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Advice Letter 508

  • Lost Revenue Memorandum Account - CAMP Fire
  • Lost Revenue Memorandum Account - CAMP Fire
  • Effective: November 9, 2018
  • Effective: November 9, 2018
  • Posted: January 25, 2019
  • Posted: January 25, 2019
  • Last update: 25 January 2019
Del Oro Water Company, Inc. (DOWC) requests to establish a Lost Revenue Memorandum Account (LRMADS):
1. PURPOSE:  Following Governor Brown’s November 8, 2018 proclamation of a State of Emergency for Butte County, the LRMADS is being set up to track the lost revenues associated with the November 2018 CAMP Fire in the above referenced Districts wherein they suffered the loss of over 2,200 residences and businesses. 
2. APPLICABILITY:  The LRMADS will record the tracking of lost revenues associated with the CAMP Fire of November, 2018 and cost savings associated with lower sales (lower spending on purchased water, purchased power, and pump taxes) as well as proceeds from insurance and other agency funds recovered for the specific purpose of offsetting lost revenue.
DOWC shall maintain the LRMADS by making entries at the end of each month as follows:
a. A debit entry shall be made to the LRMADS at the end of each month to record each District’s lost revenue for the period in question.
b. A credit entry shall be made to the LRMADS at the end of each month to record cost savings associated with lowered sales; proceeds from insurance companies received specifically for lost revenue and/or any other agency which may provide revenue for same, to be netted with lost revenues when DOWC amortizes them.
c. Interest shall accrue to the LRMADS on a monthly basis by applying a rate equal to one-twelfth of the 3-month non-financial Commercial Paper Rate, as reported in the Federal Reserve Statistical Release, to the average of the beginning-of-month and the end-of-month balances.
3. EFFECTIVE DATE:  The LRMADS shall go into effect on November 9, 2018.
4. DISPOSITION:  Disposition of amounts recorded in the LRMADS will be determined in a regulatory proceeding, as authorized by the Commission.  DOWC will terminate this memorandum account when all implementation costs have been incurred and recorded.
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