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Operator: Welcome to the
California Public Utilities Commission.
This is the Remote Public Participation Hearing
for Golden State Water Company's Cost of Capital case
scheduled to start at,
6 PM today, March 17th, 2022.
The Administrative Law Judge
will begin the meeting shortly.
If you wish to participate by making a comment
during today's hearing,
please unmute your phone, press star one
and record your name and organization when prompted.
You will then be placed into a queue
in the order that you called in.
When it comes time for you to speak,
I will announce your name
and then I will open your line.
The Administrative Law Judge will be providing
a time limit of three minutes for each speaker
to accommodate the callers.
You will hear a chime at the end of your three minutes.
To withdraw your request to speak, please press star two.
If you are a public official and wish to speak,
please identify yourself by title and locality
and let the operator know that you are a public official.
If you have a question that you want to ask
Golden State Water Company
during this public participation hearing,
you may contact any of the three
senior customer service representatives
who will be on standby to take your calls.
Those senior customer services representatives
are Ruth Ogando, Tasha Spearman and Vanessa De La Cruz.
They can be reached at,
877-288-8816
or by email at 2021COC@gswater.com.
Golden State Water Company representative John Prate
is a also available at 909-394-3600, extension 656
to take to any other questions.
-: Thank you, operator.
Court reporters, are you ready to go?
Backy: I'm ready, your honor.
-: Thank you.
We will be on the record
and the Commission will come to order.
It is March 17th, 2022
and this is the Remote Public Participation Hearing
for Golden State Water Company's Cost of Capital case.
The application number given to this proceeding
by the Commission is A-21-05-003.
And I note that I may refer to Golden State Water Company
as Golden State or Golden State Water
throughout this evening.
My name is Robert Haga,
and I am the assigned Administrative Law Judge
on this proceeding.
I expect to be joined shortly
by the assigned Commissioner, Darcie Houck
and her advisor is here, Candace Choe.
All documents related to this proceeding
can be found on the Commission's website
and at the docket card in supporting documents type
of the efile documents.
Search under A2105003.
I note that in setting up these hearings,
I directed parties to identify presenters
for the public participation hearings,
but after reviewing our timeline, process and scope,
I determined it is more important
to get to the public comment sooner
instead of taking up additional time
for presentations from parties
that have many opportunities to provide input
during the proceeding.
Please note that the audio and visual feed
of this public hearing are being recorded
and will be accessible on the Commission's website
for the public to access and to watch.
If you do not wish for your comments to be recorded,
please do not make a statement
since this hearing is being recorded.
The purpose of today's hearing is for the Commission
to hear from the customers and members of the public
about Golden State Water's request
to increase its cost of capital,
which is found again in application 2105003.
As the issues of law, in fact, presented in this case
are closely related to those presented
in other Class A water utility
costs of capital applications.
This proceeding is consolidated
with applications 2105001, 002 and 004.
Public participation hearing
specifically for those applications
have recently occurred
or are scheduled to occur next week.
Though any comment made today about those applications
will be noted into consolidated consideration
of the applications and vice versa.
Before I cover some background
and we get to the public comment portion
of today's hearing,
I wanna give the Commissioner or her representative
an opportunity to speak.
Miss Choe on behalf of the Commissioner, go ahead.
-: Thank you, Judge Haga.
Good evening, my name is Candace Choe
and I'm a legal and policy advisor
to Commissioner Houck.
While Commissioner Houck could not join us this evening,
I am here on her behalf and will read a brief statement
that she has prepared.
"I would like to thank you all for taking the time
to provide your comments on this important matter.
I appreciate the opportunity to hear from you
before we make our final decision in this proceeding.
The cost of capital that is approved in this proceeding
affects utility rates.
And I know that is always a concern for customers,
especially rates for water,
which are an essential resource."
I will be ensuring that the Commissioner receives
the transcribed comments
from tonight's public participation hearing.
And so, I would particularly like to thank
our court reporters, Doris Homan and Rebekah De Rosa.
