Final Report, 2010 Urban Water Management Plan - Culver City

8.5 Revenue Impacts of Reduced SalesSection 10632(g) of the Act requires an analysis of the impacts of each of the actions taken forconservation and water restriction on the revenues and expenditures of the water supplier.Because GSWC is an investor-owned water utility and, as such, is regulated by the CPUC, theCPUC authorizes it to establish memorandum accounts to track expenses and revenueshortfalls caused by both mandatory rationing and voluntary conservation efforts. Utilities withCPUC-approved water management plans are authorized to implement a surcharge to recoverrevenue shortfalls recorded in their drought memorandum accounts. Table 8-7 provides asummary of actions with associated revenue reductions; while Table 8-8 provides a summary ofactions and conditions that impact expenditures. Table 8-9 summarizes the proposed measuresto overcome revenue impacts. Table 8-10 provides a summary of the proposed measures toovercome expenditure impacts.Table 8-7:TypeSummary of Actions and Conditions that Impact RevenueAnticipated Revenue ReductionReduced salesRecovery of revenues with CPUC-approvedsurchargeReduction in revenue will be based on the decline inwater sales and the corresponding quantity tariff rateHigher rates may result in further decline in waterusage and further reduction in revenueTable 8-8:CategoryIncreased staff costIncreased O&M costSummary of Actions and Conditions that Impact ExpendituresAnticipated CostSalaries and benefits for new hires required toadminister and implement water shortage programOperating and maintenance costs associated withalternative sources of water supplyIncreased cost of supply and treatmentPurchase and treatment costs of new water supplyTable 8-9:Names of MeasuresObtain CPUC-approved surchargePenalties for excessive water useProposed Measures to Overcome Revenue ImpactsSummary of EffectsAllows for recovery of revenue shortfalls brought on by watershortage programObtain CPUC approval to use penalties to offset portion ofrevenue shortfallPage 8-8Final Report, 2010 Urban Water Management Plan – Culver CityGolden State Water Companyg:\adminasst\jobs\2010\1070001.00_gswc-uwmp\09-reports\9.09-reports\2011-08\grp3\gswc_culvercity_2010_uwmp-final.doc