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Legal Notices: Notice Of

Legal Notices: NOTICE OF TECHINCAL WORKSHOP AND EVIDENTIARY HEARINGS REGARDING FEDERAL TAX CHANGES AS PART OF CALIFORNIA AMERICAN WATER'S GENERAL RATE CASE APPLICATION (A.) 16-07-002 A technical workshop and evidentiary hearings have been scheduled for the following dates and times at the California Public Utilities Commission (CPUC) Courtroom, 505 Van Ness Ave, San Francisco, CA: Technical Workshop: April 17 at 10:00 a.m. Evidentiary Hearings: April 17 at 1:30 p.m. and April 18 at 9:30 a.m. Summary On July 1, 2016, California American Water filed General Rate Case (GRC) Application 16-07-002 with the CPUC. A technical workshop and evidentiary hearings have been scheduled by the CPUC to review a subset of the GRC and the Tax Cuts and Jobs Act's impact on California American Water's revenue requirement. They are open to the public but only those who are parties to the proceeding may present evidence, testimony, and be subject to cross-examination. The hearings and documents submitted during this proceeding will become part of the formal record the Administrative Law Judges (ALJs) will rely upon in writing a proposed decision to present to the Commissioners for their consideration. The technical workshop will specifically cover the following topics: 1) Walk-through of the Results of Operations (RO) model on changes made to reflect the 2018 federal tax law. 2) Calculation of the Excess Deferred Tax Liability. 3) Comparison of the Average Rate Assumption Method and the Reverse South Georgia Method. These are approved normalization accounting methods for determining the timing for returns of excess deferred income taxes. The evidentiary hearings will specifically cover the following topics: 1) The Tax Cuts and Jobs Act's corporate tax rate reductions. 2) The tax reduction's impact on California American Water's revenue requirement, as filed in the 2016 GRC. 3) How the reduced tax liability can be passed onto customers to lower their water rates. Please note: The CPUC's Courtroom is wheelchair accessible. If you wish to attend and need specialized accommodations, please contact the Public Advisor's Office (PAO) at least five business days prior to the hearing date. Any changes to the dates, times and locations of the hearings will be posted to the CPUC's Daily Calendar. Customer Impact The technical workshop and evidentiary hearings are being held solely to discuss the impact of the federal tax changes. If approved, California American Water's 100 day update revenue requirement for its test year 2018 would be reduced by $7,664,288, or -3.12%.* The CPUC Commissioners have urged utility companies to pass along some of the financial benefits of the corporate tax rate reduction, to their customers. How these savings can best be passed along to customers and how that will affect the 2016 GRC revenue requirement and increases is still unknown at this time. Obtaining a Copy of the Application A copy of California American Water's proposed GRC application and related exhibits may be reviewed at the following California American Water office: 8657 Grand Avenue, Rosemead, CA 91770. Copies of the proposed application are also available to review at the CPUC's Central Files Office in San Francisco by appointment. For more information, please contact the CPUC at aljcentralfilesid@cpuc.ca.gov or (415) 703-2045. The CPUC's Process After considering all proposals and evidence that may be presented during the formal hearing process, the ALJs will issue a proposed decision which may adopt California American Water's GRC application as proposed, modify it, or deny it. The proposed decision may determine how the recent federal tax cuts will affect customer rates. Any of the five CPUC Commissioners may sponsor an alternate decision. The proposed decision and any alternate decisions will be discussed and voted on at a scheduled CPUC Voting Meeting. Stay Informed If you would like to follow this proceeding, or any other issue before the CPUC, you may use the CPUC's free subscription service. Sign up at http://subscribecpuc.cpuc.ca.gov/. If you would like to learn how you can participate in the proceeding, provide informal comments, or have questions about the CPUC's processes, you may access the CPUC's Public Advisor's webpage at http://consumers.cpuc.ca.gov/pao/. You may also contact the Public Advisor as follows: Email: public.advisor@cpuc.ca.gov. Write: Public Advisor's Office, 505 Van Ness Avenue, San Francisco, CA 94102. Call: Toll free 1-866-849-8390; TTY toll free 1-866-836-7825. Please reference California American Water's GRC Application No. 16-07-002 in any communications you have with the CPUC regarding this matter. All public comments will become part of the public correspondence file for this proceeding and be made available for review by the assigned Judge, the Commissioners, and appropriate CPUC staff. *California American Water's 2016 GRC would result in overall revenue increases of $23,903,000 (or 11.18%) for 2018, $9,133,000 (or 3.83%) for 2019, and $7,939,600 (or 3.21%) for 2020. The last time California American Water noticed its proposed revenue requirement increases was during its 100 day update in October 2016. The increases at that time were $31,567,200 (or 14.77%) for 2018, $8,709,200 (or 3.54%) for 2019, and $8,043,000 (or 3.16%) for 2020.

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Public & Legal Notices