Procedural History

California American Water Company (Cal-Am) intervened in this proceeding because it has currently pending A.00-05-015, Citizens and Cal-Am's joint request for Cal-Am to acquire all of Citizens' facilities in California. Upon request in this proceeding, Cal-Am provided estimates of revenue requirement and rate impact should the company be transferred to Cal-Am. These estimated costs to construct projects in the 2000 Master Plan are slightly lower than those of Citizens. If the pending acquisition is approved, Cal-Am will be obligated to perform any improvements authorized in this proceeding, standing in the shoes of Citizens.

The Commission Office of Ratepayer Advocates (ORA) protested the Master Plan application, recommending reprioritizing pipeline replacement, and deferring two wells and one proposed storage tank. ORA's revisions result in roughly half of the rate increase that Citizens proposes.

The Montara Sewer District (MSD) also protested the 2000 Plan. MSD is a public agency providing sanitary service to the unincorporated communities of Moss Beach and Montara and surrounding communities. In 1992 voters agreed to give the sanitary district the additional powers of a county water district that may do any act necessary to furnish sufficient water for present or future use, including storage and conservation of water, or to appropriate, acquire, and conserve water and water rights for any useful purpose. MSD recommended further revisions to the Master Plan and that the Commission consider in the future consolidating the Montara District with other Citizens or Cal-Am districts to minimize the rate impact on Montara customers of needed improvements.

In addition, Montara customers were individually notified of this proceeding and invited to provide their opinions on the proposed Master Plan.

Two informal public meetings were held by Citizens and ORA on March 21 and April 4, 2001 in the Montara District to gather customer input. A Public Participation Hearing (PPH) was held in Montara on April 26, 2001. Roughly 100 customers attended the PPH with 30 customers presenting statements. In summary, few customers recommended approval of Citizen's proposed Master Plan. Customers believe the proposed increases for improvements are excessive and that some improvements are unnecessary. Many customers indicated they have low or fixed incomes and cannot afford any increases. Several customers asked the Commission to defer a decision in this proceeding so that the community may organize to acquire Citizens' facilities by eminent domain. After the PPH, customers sent roughly 75 letters and e-mails to the Commission voicing the same opinions as customer statements at the PPH.

On January 19, 2001, Assigned Commissioner Duque issued a Scoping Memo and Ruling in this proceeding. The preliminary category as "ratesetting" with the need for a hearing was retained. The assigned Administrative Law Judge is the designated principal hearing officer in this proceeding.

Evidentiary hearings were held on May 14-16, 2001 in San Francisco. Concurrent Opening and Closing Briefs were submitted on June 4 and 18, 2001,

respectively. Oral Argument before the Commission was held on

, 2001.