Conclusion of Law

The Commission should initiate a new general policy Order Instituting Rulemaking to consider the development of policies and guidelines such as some variation of a "High-Cost" fund or through consolidating districts or rates within the multi-district water utilities, as a means to implement the Commission's Water Action Plan's objective of setting rates that balance investment, conservation, and affordability.

Therefore, IT IS ORDERED that:

1. A Rulemaking is instituted on the Commission's own motion into policies and mechanisms for the consolidation of multi-district water utilities' districts and revenue requirements and uniformity of rates or some variation of a "High-Cost" fund. The Commission will consider these mechanisms on a general policy basis and will not consider the application of the mechanisms or policies to a specific multi-district utility in this proceeding.

2. California-American Water Company, California Water Service Company, Del Oro Water Company, Inc., Golden State Water Company, and San Gabriel Valley Water Company are named respondents to this Rulemaking.

3. The Division of Ratepayer Advocates is also a named respondent to this Rulemaking.

4. Entities on the service list of Applications 11-05-001, 11-05-003, 11-05-004, 10-07-019, and other interested persons are invited to participate in this Rulemaking.

5. Named respondents are required, and all other persons are invited, to file initial comments and reply comments to the specific questions in this Order Instituting Rulemaking.

6. The outcome of this Rulemaking and establishment of any policies and guidelines for some variation of a "High-Cost" fund and consolidation of some or all districts, revenue requirements, and rates within the multi-district water utilities shall be applicable to all multi-district investor-owned water utilities listed in Ordering Paragraph 2.

7. The Executive Director shall cause copies of this order to be served on:
(a) named respondents California-American Water Company, California Water Service Company, Del Oro Water Company, Inc, Golden State Water Company, San Gabriel Water Company, and the Division of Ratepayer Advocates, and
(b) the service list of Applications 11-05-001, 11-05-003, 11-05-004, and 10-07-019.

8. The Executive Director shall also cause copies of this order to be served on Park Water Company, Apple Valley Water Company and San Jose Water Company.

9. Del Oro Water Company shall within 15 days after the issuance of this Order Institute Rulemaking serve a copy of this Order Instituting Rulemaking on all parties that have commented on its advice letters since January 1, 2009. Within 20 days after the issuance of this Order Instituting Rulemaking, Del Oro Water Company shall file a certificate of service in this proceeding.

10. Within 20 days of the publication of this Order Instituting Rulemaking, each named respondent must inform the Commission's Process Office of the contact information for a single representative to be named in the respondent's listing in the Party category of the official service list.

11. The category of this Rulemaking is preliminarily determined to be ratesetting, as that term is defined in the Commission's Rules of Practice and Procedure, Rule 1.3(e).

12. This proceeding is preliminarily determined not to require evidentiary hearings.

13. The preliminary scope and schedule for this proceeding are as set forth in Sections 5 and 7 of this Order Instituting Rulemaking. The assigned Commissioner, by ruling on the scoping memo and other rulings, and the assigned Administrative Law Judge, by ruling with the assigned Commissioner's concurrence to the extent allowed by the Commission's Rules of Practice and Procedure, may modify the scope and schedule as necessary during the course of the proceeding.

14. Initial comments and reply comments shall conform to the requirements of the Commission's Rules of Practice and Procedure. Opening comments must be filed on or before December 15, 2011 and reply comments on or before January 17, 2012, unless the assigned Commissioner or assigned Administrative Law Judge establishes other dates by ruling.

15. Any persons objecting to the preliminary categorization of this Rulemaking as "ratesetting" or to the preliminary determination that evidentiary hearings are not necessary, issues to be considered, or schedule shall state their objections in their initial comments of this Order Instituting Rulemaking.

16. The assigned Administrative Law Judge, in consultation with the assigned Commissioner, shall determine whether to hold a workshop after reviewing the filed initial comments and reply comments to this Order Instituting Rulemaking. Any workshop notice will be issued at least 10 days prior to the date of the workshop.

17. After initial service of this order, a new service list for the proceeding shall be established following procedures set forth in this order. The Commission's Process Office will publish the official service list on the Commission's website (www.cpuc.ca.gov) as soon as practical. Parties may also obtain the service list by contacting the Process Office at (415) 703-2021. The assigned Commissioner, and the assigned Administrative Law Judge acting with the assigned Commissioner's concurrence, shall have ongoing oversight of the service list and may institute changes to the list or the procedures governing it as necessary.

18. Any party that expects to claim intervenor compensation for its participation in this Rulemaking shall file its notice of intent to claim intervenor compensation in accordance with Rule 17.1 of the Commission's Rules of Practice and Procedure, within 30 days of the mailing of this Order Instituting Rulemaking.

This order is effective today.

Dated November 10, 2011 at San Francisco, California.

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