ALJ/TIM/sid Date of Issuance 3/14/2008

Decision 08-03-021 March 13, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of CALIFORNIA WATER SERVICE COMPANY (Applicant) (U-60-W), a California corporation, requesting an order from the California Public Utilities Commission (Commission) authorizing Applicant to increase water rates to fully fund its retiree healthcare plan commonly referred to as a `Postretirement Benefits other than Pension' (PBOP) plan and to adopt a change in accounting as proposed by Applicant for ratemaking.

Application 06-12-025 (Filed December 21, 2006)

OPINION AUTHORIZING THE RECOVERY OF THE UTILITY'S REGULATORY ASSET FOR POST RETIREMENT BENEFITS OTHER THAN PENSIONS

TABLE OF CONTENTS

Title Page

OPINION AUTHORIZING THE RECOVERY OF THE UTILITY'S REGULATORY ASSET FOR POST RETIREMENT BENEFITS OTHER THAN PENSIONS 2

1. Summary 2

2. Procedural Background 2

3. Regulatory Background 3

4. Summary of A.06-12-025 6

5. Issues 8

5.1. Compliance with OP 1 of D.92-12-015 8

5.1.1. Position of the Parties 8

5.1.2. Discussion 9

5.2. Compliance with OP 2 of D.92-12-015 12

5.2.1. Position of the Parties 12

5.2.2. Discussion 13

5.3. Compliance with OP 4 of D.92-12-015 14

5.3.1. Position of the Parties 14

5.3.2. Discussion 16

5.4. Compliance with D.93-08-033 17

5.4.1. Position of the Parties 17

5.4.1.1. DRA 17

5.4.1.2. Cal Water 20

5.4.2. Discussion 22

5.5. Alleged Harm and Proposed Remedies 27

5.6. Approval of A.06-12-025 27

6. Category and Need for Hearings 28

7. Comments on the Proposed Decision 28

8. Assignment of the Proceeding 29

Findings of Fact 29

Conclusions of Law 30

ORDER 30

OPINION AUTHORIZING THE RECOVERY OF THE UTILITY'S REGULATORY ASSET FOR POST RETIREMENT BENEFITS OTHER THAN PENSIONS

1. Summary

This opinion authorizes California Water Service Company (Cal Water) to recover over a 15-year period its regulatory asset for post-retirement benefits other than pensions (PBOP). The amount of regulatory asset is $9.87 million.

This proceeding is closed.