II. Background
The Commission opened this proceeding to update the RCP adopted in 1990. The purpose of the RCP is to provide Class A water utilities with (1) rate case application content guidance, (2) a filing schedule for all Class A water utilities, and (3) a Commission review and evaluation timeline. The impetus for this updating process is § 455.2, which states, in part, that the Commission "shall establish a schedule to require every [Class A] water corporation . . . to file an application . . . every three years."2 The current RCP does not provide for a mandatory rate case filing schedule.
The Commission attached a draft revised RCP to its September 4, 2003, order instituting this rulemaking (OIR). That draft contained revised timelines for filing and changes in the content of rate case applications necessary to meet the requirements of § 455.2. The Commission's Water Division held workshops before and after issuance of the OIR, and the parties filed written comments and reply comments on the draft RCP.
On January 27, 2004, the assigned Administrative Law Judge (ALJ) issued her draft decision. The parties held additional workshops,3 filed written comments and reply comments, and presented oral argument before the ALJ and assigned Commissioner.
2 Section 455.2 states: (a) The Commission shall issue its final decision on a general rate case application of a water company with greater than 10,000 service connections in a manner that ensures that the Commission's decision becomes effective on the first day of the first test year in the general rate increase application. (b) If the Commission's decision is not effective in accordance with subdivision (a), the applicant may file a tariff implementing interim rates that may be increased by an amount equal to the rate of inflation as compared to existing rates. The interim rates shall be effective on the first test day of the first test year in the general rate case application. These interim rates shall be subject to refund and shall be adjusted upward or downward back to the interim rate effective date, consistent with the final rates adopted by the Commission. The Commission may authorize a lesser increase in interim rates if the Commission finds the rates to be in the public interest. If the presiding officer in the case determines that the Commission's decision cannot be effective on the first day of the first test year due to actions by the water corporation, the presiding officer or Commission may require a different effective date for the interim rates or final rates. (c) The Commission shall establish a schedule to require every water corporation subject to the rate case plan for water corporations to file an application pursuant to the plan every three years. The plan shall include a provision to allow the filing requirements to be waived upon mutual agreement of the Commission and water corporation. (d) The requirements of subdivisions (a) and (b) may be waived at any time by mutual consent of the Executive Director of the Commission and water corporation." 3 The draft decision required that certain demographic information be included in the GRC application. The parties have agreed that such information shall instead be included in each utility's annual report.
