II. Background

In September 2001, Cal Water filed general rate case (GRC) applications for 15 districts and its general office. The Salinas District was among those for which Cal Water sought a rate increase. Finding common issues of fact or law, the assigned Administrative Law Judge (ALJ) consolidated the applications. In Decision (D.) 03-09-021, the Commission granted Cal Water authorization to increase rates in 14 of the districts and general office but removed the Salinas District due to unique issues of unauthorized service at unapproved rates. We today address both Cal Water's request for a rate increase in the Salinas District and the unauthorized service issues.

Cal Water and the Office of Ratepayer Advocates (ORA) presented a Joint Recommendation on many of the issues in the multi-district case, including the Salinas District. In D.03-09-021, the Commission adopted, with certain modifications, the Joint Recommendation for all consolidated districts with the exception of the Salinas District.¹ The Commission found that the issues arising from Cal Water's unauthorized service were unique to the Salinas District, and that "all issues relating to the Salinas District will be resolved in the separate docket."

Previously, in D.03-01-081, the Commission had considered ORA's allegations that Cal Water was providing unauthorized service and concluded that Cal Water was providing public utility water service in two areas formerly served by mutual water companies but now included as unapproved portions of Cal Water's Salinas District. The Commission found that Cal Water had not obtained approval of either acquisition or for rates being charged these new customers, and set a briefing schedule to resolve the issues of refunds and penalties arising from Cal Water's actions. We resolve these issues in today's decision.