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Rate increase request getting a closer look

Division of Ratepayer Advocates will investigate Valencia Water’s request for an 18 percent boost

Posted: February 23, 2010 9:33 p.m.
Updated: February 24, 2010 8:00 a.m.
 
The Valencia Water Co. wants to raise rates by almost 20 percent next year, but a state agency wants to take a closer look at the company’s finances before allowing the increase.

The proposed rate hike would mean the average household could be paying $6 more each month come January.

Valencia Water Co. President Bob DiPrimio said the increase is needed to pay for escalating water and power rates charged to the company, Santa Clarita Valley’s only private water company which serves more than 100,000 people via 30,000 connections. The California Public Utilities Commission oversees private utility retailers such as Valencia Water Co.

If approved by the commission, the increase would add $4.8 million in annual revenue to the company next year.

The water company is also requesting another 6.4 percent increase, or $2 million, in 2012, and a third increase of 2.2 percent, or $701,000, in 2013.

But the commission’s Division of Ratepayer Advocates say the company’s application “raises several areas of concern that merit further investigation.”

The division, whose mission is to obtain the lowest possible rate for services including water and power in California, stated in a Feb. 4 letter that it will take a closer look at Valencia’s proposals for water conservation, tiered rates and water budgets. The division will also conduct the usual review of the company’s requested rate of return, its sales and operating revenue forecast, estimated expenses and proposed rate design. Also, the division stated it is “seriously concerned” with the company’s water softening project.

DiPrimio noted that the division’s protest is a “standard process.”

“We look forward to working with them in understanding our needs and our application,” he said. “We’re sensitive to any increase in rates to our customers. We try very hard and work very hard to keep our costs down and provide excellent service to our customers.”

A pre-hearing conference with a state administrative judge has been set for March 2. A proposed schedule by the division suggests public hearings could be held in June. A state administrative judge may finalize the suggested schedule during a pre-hearing conference Tuesday.

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