I'd also like to thank Judge Haga
and the public advisor's office
for hosting our event tonight,
especially Allison Brown, Juanita Hill, Eric Sawyer,
Christine Mullin and Claudia Sanchez.
I'd also like to thank our IT staff,
Robert Stanford, Joseph Haga and Francisco Hernandez.
We could not hold these hearings without their support.
Thank you and I'll turn it back over to Judge Haga.
-: Thank you, Miss Choe.
As I mentioned earlier,
the purpose of today's hearing
is for the Commission to hear from customers
and members of the public
about Golden State Water's request
to increase its cost of capital.
Golden State Water is requesting an increase
in the rate of return on rate-base
from 7.91% that is currently set
to 8.1% for the period from January 1, 2022
through December 31st, 2024.
Again, the request can be found
at the four mentioned application 2105003.
If you have unrelated to the proposed rate increase
such as a question about a service problem
for bill and accuracy,
Golden State Water's customer service representatives
are available by phone now
and you are encouraged
to contact Golden State Water's customer service center
at 1-877-288-8816.
You can also email them at 2021COC@gswater.com.
Also, a Golden State manager is present at this hearing
and listening to learn from customer feedback.
Golden State Water Company representative John Prate
is also available at 909-294-3600, extension 656
to take any other questions.
We will not be able to provide answers to questions today,
but the Commission's public advisor's office
is listening to this hearing
and a representative will introduce herself soon
and provide contact information
for how you can reach out to us
with questions about the proceeding.
Before we get started, I'll cover three things.
First, I'll provide some general background
on the California Public Utilities Commission.
Second, I'll summarize the basic positions
in this Golden State Water Cost of Capital application.
Third, I'll turn it over to miss Juanita Hill
from the Commission's public advisor's office
to provide more information on public participation
and how to submit comments,
on this case to the Commission.
Then finally, I'll ask the speakers to get prepared
to make their comments
and we'll begin the public comment portion
of today's hearing.
Right now, I'll repeat the instructions
for how to participate.
So if you wanna participate today
and provide a comment during this hearing,
if you're already on the phone, please press star one
if you haven't already
and provide the operator your name.
if you're watching the video webcast,
please dial the phone number on your screen
and then press star one
and provide the operator your name.
Now the first item I said I would cover
is the background on the Public Utilities Commission.
The California Public Utilities Commission
is the state agency that is required to decide
how much money Golden State Water may earn
and how much Golden State Water is allowed to charge
in rates included on your bills for water service.
By state law,
the Commission includes five Commissioners
who are each appointed by the Governor
of the state of California
and then confirmed by the California state senate.
The five Commissioners make the final decision
on Golden State Water's request
to increase its cost of capital in this case.
As the Administrative Law Judge in this proceeding,
I manage the day-to-day activities of the case
and make recommendations to the five Commissioners.
The five Commissioners are the ones who will decide
with a vote
whether to approve Golden State Water's request
to increase its cost of capital.
Again, my role as the Administrative Law Judge
is to evaluate the evidence presented in this proceeding,
including comments provided today
and recommend an outcome to the five Commissioners
in a proposed decision based on the evidence.
This proposed decision or recommendation
will then be considered by the five Commissioners
who will decide whether to adopt the proposed decision
or to instead adopt their own different decision
based on the evidence in the proceeding.
The current schedule for this proceeding
anticipates that the five Commissioners
will vote on final decision
in the fourth quarter of 2022.
Now I'll provide a summary
of Golden State Waters application.
In May, 2021, Golden State Water submitted
its cost of capital application
seeking the Commission's authorization
to set new equity returns, cost of debt,
capital structures and overall rates of return
on rate-base for the period 2022 to 2024.
The Commission requires Golden State Water Company
to seek approval for these things every three years.
In its application,
Golden State Water proposes the Commission
approve an increase to its authorized cost of capital
from 7.91% to 8.18%.
To proposed rate of return
reflects a proposed 10.5% cost of equity
and a proposed 5.1% cost of debt.
Golden State Water states
the proposed cost of capital increase
will increase its authorized revenue requirement
by approximately 2% company-wide
based upon at the time of the application.
