2. Background
Cal Am is a Class A water company with seven districts.3 Class A water companies are regulated by the Commission pursuant to Article XII of the California Constitution and the Public Utilities Code. Specifically, Pub. Util. Code § 455.2, as implemented in the Rate Case Plan (RCP), provides for a GRC proceeding every three years.4
The Larkfield Water Company was constructed and granted a certificate of public convenience and necessity in 1959. It was merged into Citizen's Utilities in 1995, and then acquired by American Water5 in 2002.6
The Larkfield District provides water service to an unincorporated portion of Sonoma County about four miles north of the City of Santa Rosa, CA. The service area includes the Larkfield and Wikiup subdivisions which lie along the eastern boundary of U.S. Highway 101 and the community of Fulton which is located west of U.S. Highway 101. An interconnected distribution system serves the three areas of the district which provides water to approximately 2,400 customers. The mix of water provided to Larkfield District customers consists of well water and water purchased from the Sonoma County Water Agency.
In 1928, the North Sacramento Light and Water Company was purchased by the Public Utilities California Corporation. The name was changed to Citizen's Utilities Company of California (Citizens) in 1949. Over the years, through a series of mergers and acquisitions Citizens grew to encompass the ten distinct water systems that now comprise the Sacramento District. In January 2002, American Water acquired Citizens Utilities Company. The Sacramento District provides water service to areas north, east, and south of the City of Sacramento. It also includes an area west of the City of Roseville in Placer County and the smaller communities of Isleton and Walnut Grove located southwest of the City of Sacramento. The ten water systems are now operated as one. The systems are Antelope, Arden, Isleton, Lincoln Oaks, Parkway, Rosemont, Security, Suburban, Walnut Grove, and West Placer. The Sacramento District serves approximately 59,000 customers.
On January 22, 2007, Cal Am filed applications for rate changes for its Coronado, Larkfield, Sacramento, and Village districts. DRA filed a timely protest on February 21, 2007, and a prehearing conference (PHC) was held on March 23, 2007 in San Francisco. The Mark West Area Community Services Committee (Mark West) filed a Motion to Intervene on March 12, 2007. At the PHC, Mark West's Motion to Intervene was granted and the proceedings were consolidated without objection. Both DRA and Mark West objected to including the consolidation of the Larkfield and Sacramento districts in the scope of the proceeding.
The assigned Commissioner's and Administrative Law Judge's Scoping Memo was issued on April 11, 2007, and included the proposed consolidation of Larkfield and Sacramento. The ruling found that allowing the parties to address the issue is in the public interest and, as such, consolidation is included in the scope of this proceeding.
The Commission held four Public Participation Hearings (PPHs), one each in Thousand Oaks (Village District) and Larkfield, and two in Sacramento, on April 12, 17, and 18, 2007, respectively.7 After the Scoping Memo was issued, DRA filed a Motion to bifurcate the proceeding into two phases and move the Conservation Rate Design, Purchased Water Balancing Account and Water Rate Adjustment Mechanism (WRAM) requests into the second phase of the proceeding. DRA sought the bifurcation because it believed it would be unable to submit its testimony in a timely fashion due to limited staff resources. There was no opposition to the motion. DRA had previously raised the issue at the PHC, but the ALJ declined to move the issues into another phase at such an early date. On May 5, 2007, an ALJ Ruling granted DRA's motion and adopted its proposed new schedule.
On April 13, 2007, Cal Am served Supplemental Testimony of Rodney Jordan and removed the Sutter Well and Well Number 6 from the Larkfield District application. Direct testimony was served by DRA and Mark West on May 2, 2007. Cal Am served its rebuttal testimony on May 21, 2007. Evidentiary hearings were held June 4-6, 2007, with Opening and Reply Briefs filed on June 28, 2007, and July 3, 2007, respectively.
DRA and Cal Am filed a Settlement Agreement on July 6, 2007. On July 20, 2007, Mark West filed Comments on the Settlement Agreement. On August 20, 2007, both DRA and Cal Am filed Replies to Mark West's Comments on the Settlement Agreement.
On October 2, 2007, Cal Am filed a motion to reopen the record to accept late-filed exhibits which corrected errors in the comparison tables attached to the Settlement Agreement. On November 2, 2007, Cal Am filed a motion for interim rate relief. An ALJ ruling issued on November 20, 2007, granted both motions.
3 Class A water companies are privately held water companies with over 10,000 service connections. Cal Am's seven districts are Coronado, Felton, Larkfield, Los Angeles, Monterey, Sacramento, and Village.
4 The original RCP was adopted in D.04-06-018. On May 24, 2007, the Commission issued D.07-05-062, revising the original RCP.
5 American Water is the parent company of Cal Am.
6 The transaction was authorized by the Commission in D.01-09-057.
7 There were two PPHs in Sacramento, one in the afternoon and one in the evening.
