3. Background

The Commission issued a preliminary finding in Resolution ALJ 176-3090, issued on June 26, 2002, that the category for this proceeding is ratesetting and determined that the matter did not require hearings. The Office of Ratepayer Advocates (ORA) and John A. Hyland, Jr. (Hyland) each filed a protest with the Commission's Docket Office. Cal-Am filed a reply to the protest of Hyland. The assigned Administrative Law Judge (ALJ) held a prehearing conference (PHC) on July 19, 2002, in San Francisco.

At the PHC, ORA stated that it no longer planned to dispute the proposed rates, despite continued questions about the expected accounting treatment of the purchased assets, but that the County's RFP process had satisfied its concerns with the proposed rates. At the PHC, the ALJ directed Cal-Am to supplement its application to provide additional documentation on its proposed rates, specifically how they are derived and justified.

Pending receipt of the supplement, Commissioner Duque's July 31, 2002, Scoping Ruling preliminarily ruled that hearings were needed and allowed parties to file a request for evidentiary hearings on August 30, 2002, after reviewing Cal-Am's supplemental filing. Hyland timely filed a request for evidentiary hearings. The assigned ALJ directed Hyland to serve prepared testimony addressing his forecast of reasonable operating expenses and capital additions, and the technical basis for such forecasts.

The ALJ held one day of evidentiary hearings. Opening briefs were filed on November 13, 2002. Reply briefs were filed December 3, 2002. The case was submitted for decision on receipt of reply briefs.