Though, the increase in annual revenues
will vary by rate making area
and I note that this estimate is based on many factors
and does not reflect what might change
with your monthly bill.
The other party participating
in the Golden State Water portion of the proceeding,
the Public Advocates Office
has submitted testimony calling for a reduction
in the authorized cost of capital
from the current 7.91% to 6.44%.
As I mentioned earlier,
detailed information regarding
the different recommendations is available
on the Commission's website.
Now, while we are here today to receive comments
from the public and customer
on Golden State Water's request
to change its authorized cost of capital
and increase rates beginning in 2022 through 2024,
I wanted to acknowledge that the pandemic
has imposed hardships and changes
throughout our state, communities
and in our daily lives.
We are holding these hearings online and by phone
because of ongoing concerns regarding the pandemic.
And while the current trends are positive,
the Commission must schedule these hearings
many months in advance.
Further, we have found during the pandemic
that remote hearings provide a convenient way
for many to participate
while also promoting greater understanding
of the impact of great changes.
Public engagement remains critical to the Commission.
I and all the Commissioners
will be paying careful attention
to the comments provided today.
And we all have the ability to review
the written transcript of this public hearing
being created by the court reporters
who be working behind the scenes
throughout today's hearing.
Court reporter will be transcribing everything
that is said today into a written document.
Thus, if you speak,
I ask that you speak slowly and clearly
so that the reporter and the interpreters
can capture everything that is said.
At the beginning of your comments,
please spell your first and last name
and provide the city you're calling from.
The written transcript of today's hearing
created by the court reporters
will be posted publicly on the docket card
for this proceeding on the Commission's website
in the next few weeks.
You should also know that while we welcome you
to provide verbal comments today,
you may provide written comments at any point
on Gold State Water's proposed rate increase request
on the docket card for this proceeding.
By going to the Commission's website,
go to the docket card
and enter this proceeding number A2105003.
You can get there directly with the URL,
apps.cpuc.ca.gov/c/A2105003.
That's apps.cpuc.ca.gov/c/A2105003.
You can also continue to review the filings
by Golden State Water and other parties in this case,
on the Commission's website.
In a subscription option exists on the docket card
for members of a public to receive filings by email.
As I had mentioned before,
the docket card of this proceeding
has the option for customers
to submit written comments at any time
during the proceeding.
Please note that I am tracking these comments.
I set aside time every week to review them
and I update the Commissioner on public comments
on a regular basis.
And I will include a summary of the comments
that the PSH's and on the docket card
in my recommendation to the Commission
when I put together a proposed decision.
I note that as of today,
we have 36 written public comments
on this case already.
The main purpose of today's hearing then
is to hear directly from you
as Golden State Water customers
and members of the public
about this particular request
to modify rates for water services.
To provide even more information
on how to participate,
I invite Ms. Juanita Hill
of the Commission's Public Advisor's Office
to provide guidance on participation in the hearing.
Ms. Hill.
Operator: You're on mute.
-: I'm so sorry, can you hear me now?
Operator: Yes, I can.
-: Thank you, judge and welcome everyone.
My name is Juanita Hill and I am the supervisor
in the CPUC's Public Advisor's Office.
The Public Advisor's Office assist
in advising the public with participation
in Commission proceedings.
We are here as a resource for you.
Your participation is essential
to the decision-making process.
In addition to making a comment today,
as the judge said,
there are other ways to become involved.
If you wish to find more information
on becoming a party subscribing to this proceeding
or submitting written comments to the docket card,
please visit our website www.cpuc.ca.gov.
Email the public advisor at public.advisor@cpuc.ca.gov.
Give us a call at 1-866-849-8390
or visit our public participation hearing page
www.cpuc.ca.gov/PPH
and the Commission or the utilities websites
for more information.
All of this information is also on the notice
that you received for this public participation hearing,
as well as on the screen if you are watching this forum.
We look forward to your comments today.
Thank you and back to you judge.
-: Thank you, Ms. Hill.
As a reminder again,
if you wish to speak today and make a statement
and you're on the phone, please press star one
and then provide the operator with your name.
