Background
The Commission's Rate Case Plan for Class A Water Utilities calls for CalWater to file proposed applications for one-third of its 24 California water districts on May 1 of each year, with formal applications to follow on July 1. This proceeding addresses test year 2006/2007 and escalation years 2007/2008 and 2008/2009 for eight districts: Antelope Valley, Bear Gulch, Dominguez-South Bay, Hermosa-Redondo, Kern River Valley, Marysville, Palos Verdes, and Redwood Valley.1
During preliminary discussions with the Commission's Division of Ratepayer Advocates (DRA) last year, DRA informed CalWater that it did not have the resources to begin processing its rate applications on the expected schedule. Accordingly, CalWater and DRA jointly asked the Commission's Executive Director to grant a delay until June 6, 2005 to file the proposed applications. That authorization was granted, the proposed applications were filed on June 6, and the formal applications were filed on August 8.
Following a prehearing conference, the Assigned Commissioner issued a scoping memo on September 26, 2005 compressing the schedule to allow for a timely Commission decision in June 2006. Over the subsequent months, the assigned Administrative Law Judge (ALJ) made several modifications affecting the schedule at the request of either DRA, CalWater, or both.2 The consolidated proceeding record was submitted for decision on March 9, 2006, and absent additional delays, a proposed decision would likely have been presented to the Commission at its June 29, 2006 meeting.
For reasons discussed in part below, the Commission did not adopt a final decision on these eight consolidated applications by the first day of the first test year, July 1, 2006. On July 6, 2006, CalWater filed its Motion to Set Effective Date for Interim Rates Pursuant to Section 455.2 of the Public Utilities Code. CalWater seeks a Commission order authorizing it to file tariffs effective on the date of the motion increasing rates in all eight general rate case districts by the rate of inflation, or, in the alternative, establishing its present rates as the interim rates. In either case, the interim rates would be subject to retroactive adjustment back to their effective date based on the final adopted rates.
1 Redwood Valley district consists in turn of three separate ratemaking areas: Lucerne, Redwood Valley Unified, and Coast Springs.
2 The ALJ also granted CalWater authority on October 21, 2005 to amend its Kern River Valley district and Redwood Valley district applications (Application 05-08-010 and Application 05-08-013) with the understanding that the proceeding schedule would not thereby be extended.
