Saturday, March 23, 2013

California-American Water Company’s Monterey Peninsula Water Supply Project, California Public Utilities Commission Proceeding A.12-04-019: REBUTTAL TESTIMONY OF JEFFREY LINAM

ABSTRACT:  Rebuttal Testimony by Jeffrey Linam, Director of Finance for California American Water, dated March 8, 2013, is featured.  Mr.  Linam provided previous direct testimony on April 23, 2012, supplemental testimony on January 11, 2013 and errata to supplemental testimony on February 15, 2013. Rebuttal Testimony coveres  (1) provide a summary of the financial and rates witnesses for California American Water, (2) discuss the public financing proposals set forth by the Monterey Peninsula Water Management District ("MPWMD") and MPWMD's comments on the financing model, (3) evaluate MPWMD's financing proposals within the context of the Monterey Peninsula Regional Water Authority's (MPRWA) adopted principles for a contribution of public funds, as articulated in the testimony of Mr. Jason Burnett, (4) address the financial recommendations made by the Division of Ratepayer Advocates ("DRA"), and (5) clarify other related issues.  Importantly, a summary of the key conditions in response to the order of MPRWA's principles:
1)  MPRWA Principle #1 — The public contribution lowers costs to ratepayers,
2)  MPRWA Principle #2 — The public contribution does not adversely affect other (non-Monterey area) Cal-Am ratepayers,
3)  MPRWA Principle #3 — The public contribution need not require a Cal-Am specific credit rating,
4)  MPRWA Principle #4 — The public contribution should not change Cal-Am's authorized debt-to-equity ratio,
5) MPRWA Principle #5 — The public contribution should not change Cal-Am's authorized equity rate of return,
6)  MPRWA Principle #6 — Cal-Am should be abrorded the opportunity to invest some equity to garner its authorized rate of return to account for risk Cal-Am is taking,
7)  MPWRA Principle #7 — The public contribution cannot cause a material delay to the project.
REBUTTAL TESTIMONY OF JEFFREY LINAM (March 8, 2013), SUPPLEMENTAL TESTIMONY OF JEFFREY T. LINAM ERRATA (Revised Served:  February 15, 2013), SUPPLEMENTAL TESTIMONY OF JEFFREY T. LINAM (January 11, 2013) and DIRECT TESTIMONY OF JEFFREY T. LINAM (April 23, 2012) documents are embedded. 
Note: Robert Larkins, on behalf of MPWMD, offers several public agency financing proposals. Specifically, Mr. Larkins recommends: (1) that California American Water engage in tax-exempt securitization borrowing; or (2) that California American Water engage in traditional tax-exempt borrowing through the issuance of tax-exempt Certificates of Participation ("COPs") by MPWMD.
Direct Testimony of Robert Larkins, filed February 22, 2013.

 

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
March 8, 2013

 

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Originally Served: January 11, 2013
Revised Served:  February 15, 2013

 

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Date:  January 11, 2013

 

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
April 23, 2012

ADDENDUM:
MONTEREY PENINSULA WATER SUPPLY PROJECT
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