2. Background

In January 2004, SCWC tendered its Notice of Intent (NOI) to file a general rate case (GRC) for test years 2005 and 2006 and attrition year 2007 for each of the CSAs in its Region I. While the NOI was pending, the Commission issued Rulemaking (R.) 03-09-005¹ that deferred the filing of the Region I GRC from January 2004 to a later date to be determined. The NOI was therefore not accepted for filing. As part of the rulemaking, the Commission issued D.04-06-018, which adopted a rate case plan that requires each Class A water utility to submit its GRC applications according to a specified schedule. That schedule deferred the next GRC filing for SCWC's Region I from January 2004 to January 2007 (for test year 2008). To lessen any hardship caused by such a deferral, the Commission ordered ORA to work with SCWC to devise and implement a mutually agreeable rate adjustment plan to transition Region I to the new rate case plan schedule. SCWC and ORA agreed to and issued such a plan, dated August 19, 2004, whereby existing rates for each of the Region I CSAs would be increased in 2005, 2006 and 2007.

On August 31, 2004, SCWC filed its application to implement the SCWC/ORA plan. No protests were received. However, a prehearing conference (PHC) was held on November 16, 2004, to discuss how supplemental evidence could be provided to clarify and support the requested rate increases. SCWC submitted supplemental testimony on December 14, 2004, and evidentiary hearing was held on January 11, 2005. Additional information on the allocation of general office expenses was provided by SCWC on February 8, 2005, as Exhibit 12. Clarifications to Exhibit 12 were received on February 22, 2005, at which time this matter was submitted for decision.

Public participation hearings were held in the afternoons and evenings of January 19, 2005, in Santa Maria, and January 25, 2005, in Rancho Cordova, and the evening of January 26, 2005, in Pittsburg. There were 4 speakers in Santa Maria, one speaker in Rancho Cordova and seven speakers in Pittsburg. Besides addressing the amounts and effects of the rate increases, speakers in Santa Maria and Pittsburg discussed and questioned the need for, timing of and ratepayer impacts of various proposed and ongoing projects in their service areas. Water quality concerns were expressed as well. In Santa Maria, the Orcutt Area Advisory Group was represented; in Rancho Cordova, the general manager of the Gold River Community association spoke; and, in Pittsburg there were speakers associated with the Bay Point Municipal Advisory Council. SCWC appeared willing and is encouraged to engage in dialogue with such groups as needed to keep communities informed on important issues.