2. Procedural Background
Cal Am is a Class A water company with seven districts.1 The Commission regulates water service provided by Cal Am in its seven California districts pursuant to Article XII of the California Constitution, the Public Utilities Code, and the Commission's rules and regulations. For Cal Am and other Class A water utilities, Public Utilities Code Section 455.2, as implemented in Decision (D.) 07-05-062, the Rate Case Plan (RCP), provides for a general rate case (GRC) proceeding every three years.
The Coronado district was established in 1886 for the purpose of supplying water to the residents of the area known today as the City of Coronado. American Water Works Company, Inc. (American Water) acquired the company in 1966. Cal Am is a wholly owned subsidiary of American Water.2 The Coronado district serves the Cities of Coronado and Imperial Beach, a portion of the City of San Diego lying south of San Diego Bay and a small area of South Chula Vista located in the County of San Diego. All of the water provided to the Coronado district's approximately 21,000 customers is purchased from the City of San Diego.
The Village Water Company was established to serve land developers in the Conejo Valley. It was acquired by Cal Am in 1967. Between 1970 and 2006 the number of customers in the Village district grew from approximately 7,200 to slightly less than 21,000 with the completion of several new developments in the area. With the increase in customers, the amount and quality of water the district was able to supply to its customers from local wells became inadequate. In 1974 the use of local well water was discontinued. Since then all water provided by the Village district has been purchased from the State Water Project.
The Larkfield Water Company was constructed and granted a certificate of public convenience and necessity in 1969. It was merged into Citizen's Utilities in 1995, and acquired by American Water in 2002. The Larkfield district provides water service to an unincorporated portion of Sonoma County about four miles north 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 and 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.
On January 22, 2007, Cal Am filed applications for rate increases and/or decreases 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 was granted and the proceedings were consolidated without objection.
The assigned Commissioner's and Administrative Law Judge's (ALJ) Scoping Memo was issued on April 11, 2007. On April 13, 2007, DRA filed a motion to bifurcate the proceeding into two phases, a revenue requirement phase (Phase I) and move the conservation rate design, Modified Cost Balancing Account (MCBA) and Water Rate Adjustment Mechanism (WRAM) requests into a second phase (Phase II) of the proceeding. There was no opposition to the motion. On May 1, 2007, an ALJ Ruling granted DRA's motion to bifurcate the proceeding and adopted its proposed new schedule, which indicated a decision in Phase II would be issued in early March 2008.
Subsequent to the May 5, 2007 ALJ Ruling, parties teleconferenced with the ALJ seeking a delay in the start of the Phase II proceeding. Parties believed ongoing settlement negotiations in the Cal Am Los Angeles district GRC would aid in reaching settlement on the Phase II issues in this proceeding. The ALJ agreed to the delay.
By June 9, 2008, with no settlement filed by the parties in the proceeding, an Amended Scoping Memo and Ruling was issued establishing a new procedural schedule for Phase II and removing consideration of the Sacramento district rate design from this proceeding.3
1 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.
2 The Coronado and Village districts were both acquired by American Water, but for operating purposes they are part of Cal Am, a wholly owned subsidiary of American Water.
3 The rate design for Cal Am's Sacramento district will be considered in its next GRC which is scheduled for November 2008.
