25 Taxable Income for FIT 357.7 398.1 40.4 11.3%

26 FIT Rate 35.00% 35.00%

27 Total FIT 125.2 139.3 14.2 11.3%


29 Total FIT, with Adjustment 125.2 139.3 14.2 11.3%

30 Total Income Taxes for Revenues at Proposed Rates 158.6 159.9 1.3 0.8%



TABLE 6-2

CWS > DRA

TAXES BASED ON INCOME - TEST YEAR AT PROPOSED RATES

1


37/120



1a Plant in Service - Beginning of Year 13,793.6 13,927.2 133.6 1.0%

2a Adjustments (7,657.7) (7,657.7) 0.0 0.0%

Gross Additions:

3a Company-funded plant 0.0 248.3 248.3 0.0%

4a Advances 0.0 0.0 0.0 0.0%

5a Contributions 19.0 19.0 0.0 0.0%

6a Total Gross Additions 19.0 267.3 248.3 1308.7%

7a Construction Overhead Adjustment 0.0 (6.9) (6.9) 0.0%

8a Retirements (16.3) (16.3) 0.0 0.0%

9a Net Additions 2.7 244.1 241.4 8969.6%

10a Plant in Service - End of Year 6,138.5 6,513.6 375.0 6.1%

11a Plant Weighting Factor 27.94% 36.44% 8.51% 30.5%

12a Weighted Average Plant in Service 6,136.6 6,358.4 221.8 3.6%


1b Plant in Service - Beginning of Year 13,796.3 14,171.3 375.0 2.7%

2b Adjustments (7,657.7) (7,657.7) 0.0 0.0%

Gross Additions:

3b Company-funded plant 260.7 347.1 86.5 33.2%

4b Advances 0.0 0.0 0.0 0.0%

5b Contributions 19.0 19.0 0.0 0.0%

6b Total Gross Additions 279.6 366.1 86.5 30.9%

7b Construction Overhead Adjustment 13.8 (2.1) (15.8) -114.9%

8b Retirements (16.3) (16.3) 0.0 0.0%

9b Net Additions 277.2 347.8 70.6 25.5%

10b Plant in Service - End of Year 6,415.7 6,861.4 445.7 6.9%

11b Plant Weighting Factor 27.94% 36.44% 8.51% 30.5%

12b Weighted Average Plant in Service 6,216.0 6,640.3 424.4 6.8%

TABLE 7-1

UTILITY PLANT IN SERVICE



CWS > DRA

CWS > DRA

1


38/120



1a Depreciation Reserve - Beginning of Year 1,774.5 1,776.0 1.5 0.1%

Accruals:

2a Transportation Equipment 0.0 0.0 0.0 0.0%

3a Contributed Plant 6.1 6.2 0.0 0.6%

4a Depreciation Accrual * 193.2 200.3 7.1 3.7%

5a Total Accruals 199.3 206.5 7.2 3.6%


6a Net Retirements 20.0 20.0 0.0 0.0%

7a Adjustments 0.0 0.0 0.0 0.0%

8a Total Retirement and Adjustments 20.0 20.0 0.0 0.0%

9a Net Additions 173.2 180.3 7.1 4.1%

10a Depreciation Reserve - End of Year 1,947.7 1,956.3 8.7 0.4%

11a Depreciation Reserve Weighting Factor 50.00% 50.00% 0.00% 0.0%

12a Weighted Average Depreciation Reserve 1,861.1 1,866.2 5.1 0.3%

13a * Deprec. expense for summary of earnings calc. 193.2 200.3 7.1 3.7%



1b Depreciation Reserve - Beginning of Year 1,947.7 1,956.3 8.7 0.4%

Accruals:

2b Transportation Equipment 0.0 0.0 0.0 0.0%

3b Contributed Plant 6.8 6.7 (0.1) -1.7%

4b Depreciation Accrual * 192.5 203.6 11.1 5.8%

5b Total Accruals 199.2 210.3 11.0 5.5%


6b Net Retirements 18.1 18.1 0.0 0.0%

7b Adjustments 0.0 0.0 0.0 0.0%

8b Total Retirement and Adjustments 18.1 18.1 0.0 0.0%

9b Net Additions 174.4 185.5 11.1 6.4%

10b Depreciation Reserve - End of Year 2,122.0 2,141.9 19.8 0.9%

11b Depreciation Reserve Weighting Factor 50.00% 50.00% 0.00% 0.0%

12b Weighted Average Depreciation Reserve 2,034.9 2,049.1 14.2 0.7%

13b * Deprec. expense for summary of earnings calc. 192.5 203.6 11.1 5.8%



TABLE 8-1

DEPRECIATION RESERVE & EXPENSE

CWS > DRA

CWS > DRA


1


39/120




2 Weighted Average Depreciation Reserve (1,861.1) (1,866.2) (5.1) 0.3%






7 Deferred Taxes 647.9 682.4 34.5 5.3%


9 Total Deductions from Rate Base 792.1 828.2 36.1 4.6%


Working Capital:


















CWS > DRA


TABLE 9-1

WEIGHTED AVERAGE RATE BASE - TEST YEAR

1


40/120




2 Weighted Average Depreciation Reserve (2,034.9) (2,049.1) (14.2) 0.7%






7 Deferred Taxes 735.8 791.0 55.2 7.5%


9 Total Deductions from Rate Base 892.5 949.4 56.8 6.4%


Working Capital:

















CWS > DRA



TABLE 9-2

WEIGHTED AVERAGE RATE BASE - ESCALATION YEAR

1


41/120



Rates Rates

1a Operating Revenues 572.0 563.3 (8.7) -1.5%

Operating Expenses:


3a Administrative & General 94.8 104.0 9.2 9.7%

4a Payroll 135.9 139.3 3.4 2.5%




8a California Corporate Franchise Tax 0.1 (4.6) (4.7) -4458.6%9a Federal Income Tax (17.1) (35.1) (18.0) 105.5%

10a Total Operating Expenses 544.4 565.5 21.1 3.9%

11a Net Operating Revenues 27.7 (2.2) (29.8) -107.9%


13a Return on Rate Base 1.44% -0.11% -1.54% -107.4%

DRA- CWS-


Rates Rates

1b Operating Revenues 777.2 846.8 69.6 9.0%

Operating Expenses:


3b Administrative & General 94.8 104.0 9.2 9.7%

4b Payroll 135.9 139.3 3.4 2.5%




8b California Corporate Franchise Tax 18.1 20.3 2.2 12.2%


10b Total Operating Expenses 624.3 676.7 52.4 8.4%


12b Weighted Average Rate Base 1,925.5 2,064.7 139.2 7.2%13b Return on Rate Base 7.94% 8.24% 0.30% 3.7%



TABLE 1-1

CWS > DRA

CWS > DRA

REDWOOD VALLEY UNIFIED DISTRICT


1


42/120







5 Payroll 138.5 141.1 2.6 1.9%






11 Total Operating Expenses 635.8 646.2 10.4 1.6%



14 Return on Rate Base 7.94% 7.94% 0.0 0.0%


with income

tax effect

w/o income







7 Subtotal 0.71718% 0.71718% [1+4+6]

8 100% - Subtotal 99.28282% 99.28282% 100% - [7]







15 Total Taxes Paid 38.51958% 0.71718% [7+10+14]

16 Net After Taxes 61.48042% 99.28282% 100% - [15]17 NTG Multiplier 1.62653 1.00722 1 / [16]








TABLE 1-2



Escalation Year &


1


43/120



1a Residential 67.2 64.2 (3.0) -4.5%

2a Business 227.2 262.8 35.6 15.7%


4a Industrial 0.0 0.0 0.0 0.0%


6a Other 0.0 0.0 0.0 0.0%

7a Irrigation 0.0 0.0 0.0 0.0%

8a Recycled 0.0 0.0 0.0 0.0%





1b Residential 66.2 63.2 (3.0) -4.5%

2b Business 227.2 262.8 35.6 15.7%


4b Industrial 0.0 0.0 0.0 0.0%


6b Other 0.0 0.0 0.0 0.0%

7b Irrigation 0.0 0.0 0.0 0.0%

8b Recycled 0.0 0.0 0.0 0.0%






CWS > DRA



TABLE 2-1

CWS > DRA

1


44/120




1a Residential 417 417 0 0%





6a Other 0 0 0 0%



9a Total Number of Metered Connections 429 429 0 0%






14a Including Fire Protection 429 429 0 0%

15a Excluding Fire Protection 429 429 0 0%



1b Residential 418 418 0 0%

2b Business 6 6 0 0%

3b Multiple Family 3 3 0 0%4b Industrial 0 0 0 0%


6b Other 0 0 0 0%



9b Total Number of Metered Connections 430 430 0 0%







14b Including Fire Protection 430 430 0 0%15b Excluding Fire Protection 430 430 0 0%



