The preliminary categorization of A.11-03-010 is ratesetting. (Administrative Law Judge (ALJ) Resolution 176-3271 dated March 24, 2001.) In this decision we affirm the preliminary categorization. The ratesetting categorization was confirmed for A.10-08-002 in D.10-12-026. We find that evidentiary hearings are not needed for Phase I of these proceedings to authorize a memorandum account. Phase II will be scoped separately, at which time we will determine whether an evidentiary hearing will be necessary in that phase on cost recovery. Specifically, regarding Southwest, the Commission may choose to resolve the cost recovery issues in Southwest's test year 2014 general rate case rather than Phase II.