If you're watching the video webcast,
please dial the phone number on your screen
and press star one to provide the operator your name
and make a statement.
And at this point,
I think we are ready to hear from members of the public.
To those that wish to speak,
please, if you remember to call in and press star one.
When it's your turn to speak,
the operator will announce your name.
Please spell your full name,
speak slowly and provide where you're calling from.
Right now, we do not have a large number of callers
in the queue,
so I'm not gonna be strict about the three minute limit,
but if it ends up we have a lot more,
we will start to get a little bit tighter on time.
And it's due to chime at the three minute mark.
And I remind people to speak slowly and clearly
so the court reporters
may accurately transcribe your comments,
and please mute anything that may feed back our noise
into your phone when not speaking.
Please speak directly to your phone or headset
and do not use a speaker phone
if you're providing a comment.
Operator, please ask the first person
in the queue to speak.
Operator: Thank you.
Our first speaker is George Riley.
Your line is open.
George: All right, can you hear me?
-: Yes, Mr. Riley, good to hear from you.
George: Yeah, thank you, my name is George Riley.
I live in Monterey.
George, G-E-O-R-G-E.
Riley, R-I-L-E-Y.
I'm a customer of CalAm,
California American Water.
I know this public hearing for CalAm
was scheduled a couple days ago,
but I had conflict so,
and I understand I can still make a comment
as of tonight.
My purpose here is to try to call attention
to the purpose,
the mission of the Public Utilities Commission.
And I understand from Section 701.1,
the mission is to assure that the utilities
have an opportunity to earn a reasonable return,
to attract capital
and to ensure financial integrity.
That's the number one mission of the PUC.
That's fine,
I don't have any problems with that,
but I do have a problem with when does greed
exceed your concern
about the viability of corporate utilities?
When does greed of an applicant
like California American Water,
when does greed go beyond what's a reasonable return?
When does greed go beyond
the intention to attract capital?
When does greed go beyond your assurance
that a corporate utility has financial integrity?
My concern is that California American Water,
a subsidiary of American Water Works
is one of the highest rated utilities
on the New York Stock Exchange.
Its value has increased over 600% in the past 10 years.
CalAm and the American Water Works is doing very well.
My problem with its application of its rate structure
on our community in Monterey,
on Monterey Peninsula,
is that we have had the highest rates
in the entire country for several years.
CalAm subsidiaries in general
are the six highest rates in the entire United States.
My concern is that CalAm is greedy
and you, the PUC is a handmaiden to their request
for more access to a revenue source from its customers.
It's a monopoly.
We have nowhere to go, but to CalAm.
So it's not like there's a huge competition
that CalAm is creating in the world of water
and you know that,
but we have a burden on our local rate payers
and we do not need your help
or your support for CalAm,
even creating a higher rate structure
for our community.
I just asked, when is enough enough?
And I asked you, please,
do not support CalAm's request
for an increase in cost of capital.
This has nothing to do with the other agencies
that you're concerned about tonight,
but it has specifically reference
to California American Water.
And I appreciate your review of this concern I have.
Thank you very much.
-: Thank you, Mr. Riley.
Operator, next caller.
Operator: Our next caller is Dustin Cook.
Your line is open.
Dustin: Hi, my name is Dustin Cook.
That's D-U-S-T-I-N, C-O-O-K.
I'm a resident of the Monterey Peninsula
and I too am calling concerning
the CalAm rate increased request
and would voice my opposition to that increase
and ask the Commission to just follow
the advice of the Public Advocate Office
that increase is not necessary,
in fact, a reduction is recommended
by the Public Advocate Office.
We suffer as Mr. Riley pointed out the highest rates
in the (indistinct)
and any increase in profit on those high rates
it's substantiate in my mind.
Of course, we all bear a huge risk,
a huge burden of the cost of water
and I don't see any (clears throat) justification
for their asking for this increase.
They state that the increase is asked
to mitigate possible risks in the future.
And I we'd ask what risk does a monopoly have,
they're gonna charge a percentage
on whatever their costs are.