TABLE 2-2

CWS > DRA

CWS > DRA


1


45/120




1a Residential 28.0 26.8 (1) -4.5%

2a Business 1.4 1.6 0 15.7%

3a Multiple Family 2.5 2.5 0 0.0%

4a Industrial 0.0 0.0 0 0.0%


6a Other 0.0 0.0 0 0.0%

7a Irrigation 0.0 0.0 0 0.0%

8a Recycled 0.0 0.0 0 0.0%



11a Total Sales 32.3 31.3 (1) -3.2%


13a Unaccounted For Water (UAF) 6.1 11.9 6 95.7%

14a Total Requirement (Sales + UAF) * 38.4 43.2 5 12.4%

15a Total Requirement in Acre Feet 88.2 99.1 11 12.4%

WATER SUPPLY MIX:

16a Well Water 35.7 40.5 5 13.4%

17a Purchased Water 2.7 2.7 0 0.0%


19a Total Supply * 38.4 43.2 5 12.5%



1b Residential 27.7 26.4 (1) -4.5%

2b Business 1.4 1.6 0 15.7%


4b Industrial 0.0 0.0 0 0.0%


6b Other 0.0 0.0 0 0.0%

7b Irrigation 0.0 0.0 0 0.0%

8b Recycled 0.0 0.0 0 0.0%



11b Total Sales 31.945 30.9 (1) -3.2%


13b Unaccounted For Water 6.0 11.7 6 95.7%

14b Total Requirement (Sales + UAF) * 37.9 42.6 5 12.4%

15b Total Requirement in Acre Feet 87.1 97.9 11 12.4%

WATER SUPPLY MIX:

16b Well Water 35.2 39.9 5 13.4%

17b Purchased Water 2.7 2.7 0 0.0%


19b Total Supply * 37.9 42.6 5 12.4%



TABLE 2-3



CWS > DRA

CWS > DRA

1


46/120



Metered Revenues:

1a Residential 234.0 223.4 (10.5) -4.5%

2a Business 11.7 12.2 0.6 4.9%


4a Industrial 0.0 0.0 0.0 0.0%


6a Other 0.0 0.0 0.0 0.0%

7a Irrigation 0.0 0.0 0.0 0.0%

8a Recycled 0.0 0.0 0.0 0.0%


Unmetered Revenues:



Other Revenues:



15a Other 0.2 0.2 0.0 0.0%


17a Total Revenues at Present Rates, Test Year 2014 572.0 563.3 (8.7) -1.5%


Metered Revenues:1b Residential 357.7 353.0 (4.7) -1.3%

2b Business 17.9 19.4 1.5 8.5%


4b Industrial 0.0 0.0 0.0 0.0%


6b Other 0.0 0.0 0.0 0.0%

7b Irrigation 0.0 0.0 0.0 0.0%

8b Recycled 0.0 0.0 0.0 0.0%

9b Total Metered Revenues 412.9 413.0 0.0 0.0%

Unmetered Revenues:

10b Service Charge 429.5 429.5 0.0 0.0%



Other Revenues:



15b Other 0.3 0.3 0.0 0.0%


17b Total Revenues at Present Rates, Escal. Year 2015 842.7 842.8 0.0 0.0%


CWS > DRA

CWS > DRA


TABLE 2-4


1


47/120




1 Purchased Water 16.2 15.2 (1.0) -6.2%


3 Purchased Power 16.3 16.4 0.1 0.5%

4 Purchased Chemicals 1.8 2.0 0.2 12.5%

5 Payroll 107.3 109.9 2.6 2.4%

6 Postage 2.3 2.3 0.0 0.0%


Purchased Services:


9 Pumping 3.0 3.0 0.0 0.0%



13 Conservation 1.4 4.0 2.7 196.9%



15 Payroll 11.1 11.4 0.3 2.7%


17 Stores 0.0 0.0 0.0 0.0%



At Present Rates20 Operating Revenues 572.0 563.3 (8.7) -1.5%




At Proposed Rates






TABLE 3-1


CWS > DRA



1

Documents

DRA Report on Cal Water Redwood District Rate Case