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The Catalina Islander
Avalon, California
April 27, 2012     The Catalina Islander
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April 27, 2012

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Rates From page 1 the relief, as was made clear at the public hearing" Edison's current rates "are by far the highest in the state of Call'- fornia," Barnett said in his pro- posed decision. "We have disallowed approxi- mately $1 million of operating expenses; approximately $8 mil- lion in rate base; and by adopt- ing SCE's alternate rate proposal, shifted $10.7 ,million of increased costs in the water company's rate base as a 0ne-time cost to electric rates. The result of our disallow- ance and adjustments makes no change in the current revenue re- quirement of $3.948 million." If Barnett makes his proposed decision final, Edison and oppo- nents of the rate increase have a chance to comment. Both sides will have 25 days as of April 23 to comment on Barnett's proposed decision and five days to reply to each other's comments, according to Norris J. Bishton Jr., the attorney who rep- resented the opponents of the pro- posed rate increase. The decision will then go to the Public Utilities Commission. The commission may adopt all or part of the judge's decision as written, modify the decision, or set the de- cision aside. If that happens, the commission could make its own ruling. Bishton said he spoke with commission staff members. "They felt there was a 90 percent chance it would be approved," he said. Bishton said there was no way to know when the Public Utility Commission would act. "I've seen situations where you don't know anything for a year," Bishton said. He said Edison filed the:rate case in December 2010. "It is my hope that Edison will demonstrate concern for the rate- payers on Catalina Island by sup- porting the proposed decision, which upheld Edison's alternative rate proposal, allowing it to collect $10.7 million from its electric rate- payers," Bishton said. Edison representatives had mixed reviews for Judge Barnett's proposed decision. "The proposed decision from an administrative law judge in a proceeding be- fore the California Public Utili- ties Commission recognizes the Los usuarios con acceso al Irltemet podrn leer y descargar esta notificecidn en espafml en el siio Web de SCE o escHba a: Southern California Edison Company P,O. Box 800, 2244 Walnut Grove Avenue, Rosemead, CA 91770 Atencibn: Comunicaciones Corporativas SOUTHERN CALIFORNIA EDISON COMPANY (SCE) NOTICE OF PROPOSED DECREASE IN ELECTRIC RATES ASSOCIATED WITH THE AUTHORIZED COST OF CAPITAL APPLICATION FILING NO. 12-04-015 On Apdl 20, 2012, SCE filed its 2013 Cost of Capital Application with the Caifernia Public Utilities Commission (Commission). The Commission designated the application as Application (A.)12-04-015. In this application filing, SCE has requested that the Commission review and authorize a cost of capit for 2013, 2014, and 2015. The authorized cost of capital determines the amount of money SCE is allowed in rates as a return on its invested capital. In this proceeding, the Commission will determine.the reasonable costs of Iong-tarm debt, preferred stock, and common stock that are part of the authorized cost of capital The authorized cost of. capital adopted in this application will be applied to capita/investment authorized Jn SCE's pending General Rate Case (GRC) application. Assuming that SCE's requested capital investment is adopted in the GRC, SCE's annual revenue requirement will dtee by approximately $92.8 million beginning on January 1,2013. SCE is requesting a return on common equity of 11.10% and a return on rate base of 8.24%. SCE's requested cost of capital will fairly compensate those who invest in SeE, and permit SCE to attract capital to meet its obfigafions to serve its customers safely and efficiently. The following table shows an estimate of proposed revenues and rate changes by customer group. The percentage decrease in total revenue is $92.8 million or -.083%, beginning in 2013. Any revenue change resulting from this application