4. Burden of Proof

Cal-Am bears the burden of proving by a preponderance of the evidence that the proposed rates are just and reasonable. We will review Cal-Am's presentation in the context of the increasingly severe water supply limitations in Cal-Am's Monterey district and the significant financial burdens imposed on residential and business customers by the substantial rate increases sought by Cal-Am in these consolidated applications. This context requires that proposed expenditures be demonstrably necessary for reliable service and provide value to customers. We understand that the cost of providing an efficient and safe water supply is rapidly increasing and we will, where necessary, approve substantial increase in expenditures, but we intend to carefully scrutinize Cal-Am's justifications for such proposals.