COM/JB2/eap Mailed 12/18/2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Consider Revisions to the General Rate Case Plan for Class A Water Companies.

FILED PUBLIC UTILITIES COMMISSION DECEMBER 14, 2006 SAN FRANCISCO, CALIFORNIA RULEMAKING 06-12-016

OPINION

1. Introduction

In Decision (D.) 04-06-018, we revised the Rate Case Plan governing Class A Water Utilities. All Class A utilities subject to the Rate Case Plan have now filed a general rate case for at least one of their districts under the Rate Case Plan. Since the Rate Case Plan was adopted, another of our decisions, D.06-06-037, directed that the Commission consider in a rulemaking the process by which utilities seek waivers of Rate Case Plan requirements pursuant to Pub. Util. Code § 455.2.¹ The Commission also adopted a Water Action Plan whose four key principles are: (1) safe, high quality water; (2) highly reliable water supplies; (3) efficient use of water; and (4) reasonable rates and viable utilities.²

In July 2006, the Water Division solicited input on how the Rate Case Plan might be modified to support implementation of the Water Action Plan, to address the waiver process anticipated byD.06-06-037, and to modify the Rate Case Plan to reflect lessons learned over the course of the last 2.5 years of implementing the existing Rate Case Plan.

¹ All section references are to the Public Utilities Code unless otherwise specified.

² The Water Action Plan also includes these six objectives: (1) maintain the highest standards of water quality; (2) strengthen water conservation programs to a level comparable to those of energy utilities; (3) promote water infrastructure investment; (4) assist low income ratepayers; (5) streamline CPUC regulatory decisionmaking; and (6) set rates that balance investment, conservation, and affordability.