will be consolidated with revenue changes from other SeE applications. If the Commission should approve total rates as requested, an average residential electric customer using 600 kilowatt-hours per month would expect to see a decrease of $1.01 per month, from $104.92 to $103.91. The following table shows current rates compared to an estimate of proposed revenue and rate changes by customer group. i . Customer Group Residential Lighting - Small and Customer Group Revenue Impact Cost of Capital Application for 2013 Revenue Change ($000) " -44,494 -32,588 % Change .0.99% -0.79% Bundled Present Rates (C/kWh) 18.06 15.27 Proposed Rates (#swh) 15.91 15.15 Medium Power Large Power -12,670 -0.60% 10.20 10.13 Agricultural and Pumping -2,813 11.66 11.56 r301 Street and Area Lighting Total 92,866 18.13 : 14.30 ,0.79% -0.23% -0.83% 18.09 14.18 As noted above, you may review  copy of this Application and related exhibits at SCE's corporate headquarters (2244 Walnut Grove Avenue, Rosemead, CA 91770). You may also view these materials at the following SCE business offices: 1 Pebbly Beach Rd. Avalon, CA 90704 505 W. 14 = Ave. Blythe, CA 92225 26364 Pine Ave. Rimforest, CA 92378 30553 Rimrock Rd. Barstow, CA 92311 3001 Chateau Rd. Mammoth Lakes, CA 93546 41694 Dinkey Creek Rd. Shaver Lake, CA 93664 120 Woodland Dr., 6999 Old Woman Springs Rd. Wofford Heights, CA 93285 Yucca Valley, CA 92284 374 Lagoon St., Bishop, CA 93514 510 S. China Lake Blvd., Ridgecrest, CA 93555 421 W. J St., Tehachapi, CA 93561 Customers with Inernet access may view and download SCE's application and the papers supporting it on SCE's Web site, www.sce.cundapplicationa. Anyone who would like to obtain more information about the application, =lease write to: Southern California Edison Company P.O. Box 800, 2244 Walnut Grove Avenue, Rosemead, CA 91770 Attention: Case Administration The CPUC may hold evidentiary hearings whereby formal parties of record provide testimony and are subject to Cress-examination before a CPUC Administrative Law Judge (ALJ). These headngs are open to the public, but only those who are formal parties of record may participate. The CPUC has its own court reporters who will record the omments of those formal parties of record participating in the evidentiary hearings. After considering all proposals and evidence presented dudng the formal hearing process, the assigned ALJ will issue a proposed decision. When the CPUC issues a final decision on the application, it may adept, amend, or modify all or part of the ALJ.'s proposed decision as written. The CPUC's decision may be different than SCE's request. The Division of Ratapayer Advocates (DRA) is an independent arm of the CPUC, created by the Legislature to represent the interssts of all utility customers throughout the state to obtain the lowest possible rates for service consistent with reliable and safe service levels. DRA has a multi-disciplinary staff with expertise in economics, finance, accounting, and engineering. You may submit written comments to the CPUC's Los Angeles Public Advisor's Office at the address or e-mail shown below. The Public Advisor California Public Utilities Commission 320 West Fourth Street, Suite 500 Los Angeles, CA 90013 Or by e-mail: Pub/ Please state that you are writing concerning SCE's application A.;12-04-015. Your comments will become a part of the formal correspondence file for public comment in this proceeding. The Public Advisor's Office will circulate your comments to the five Commissioners, the ALJ, DRA, and to CPUC staff assigned to. this proceeding. You may also write to the CPUC if you need advice on how to participate in this proceeding, or would like to receive further notices regarding the date, time, and place of any hearing on SCE's application. You may also review a copy of this Application and related exhibits at SCE's corporate headquarters (2244 Walnut Grove Avenue, Rosemead, CA 91770). Finally, copies of the application can be obtained via the CPUC Formal Files Office, 565 Van Ness Avenue, San Francisco 94102. Office hours are 8:00 a.m. to noon Monday - Friday. April 2012 majority of the capital