Report 2014-132 Recommendation 4 Responses

Report 2014-132: Apple Valley Area Water Rates: Differences in Costs Affect Water Utilities' Rates, and One Utility May Have Spent Millions of Ratepayer Funds Inappropriately (Release Date: April 2015)

Recommendation #4 To: Golden State Water Company

To demonstrate to water customers how they are working to keep rates reasonable, the four water utilities should document their cost-saving efforts and quantify, to the extent possible, any specific cost savings achieved from their respective efforts.

Annual Follow-Up Agency Response From October 2018

As a result of the California Public Utility Commission's final decision on Golden State Water Company's (GSWC) General Rate Case Application to set rates for the years 2016, 2017, and 2018, GSWC has fully implemented the recommendation from audit report 2014-132.

A copy of the CPUC's final decision is available on the CPUC's website ( The decision number is D.16-12-067.

  • Completion Date: March 2017

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

GSWC's rate case included documented cost savings efforts. Now that the plan has been approved by the CPUC, GSWC should be able to implement those cost saving efforts.

1-Year Agency Response

We are awaiting a final decision from the California Public Utilities Commission that will establish rates for the three year window: 2016, 2017, and 2018.

Undeer the terms of the settlement in that proceeding, GSWC has reduced its annual O&M costs $7 million. These costs reductions were widespread within the organization. The largest individual reduction was in annual depreciation expense which was achieved by updating our depreciation study.

  • Estimated Completion Date: 3rd quarter 2016
  • Response Date: May 2016

California State Auditor's Assessment of 1-Year Status: Pending

Golden State Water Company indicates its status as not fully implemented as its rate case, which establishes rates, is still pending final approval.

6-Month Agency Response

The recommendation is document cost savings and quantify if possible.

Golden State views this recommendation as an on-going task, not necessarily one that has a finish line

  • Estimated Completion Date: on-going
  • Response Date: December 2015

California State Auditor's Assessment of 6-Month Status: Pending

We look forward to Golden State providing some examples of its efforts to document its cost savings in its one-year response.

60-Day Agency Response

Golden State will collect data as recommended data for its next appropriate rate filing.

  • Estimated Completion Date: ongoing
  • Response Date: July 2015

California State Auditor's Assessment of 60-Day Status: Pending

Golden State has indicated that it is in the process of documenting and quantifying cost saving measures in anticipation of filing its next general rate case in March 2016.

All Recommendations in 2014-132

Agency responses received are posted verbatim.