II. Procedural History
In accordance with the Commission's Rate Case Plan for Class A Water Companies,1 Valencia filed its proposed General Rate Case (GRC) application at the beginning of May 2006. On May 31, DRA delivered to Valencia a deficiency letter, identifying a series of perceived deficiencies in the proposed application. After addressing each of these items and revising the proposed application as appropriate, Valencia filed its application on July 3, 2006, including a total of 22 exhibits and other requisite attachments. The application was served on potentially interested parties and was noticed in the Commission's Daily Calendar for July 7, initiating a 30-day protest period. The only protest submitted was that of DRA, filed August 1, 2006.
A prehearing conference was held on October 2, 2006. On October 4, 2006, the assigned Administrative Law Judge (ALJ) issued a ruling directing Valencia to file a response identifying the portions of its GRC application in which the issues on a checklist in Water Division Director Kevin Coughlan's July 19th letter to all Class A California water companies were addressed; and further directing Valencia, to the extent its application had not addressed an issue on the checklist, either to address the issue or to show good cause why the issue need not be addressed in this GRC. DRA served its reports on Valencia's results of operations and on Valencia's cost of capital on October 10, 2006. On October 13, 2006, Valencia submitted a letter accompanied by supplemental testimony in response to the ALJ's order. DRA filed a reply to the letter on October 20, 2006. A Public Participation Hearing (PPH) was held in the City of Valencia on the evening of October 23, 2006 and Valencia responded to the DRA staff reports by serving the rebuttal testimony of six witnesses on October 25, 2006.
Following the service of rebuttal testimony, the parties turned their attention toward the possibility of settling some or all issues presented in this GRC. Valencia and DRA held settlement discussions beginning October 31, and continuing through November 8, resulting in the parties' agreement in principle on a stipulation as to most issues that previously had been contested by DRA but identifying certain issues as still in dispute. Negotiation of the precise terms of the proposed stipulation were not completed until just after the close of evidentiary hearings on November 28, 2006. The terms of the stipulation between Valencia and DRA were submitted into evidence as Exhibit 39.
Evidentiary hearings in this GRC were held November 27 and 28, 2006, at the Commission's offices in Los Angeles. Seven witnesses appeared for Valencia and four for DRA, each adopting his or her previously circulated prepared testimony, in some cases offering additional direct testimony, and responding to cross-examination. The prepared testimony of five additional witnesses for Valencia and two additional witnesses for DRA was received without appearances or cross-examination. A total of 55 exhibits were received into evidence in the course of the hearing, with two additional exhibits submitted thereafter (Exhibit 39, the Stipulation; and Exhibit 40, a Valencia exhibit regarding earnings growth for DRA's comparable group of companies).
Opening briefs were filed on January 22, 2007 and reply briefs on February 5, 2007.
1 Rulemaking to Evaluate Existing Practices and Policies for Processing General Rate Cases and to Revise the General Rate Case Plan for Class A Water Companies, D.04-06-018, Appendix (Rate Case Plan).
