audit. Applicant does not take issue with this adjustment. The $0.8 million reduction is the net effect of reclassifying some WRAM revenues to the Leak Adjustment Memorandum Account, excluding some WRAM surcharge revenues that had inadvertently been booked to billed revenues, and a small adjustment to MCBA. The PwC audit is reasonable, and we adopt this adjustment. PWN/RL Adjustments PWN/RL conducted its own study and finds only five million dollars of the $40.6 million is reasonably recoverable. PNW/RL calls its study an audit, and says it is based on the use of three methods: Method 1: Crosscheck data in 20102014 reports submitted to the Commission against recorded results provided by CalAm in data responses to PNW/RL. Method 2: Use of CalAm’s cost of service and rate base reports to calculate the extra money needed (or the excess money collected) to reach applicant’s authorized 8.41 percent rate of return over 2010 to 2014. Method 3: Compare CalAm’s authorized revenues to its annual reports for 20102014 adjusting for already collected surcharges. We are not persuaded. Key PNW/RL exhibits included incomplete data, used results that were not attributed to the right year, and applied revenues unrelated to WRAM. (RT Vol. 5 (May 13, 2016) at 771773.) We are neither convinced that the conducted by PWN/RL was accurately and properly “audit” performed, nor that it was conducted with proper due diligence. PNW/RL assert that the WRAM/MCBA calculation itself: flawed via items that are left out, such as fixed cost reductions, …is accounting methodology for cost recognition, posttax vs. the pretax value of costs, the value of transactions between the Monterey
audit. Applicant does not take issue with this adjustment. The $0.8 million reduction is the net effect of reclassifying some WRAM revenues to the Leak Adjustment Memorandum Account, excluding some WRAM surcharge revenues that had inadvertently been booked to billed revenues, and a small adjustment to MCBA. The PwC audit is reasonable, and we adopt this adjustment. PWN/RL Adjustments PWN/RL conducted its own study and finds only five million dollars of the $40.6 million is reasonably recoverable. PNW/RL calls its study an audit, and says it is based on the use of three methods: Method 1: Crosscheck data in 20102014 reports submitted to the Commission against recorded results provided by CalAm in data responses to PNW/RL. Method 2: Use of CalAm’s cost of service and rate base reports to calculate the extra money needed (or the excess money collected) to reach applicant’s authorized 8.41 percent rate of return over 2010 to 2014. Method 3: Compare CalAm’s authorized revenues to its annual reports for 20102014 adjusting for already collected surcharges. We are not persuaded. Key PNW/RL exhibits included incomplete data, used results that were not attributed to the right year, and applied revenues unrelated to WRAM. (RT Vol. 5 (May 13, 2016) at 771773.) We are neither convinced that the “audit” conducted by PWN/RL was accurately and properly performed, nor that it was conducted with proper due diligence. PNW/RL assert that the WRAM/MCBA calculation itself: …is flawed via items that are left out, such as fixed cost reductions, accounting methodology for cost recognition, posttax vs. the pretax value of costs, the value of transactions between the Monterey
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