California American Water Reaches Partial Settlement Agreement in Its General Rate Case on Revenues for 2024 through 2026
Earlier today, California American Water filed with the California Public Utilities Commission its partial settlement agreement for its statewide General Rate Case to set revenue for 2024 to 2026. The filing memorializes the settlement agreement reached with the Commission's Public Advocates Office. Remaining topics, such as rate design and revenue stabilization mechanisms, were the subject of hearings held in October 2023 and remain pending.
Under the terms of the settlement, California American Water is entitled to additional annualized water and wastewater revenue increases of $19.96 million in test year 2024, $15.51 million for escalation year 2025 and $15.44 million for attrition year 2026. The settlement agreement also strengthens California American Water's Customer Assistance Program discounts from 20 percent to 25 percent off the typical bill for qualified residential customers in Northern and Southern California and from 30 percent to 35 percent in Central California.
Rate cases are legal proceedings used to address the capital investment needed for infrastructure, the costs of operating and maintaining the utility system and the allocation of those costs among customer classes. Regulated water utilities like California American Water are required by law to file a General Rate Case every three years with the CPUC to set revenues and rates.
California American Water will prepare to implement the new rates retroactively to January 1, 2024, upon receiving the CPUC's decision on the settlement agreement and outstanding topics related to rate design and revenue stabilization mechanisms. While other parties are involved in this General Rate Case, the settlement announced today is with the California Public Advocates Office. Customers will receive more information ahead of the implementation of new rates in each of California American Water's water and astewater service areas, as well as information about customer assistance and conservation programs.
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