II. Procedural Background

In compliance with the directive in the Rehearing Decision, an ALJ ruling was issued on October 20, 2003. The Ruling solicited comments from parties concerning the resolution of the rehearing issues, as described above. Attached to the ruling was a memorandum from DWR, describing the sequence of events relating to DWR's receipt of various IOU load forecasts that were utilized in its power procurement pursuant to AB1X. Opening comments in response to the ALJ ruling were filed on December 2, 2003, and reply comments were filed on December 16, 2003. Comments were filed by PG&E, SCE, and SDGE, as well as various parties representing MDL interests: California Municipal Utilities Association (CMUA), City of Industry (Industry), Merced Irrigation District (Merced ID), Modesto Irrigation District (Modesto ID), Northern California Power Agency (NCPA), and South San Joaquin Irrigation District (SSJID).

Parties' filed comments in response to the October 20, 2003 form a sufficient basis to resolve the issues identified for rehearing, with the exception of certain factual issues identified by CMUA as described below. In its reply comments in response to the ALJ ruling, CMUA argued that evidentiary hearings may be necessary to address certain "new factual representations" specifically by PG&E and DWR regarding the load forecast that was utilized in procuring DWR power.

By ruling dated August 10, 2004, the ALJ scheduled further evidentiary hearings on the factual issues raised by CMUA. Pursuant to the schedule set by the ALJ, an evidentiary hearing was held on September 8 and 13, 2004. PG&E presented two witnesses, Dennis Keane and Roy Kuga, and DWR presented one witness, Craig McDonald. Active parties conducting cross examination were CMUA, Merced and Modesto Irrigation Districts, and NCPA.

Opening briefs were filed on September 27, 2004, and reply briefs were filed on October 4, 2004. This phase of the proceeding was submitted on October 4, 2004.