upgrades on Catalina Island were neces- sary. But SCE disagrees that some capital improvements were too ex- pensive," said a joint statement by Ben Harvey, Edison Local Public Affairs region manager, and Ron Hite, SCE Catalina Island Trans- mission and Distribution district manager. "Enhancements, repairs and operations on Catalina Island are very expensive; it is h remote, isolated island. Other California water utilities do not have com- parable operating costs or fixed costs spread among only about 2,000 customers," said the South- ern California Edison statement. "SCE inherited the water system decades ago from the city of Ava- lon and William Wrigley, who designed and built it for his fam- ily. SCE made substantial capi- tal investments in recent years to serve the entire island and replace aging infrastructure and business systems at a cost of more than $15 million to provide safe and reliable water, and should be permitted to recover those costs from those benefiting from the upgrades," the statement said. "SCE hopes that when the California Public Utilities Com- mission takes up this issue, it will acknowledge that need and rule accordingly," the Edison state- ment said. The groUp opposing the rate increase are the city of Avalon, the Catalina Island Conservancy, Santa Catalina Island Company (now called Santa Catalina Re- sort Services), the Catalina Island Chamber of Commerce, the Ham- itton Cove Homeowners Associa- tion, the campgrounds represented by Guided Discoveries and condo and apartment owners represented by the Conference of Catalina Condos and Apartments. The op- ponents are collectively known as the Consortium, which is trying to acquire the water company from Edison and turn it into a publicly, owned water company. Edison sought to have $14,634,000 of claimed capital ex- penditures added to its rate base, which would then be repaid by ratepayers with 8.75 percent inter- est in future bills. Judge Barnett allowed Edison only $6,590,000, or 45 percent of the amount re- quested, and then included it in the $10,700,000 Edison can col- lect from electric ratepayers. According to Bishton, Judge Barnett made his decision based on the fact that approximately 750,000 visitors come to the Is- land each year. Bishton said in some cases Is- landers pay 20 times more for wa- ter than other California residents. "Rates on Catalina are four to five times higher than Monterey," he said. "This is a big thing on the Is- land, let me tell you," he said. Edison sought $2,327,000 for a computerized control system, when its total income in 2009 was $3,843,870. In rejecting this expenditure, Barnett said that the "system is too expensive for this small water company." With re- gard to Pump House No. 2. Bar- nett rejected Edison's demand for $4,568,000, granting it only $2,500,000, deeming that amount the "reasonable cost" of the pump house. Judge Barnett also rejected Edison's request for $3,204,000 in expenses related to the 2007 Cata- lina fire. Edison carried fire in- surance with a $5 million deduct- ible, which Barnett said was "not reasonable," holding that Edison should have carried fire insurance with a $5,000 deductible. Consortium Attorney Bishton said that "in reaching his decision. ALJ Barnett was unaware that Ed- ison will receive $8,600,000 from the settlement in the 2007 fire liti- gation." Bishton said a copy of the pro- posed decision would be posted on on Wednesday, April 25. BIRTHDAYS APRIL 27, 2012 Shawn Hall Pat Jamieson Sarah Munoz APRIL 28, 2012 Sylvia Rivera Travis Moran APRIL 29, 2012 Mario Chavez Juan Romero :. Bfandon Castellanos APRIL 30, 2012 Tasha Romo Richard Rinehart Donna J. Romo Eve Davis Christine MacMillian Michael Garcia Nicholis Wood Billy Boyd III MAY 1, 2012 Troy Mead Jason Elliot Deanna Stone Sana Hemandez Richard Reyes Rosemary Reyes MAY 2, 2012 Gayle Saldana Philip Hernandez Shuana Machado Diego Padilla Taylor Schatan Savannah Felix-Amoroso Jennifer Boyd Kathy Connelty MAY 3, 2012 Kerry Ellen Ponce Andrea Grate Kordyak Sally Mora Zoe Hernandez Kayla Hiniker Marcus Wenger Daniel M ello Katy Moritz Davis 4 i Friday, April 27, 2012 THE CATAUNA ISLANDER