3. Procedural Background

Golden State Water Company (Golden State) filed Application (A.) 08-07-010 on July 1, 2008, requesting authority to increase its revenue requirement in Region II by $20,327,339 (20.12%) in 2010, $2,646,748 (2.18%) in 2011, and $4,189,596 (3.37%) in 2012, and in Region III by $30,035,914 (32.67%) in 2010, $1,714,524 (1.39%) in 2011, and $3,664,223 (2.92%) in 2012.

On August 21, 2008, the Commission issued Decision (D.) 08-08-031¹ granting a limited rehearing of A.07-01-014 on the La Serena plant improvement project costs in Golden State's Region I general rate case (GRC). A prehearing conference in A.08-07-010 and A.07-01-014 was noticed and held on September 23, 2008, to create a service list, discuss consolidating A.08-07-010 and A.07-01-014, the proceeding schedule, and any other procedural matters as necessary. The assigned Commissioner and Administrative law Judge (ALJ) issued a scoping memo and ruling on October 21, 2008, consolidating A.07-01-014 (the La Serena rehearing issue) with A.08-07-010, setting forth the scope and schedule of the proceeding and other matters necessary to move the proceeding forward.

Public participation hearings were noticed and held on January 26-29, 2009, in Gardena, Barstow, Wrightwood, and Culver City. Public participation hearings were also held on February 4-5, 2009, in Placentia and Claremont. All but the Culver City public participation hearings were well attended with a robust and at times raucous discussion of the issues. Many speakers referred to higher water bills even after replacing landscaping with rock, concrete or some other form of hardscape to reduce water use. Speakers also referred to the high fixed meter service charge as an impediment to lowering their monthly bills. Issues of particular concern to the speakers were the level of the rate increases sought, the impact of the proposed conservation rate design on high use areas, regionalized rates, and the level of Golden State's executive compensation.

The level of rate increases sought and executive compensation were particularly troublesome to the speakers given the current economic crisis and its personal impact on many of Golden State's customers. One sentiment expressed over and over again was that citizens of the state and nation are being forced to tighten their belts and Golden State should do so as well. The Commission is mindful of ratepayers' concerns voiced at the public participation hearings and our review of Golden State's applications is undertaken within the broader context of the current economic situation.

Evidentiary hearings were held May 11-15, and 18, 2009. Opening and reply briefs were filed on June 6, 2009, and July 14, 2009, respectively. The proceeding was initially submitted on July 14, 2009. The ALJ's proposed decision was issued on November 17, 2009. A Golden State contract to provide non-regulated service to the City of Torrance was due to expire on January 1, 2010, but Golden State informed the ALJ that the contract had been extended. The Division of Ratepayer Advocates (DRA) informed the ALJ that it had made certain concessions in its negotiations with Golden State on the basis that all contracts for non-regulated services would be allowed to expire. The ALJ's proposed decision was withdrawn from the December 15, 2009, agenda.

On January 29, 2010, an assigned Commissioner and ALJ ruling amended the scoping memo and reopened the record for the limited purpose of receiving supplemental testimony on Golden State's contract with the City of Torrance and certain other highly contested issues. Supplemental opening testimony was due from Golden State on February 12, 2010, and from DRA on March 12, 2010. Rebuttal testimony was due on April 2, 2010. Evidentiary hearings were scheduled for April 7-9, 2010, but after a prehearing conference on April 1, 2010, the parties agreed to forego evidentiary hearings and submit the case on briefs.

Supplemental opening briefs were due on April 29, 2010. Golden State timely requested oral arguments in its opening brief. Supplemental reply briefs were due on May 13, 2010. Oral arguments were held on August 16, 2010, and the case was submitted at the close of oral arguments.

On September 28, 2010, Golden State and DRA filed a joint motion to correct the settlement agreement and to admit exhibits into the evidentiary record. A joint ruling issued on October 5, 2010 reopened the record in this proceeding to receive the corrections to the settlement into the record and to provide an opportunity to comment on the corrected settlement.

The parties to this proceeding are Golden State; DRA; the Cities of San Dimas, Claremont, Placentia, and the town of Apple Valley (Cities) that are jointly represented; and the City of Cypress (Cypress).

¹ D.08-08-031 modified D.08-01-043.