And I'm sure one of these days,
one of their costs will be the few old rates
and either related items
that we're suffering through right now immediately.
Further, CalAm is already granted
the highest rate of water unit rate
and their profit is based on that rate.
And I can't see that additional profits are necessary.
I'm certainly not seeing additional service.
And I won't go into the service,
I feel is lacking.
And (indistinct) lastly,
I understand that several of CalAm's subcontractors
have been calling in- (indistinct)
Backy: I am so sorry,
I'm having trouble hearing you,
if you can adjust your audio, please.
Dustin: Okay. (clearing throat)
Lastly, I would like to say that I understand
that several of CalAm's subcontractors
have been calling in to promote this increase
if you will.
And really they're not consumers
and they're doing this
at the sort of the sneaky bequest of CalAm,
and that's who they are.
And those people should not be considered in this.
I think the, us as the consumers
and the bears of this burden
should be the one that are considered.
And again, I would plead with you
to follow the Public Advocate's recommendations.
Thank you for listening to my comments.
I appreciate it and that's all.
-: Thank you, Mr. Cook.
Operator, who's next caller?
Operator: Our next caller is a Peter Kavounas.
Your line is open.
Peter: Thank you.
Good evening, Judge Haga.
I appreciate the opportunity to offer my comments.
My name is Peter Kavounas.
P-E-T-E-R, K-A-V-O-U-N-A-S.
I live in Claremont, California
served by Golden State.
I'm calling today to speak against the proposed increase
in the rate of return for Golden State.
Judge, you, your job is to evaluate the evidence,
consider the rules and issues of law.
In this particular case, as an individual rate payer,
I must consider the effect.
The rates in Claremont are sky high.
By comparison, I looked at my January bill,
it was $115 for the meter
and the commodity charges only.
Next door in Montclair,
less than two miles away from my house,
the same usage and the same size meter
would've been $80.
About $30 less than $115 bill.
Nearby Upland, maybe two miles away from my house,
that same bill, the same commodity and meter charge
would've been $70, that's $45 less on $115 bill.
And judge, all else is equal between the three utilities,
Golden State, Monte Vista Water District.
and the city of Oakland.
The same cost of imported water,
the same groundwater source with the same lift,
the same electricity cost,
the same fuel cost, the same labor market,
the same age of service area
and the same topography,
there is no reason that the all ultimate rates
are that high.
The profit increase as proposed only makes it worse.
I respectfully request judge
that you find for the Public Advocates recommendation
to reduce the cost of capital.
And in addition, if I'm permitted,
I would respectfully ask for a special review
of the application of the PUC rules
to the Golden State's rates
and how it is that they've come to be this high
on the service area.
Thank you very much again
for the opportunity to comment.
-: Thank you, Mr. Kavounas.
Operator, who's the next speaker?
Operator: Our next speaker is Autumn Anderson.
Your line is open.
Autumn: Hi, thank you for allowing me
to express my thoughts on this.
My concern regarding rate increases
is it does not appear that there's any intention.
-: Can you spell your name for me, please?
Autumn: Oh, I'm so sorry, yes.
It's A-U-T-U-M-N,
and the last name is Anderson, A-N-D-E-R-S-O-N
and I live in Morongo Valley,
so I am using Golden State Water.
Sorry about that. (indistinct)
So yeah, I could understand rate increases
that were attempts to perhaps curtail extra water usage
or something like that,
looking towards future need
or something like that
in the environmental risk area,
but increasing rates just to increase revenue
or for perhaps building some kind of cushion
in the budget or something like that is concerning
because obviously droughts are not going away.
And I respect the fact that we need to ensure
that these agencies continue
and can continue to provide water.
However, there's so many factors that are involved
and one of them is not considering both financial impacts
as well as the actual water usage itself.
I definitely could not support the increases
to the rates for other reasons.
Thank you.
-: Thank you, Ms. Anderson.
Operator, is there anyone in the queue?
Operator: Your honor, there are no more speakers
in the public comment telephone line.
-: Okay, well, while we can take a little break then
and we'll take a five minute break to provide time
for others to call in.
