V. RCP Deviations and Waivers

This section describes possible deviations from the RCP schedule and the procedure by which a utility may seek a deviation or waiver from the RCP schedule or other certain requirements.

A. Waiver of Scheduled GRC Filing

The utility may seek waiver of a GRC application scheduled under the RCP by letter to the Executive Director. Such letter shall be sent to the Executive Director no later than 90 days prior to the scheduled application filing date with a copy to the Chief ALJ, Water Division Director, DRA Director, and the service list of its most recent GRC. The scheduled GRC filing will be waived upon mutual agreement of the Commission (through the Executive Director in consultation with the Water Division) and the water utility. The Executive Director will report to the Commission at the next scheduled Commission meeting the disposition of any requests for waiver of the three-year filing requirement.

B. Authority to file GRC by Advice Letter in Lieu of Application

The utility may file an advice letter in lieu of an application if all of the following circumstances are met:

1. the utility tenders its proposed application;

2. the proposed application is found to be complete;

3. the proposed application consists of a single ratemaking district; and

4. the requested change in revenue requirement is 5% or less.

If the utility meets these criteria, it may, on its specified application filing date under the RCP, file its GRC by advice letter rather than by application, but it must continue to comply with the RCP Minimum Data Requirements in its advice letter filing. The utility shall notify the Commission's Executive Director by letter with a copy to the Chief ALJ, Water Division Director, DRA Director, and Docket Office no later than five days before the application due date whether it will file an application or advice letter. The GRC advice letter will be processed as a Tier 3 advice letter.

C. Filing a GRC by Advice Letter in Lieu of Application with Prior Approval

If subsection b (1)-(4), above, are not satisfied, the filing of an advice letter in lieu of an application is permitted only if prior Commission approval is obtained. The utility shall file an advice letter seeking authority to file its GRC by advice letter no later than 90 days prior to the due date for its application for GRC. The utility must continue to prepare its proposed application consistent with the RCP and Minimum Data Requirements while its advice letter seeking approval for the waiver is pending. The advice letter will be processed as a Tier 3 advice letter. If the Resolution denies the request, the utility shall file its GRC application as specified in the RCP. If the Commission grants the utility's request, the GRC advice letter will be processed as a Tier 3 and the filing requirements set forth in subsection B shall apply.

D. Interim Rates while a GRC is Pending

This interim rate process only applies during a pending GRC when the applicant, another party, or the Presiding Officer anticipates that the Commission's decision will not be effective on the first day of the first test year in a general rate increase application. This procedure is adopted pursuant to Section 455.2(a) and (b).

Should an applicant seek interim rate relief, the applicant must file a motion for interim rate relief on or before the date for filing its opening brief, unless a different date is designated by the Presiding Officer. During this time, any other party may also file a motion for interim rate relief. Responses to this motion will be permitted, consistent with the Rules. The motion shall address the degree, if any, that applicant was responsible for delay during the proceeding, the requested rate modification (not to exceed the rate of inflation), and a proposed effective date for interim relief. The motion shall also request the establishment of a memorandum account to track the difference between the interim rates and the final rates.

In response to this motion, the Presiding Officer will issue a ruling. The ruling will determine whether the applicant was responsible for the delay in implementing rates, determine if the requested rates are appropriate for submitting to the Commission via advice letter, and set a specific effective date for interim rates. The ruling will also direct applicant to request the establishment of a memorandum account with the advice letter filing that implements interim rates.

After a ruling is issued on the motion for interim rate relief, the applicant must file an advice letter consistent with the ruling. The applicant's advice letter filing will be effective according to the findings of the ruling. Under our adopted procedure and consistent with Section 455.2, the applicant's "interim rates shall be effective on the first day of the first test year in the general rate case application" as long as the Presiding Officer finds that applicant was not responsible for delay.

Under Section 455.2, interim rate relief is limited to the "rate of inflation." The index for determining the rate of inflation will be the most recent 12-month ending change in the U.S. Cities CPI-U published by the U.S. Bureau of Labor Statistics.

In instances where there are large rate adjustments to be made at the time of implementing final GRC rates, the Commission will incorporate the time value of money that either the ratepayers or shareholders bore for the duration of the interim rate relief period.

The Presiding Officer shall also convene a status conference on the first business day after the date parties file opening briefs. The purpose of this status conference is to determine the need for interim rates and to adopt a procedure to ensure interim rates are filed via advice letter and approved in a timely fashion.