II. General Rate Case Structure and Process

A. Filing Schedule

Under the RCP, each Class A water utility is scheduled to file a GRC once every three years, with certain exceptions, as specified herein. During the transition to this RCP, Section VI may, in some instances, schedule a GRC application for a particular utility before or beyond the three years. In those instances, the water utility is permitted to act consistent with Section II. B and II. C, below.

The RCP processing period for utilities will be either 14 months or
20 months, beginning with the submission date of the proposed application and ending with the expected effective date of final rates. The 14-month or 20-month processing period will apply as set forth below.

The deadline for the utility to submit its proposed application is either November 1 or May 1 with the requisite application being filed on the following January 1 and July 1, respectively, as provided below. All references to the first day of the month for the filing deadlines herein means the first Commission business day of the month.

B. Procedure to Address Delay Beyond the Three-Year GRC Cycle

A water utility that experiences a delay beyond three-years in filing a GRC application due to the transition to the RCP schedule may seek to implement an interim rate change via an advice letter.

Such filing will not excuse a utility from filing its future GRCs according to the RCP schedule. These interim rates, when approved, will be subject to refund and shall be adjusted upward or downward back to the effective date of the interim rates with the adoption of final rates by the Commission at the conclusion of a GRC scheduled under the RCP.

The procedures herein will only apply during our transition to the RCP in instances when this RCP schedule delays a GRC for any water utility beyond the three-year cycle set forth in Section 455.2.

C. Procedure to Forego a Scheduled GRC

In any GRC under this RCP, the utility may choose to forgo review of rates for a district when the adopted rates are for a test year less than three years prior. In these circumstances, the utility does not need to include responses to the Minimum Data Requirements for such district in a proposed application addressing multiple districts. The utility shall advise the Commission of its decision to forego a GRC by letter to the Water Division Director.

D. Cost of Capital Applications

The three largest multi-district Class A water utilities, California American Water Company, California Water Service Company, and Golden State Water Company, are directed to file a cost of capital application on May 1, 2008 and on a triennial basis thereafter.¹¹ The Commission will consolidate these three cases. The utilities shall include in this May 1, 2008 filing a proposal to annually update the authorized capital structure. This mechanism will apply between triennial proceedings. The Commission will adopt such a mechanism in the May 2008 proceeding.

All the remaining Class A water utilities will file a cost of capital application on May 1, 2009 and on a triennial basis thereafter. The Commission will consolidate these cases. The utilities shall include in the May 2009 filing a proposal to annually update the authorized capital structure. This mechanism will apply between triennial proceedings. The Commission will adopt such a mechanism in the May 2009 proceeding.

E. The Record for a GRC Proceeding

Informal communications between applicant, DRA, and other interested parties are encouraged at all stages of the proceedings, including the proposed application review period. Informal communication is encouraged to facilitate a better understanding of the positions of the parties, avoid or resolve discovery disputes, and eliminate unnecessary litigation. However, all information necessary for the Commission to make its decision must be included in the formal record. While the Commission supports alternative forms of dispute resolution for GRC filings, any resulting agreement, and the record on which it is based, must meet all applicable Rules of Practice and Procedure as well as the Commission's standard for settlements. A complete comparison exhibit for each district, with supporting rationale, is essential for any settlement agreement.

F. Water Quality Expert

The Presiding Officer shall appoint a water quality expert to assist the Commission in making specific findings and recommendations concerning a utility's water quality compliance unless good cause exists to forego such appointment. Initially, all GRCs will be referred to a water quality expert soon after the GRC is filed, and the water quality expert will provide a preliminary review of a utility's water quality and address the water quality aspects of GO 103 and other applicable law. We further anticipate that the water quality expert will provide an informal report to the Presiding Officer prior to the PHC. If the Presiding Officer determines that a more extensive report is required, the Presiding Officer will order a report and testimony by the same or a different water quality expert in a ruling with the scoping memo. If a water quality expert submits testimony, the expert will be subject to cross-examination. Parties will be permitted to file responses to this aspect of the scoping memo.

In the future, where the utility has met all sampling and testing requirements, has no test results on facilities in active service that exceed certain maximum contaminant levels (MCLs), and no party raises concerns of merit, then no appointment of a water quality expert may be necessary.

¹¹ For the first cost of capital applications filed under this RCP, the utilities shall serve their applications on the service list to R.06-12-016.