4. Scope and Schedule

The OIR set forth the proceeding's scope and determined that the Commission would address the following issue in an interim decision.

"The existing procedure for recovery from balancing accounts is as follows: (1) Utilities, at their option, may request a surcharge once under collections reach 2%; (2) Otherwise, balancing account review and recovery of remaining balances are processed at the time of the district's next GRC. Should the Commission revise its existing procedures for recovery of under collections or over collections in balancing accounts that existed prior to, and were suspended on November 29, 2001? If so, what specific procedures should be implemented (A) for districts that are within their rate case cycle and are not over earning either on any basis; (B) for districts that are within their rate case cycle and are over earning on an actual or on a pro-forma basis; (C) for districts that have stale adopted quantities because they are outside their rate case cycle.?" (OIR at p. 5.)

The OIR also set forth other issues to be considered in this proceeding in a final decision.

"Should the Commission revise its existing rules for obtaining offset rate increases to include consideration of (A) whether the district/utility is outside its rate case cycle? (B) whether the district/utility is over earning on an actual basis? (C) whether district/utility is over earning on a weather adjusted pro-forma basis?

"Should an earnings test be employed to determine whether a district/utility should be allowed to recover all, none, or some portion of under collections in a balancing account? If so, should the test be weather adjusted or actual recorded earnings?

"Should offset rate increases and attendant balancing account treatment be available only to the district/utility that has subjected itself to the scrutiny of a GRC and is currently in that rate case cycle?

"If a district/utility outside its last rate case cycle is eligible for offset rate increases and attendant balancing account treatment, what calculation should be used to replace the stale adopted quantities from the last GRC?" (Id.)

This ruling confirms that the above issues comprise the scope of this proceeding. In order for the Commission to address these issues, the OIR required that respondents (Class A and B water and sewer utilities)¹ and the Office of Ratepayer Advocates (ORA) answer the questions set forth in the attachments and that the utilities provide balancing account and earnings information. After reviewing the initial responses, it may be more efficient to address the interim issue and remaining issues in one decision (rather than two) because similar policies and data are relevant to both inquiries. For example, based on the comments received to date, all parties except ORA believe that the existing practices and policies for processing offset rate increases and balancing accounts should remain in place, and ORA recommends that the Commission apply its recommended procedures to both the balancing accounts in existence prior to and after November 29, 2001. However, until we receive the parties' March 22 comments, we cannot make a final determination as to whether both an interim and a final decision are necessary.

Therefore, we modify the schedule in the OIR as set forth below. If the draft decision scheduled to mail no later than May 31 does not address all OIR issues, we will issue a revised scoping memo setting forth the remaining schedule.

This modified schedule supercedes that in the OIR.

Event	Date
Respondents and ORA file Opening Comments on Remaining Issues (Appendix B, Part III)	March 22, 2002
Workshop on expense component of means test (see Section 5)	March 27, 2002, from 11:00 a.m. through 1:00 p.m., in Room 3105 California Public Utilities Commission, State Office Building, 505 Van Ness Avenue, San Francisco
Respondents and ORA file reply comments on Remaining Issues (Appendix B, Part III)	April 2, 2002
Workshop Report Issues	April 5, 2002
Proposed decision issues	No later than May 31, 2002

¹ Class C and D water and sewer utilities may, but need not, respond to the OIR.