Reminder, if you're on the phone,
you can just hit star one
and give the operator your name.
If you're watching online on admin monitor,
the number is on the screen.
Please call and hit star one to get in
and make your comment.
We will be off the record for five minutes.
Thank you.
Narrator: For your patience.
The feed...
Haga: You ready, Becky?
Becky: Ready, your honor.
-: Great, then we're back on the record.
Operator, understand we have another caller.
Operator: Yes, our next caller is Diana Morales.
Your line is open.
-: Ms. Morales.
Diana: Oh, I'm so sorry.
So, Diana Morale, M-O-R-A-L-E-S.
I live in Simi Valley
and I am a Gold State customer,
sorry, you can hear my goats in the background.
I just want you to know I'm in support of this
if it goes toward repairing the existing facilities
that are failing,
because I know that they've been an underground
for so long.
And even today in the city of the Simi Valley,
we had a sinkhole
and I don't know if it was Golden State,
it could be another water company that's here.
But I also understand
that we can't see these facilities,
so we tend to ignore them.
First, I just also also wanted to thank you
for your service,
because if it weren't for you,
I would have to live near a river
and carry my water in a bucket back and forth,
and water's heavy.
So I just want you to know that I'm in favor of this
as long as it goes toward
or at least is going to contribute
toward the repair of these facilities,
because they're pretty much at capacity
and they're failing.
They were put in a time ago
and I'm just assuming there isn't any money
to make the improvements when they're necessary.
So that's all I wanted to say.
And I also understand that
things get more expensive as time goes on
and I understand that we're going to have reductions
because it's not raining enough,
but I've been a Golden State customer for a long time.
I'm very happy with your service
and it's unfortunate for everyone,
but this is how it goes.
Unless we all wanna carry water from the river
in a bucket,
we have to pay for additional fees
when they're deemed necessary.
So that's really all I wanted to say,
thank you for your time.
-: Thank you, Ms. Morales.
Operator, who is the next speaker?
Operator: Yes, as a reminder,
if you would like to make a comment,
please press star one on your telephone keypad
and record your name at the prompt.
Our next caller is Denise Shigenaka.
Your line is open.
Denise: Thank you very much
for taking my comments at this time.
I am a Golden State...
I'm sorry, Denise Shigenaka.
D-E-N-I-S-E.
Shigenaka, S-H-I-G-E-N-A-K-A
from Aukat, California.
We are a Golden State Water customers.
When our Golden State area purveyor
added Nipomo to our little service area,
they raised our rates excessively
to cover Nipomo being added on.
They also raised our rates in advance
to save up money for repairs and improvements
in our area.
That was several years ago
and no major improvements that I am aware of
have been done.
So that money should have been collecting
for the last 10 years.
We've had additional increases periodically.
I object to excessive increases.
And at this point I feel this amount
that they're asking for is excessive
since we have not yet used as far as I know,
the money that we have been putting into
for the last 8 to 10 years.
So I appreciate my service.
I am so sad that there is not a competitive market
to have more than one purveyor
so you can choose.
But Golden State here does do a nice job of service
and I appreciate that,
but I'm at a very tenuous time in society
that we need to kind of tighten our belts
and make sure that we're using
all of the dollars we already have
in a just and judicious manner.
So thank you very much for listening to me.
-: Thank you, Ms. Shigenaka.
Operator, is there anyone else left in the queue?
Operator: Your honor,
I'm showing no further commenters
in the public comment queue.
-: Well, if that's the case,
then if you would like to provide,
you may submit written comments
on the docket card for this proceeding,
which can be found again at the Commission's website.
Search for A2105003,
the number of this proceeding on the docket card
and that will get you to the area to submit comments.
You can also get there directly by using the URL
apps, apps.cpuc.ca.gov/c/A2105003
Also for assistance with providing additional comments,
please contact the Commission's Public Advisor's Office
at public.advisor.cpuc.ca.gov.
And at this point, I will conclude
this evening's public participation hearing
in Golden State Water Company's Cost of Capital case.
We'll be off the record.
Goodbye.