What is a General Rate Case?

Formal Proceedings - Large Utilities

The Rate Case Plan outlines the procedure by which California's large investor-owned water utilities may apply to request increases in their rates. Each Class A utility (a utility with 10,000 connections or more) will file a formal application to the Commission every three years that includes information to justify the proposed rate increase, such as historical company expenses, details on infrastructure improvement projects, and expense projections for the upcoming three years. Each utility must provide notice to its customers by mail and email of the application filing within a certain time period (45 days for companies with monthly billing cycles, or 75 days for companies with longer billing cycles), as well as post notice in a local newspaper within 20 days of the application filing.

After the application is filed, there is a period of 30 days in which protests can be filed, formally disputing the rate increase. Filing a protest or otherwise becoming a formal party to a proceeding allows members of the public to participate on the issues, but also entails certain legal rights and responsibilities. The Public Advocates' Office, an independent branch of the Commission that represents ratepayers, files a protest for each application and undertakes a thorough review of the application's request.

Each application proceeding is overseen by an administrative law judge, or ALJ, who will convene a pre-hearing conference early in the proceeding to set the proceeding's scope, schedule, and options for settlement. After the pre-hearing conference, the Commission will often hold Public Participation Hearings (PPHs) to allow members of the public who would be affected by the rate change to voice their opinions and learn more about the issues. Utilities must notify the public of the PPH between 5 and 30 days in advance, by mail and email, as well as in a local newspaper.

Beyond attending a PPH, anyone can be involved in a GRC proceeding by becoming a party. Parties to the proceeding may file testimony, write briefs, and present evidence in evidentiary hearings. The Public Advisors Office provides information on becoming a party, filing formal documents, and more. Often the parties will reach a settlement, which will be incorporated into the ALJ's proposed decision to authorize, deny, or partly authorize the requested rate increase.

The proposed decision comes before the CPUC Commissioners, who may either accept or reject the proposed decision from the ALJ or revise the proposed decision. The Commissioners will vote on the final decision at one of the Commission's public meetings that are listed here.

Informal Proceedings - Small Utilities

For utilities with less than 10,000 connections, the general rate case process is done through a less formal process. The utility may request a rate increase by filing an advice letter that is reviewed by Water Division staff. The utility is required to provide notice of the advice letter filing to its customers by mail, bill inserts, or email at least 30 days before the proposed rate increase would take effect.

Anyone can file a protest to dispute the rate increase within 20 days of the notice being sent and if more than 50% of the utility's customers file a protest, Water Division consider rejecting the advice letter and referring the rate request to the Administrative Law Judge Division of the Commission to assign an application number and have the rate request processed as a formal proceeding as discussed above.

Water Division staff will perform a field inspection of the utility's facilities, which is followed by a public meeting where the utility will justify the rate case to its customers and the customers may voice comments or objections. The utility must provide notice of the public meeting between 5 and 30 days in advance, by mail and email, as well as in a local newspaper.

Once Water Division has evaluated the advice letter, staff will draft a resolution that will be sent to everyone who had previously commented on the application in writing or, at the public meeting, asked to receive it. These parties may reply with comments that will be incorporated into the proposed resolution, which will then be voted upon by the CPUC Commissioners.

Resources and Further Reading

The CPUC has published a video that outlines the general rate case process (https://youtu.be/XRksVgvkc-Y)

The CPUC offers a video series with information on filing complaints, protesting applications, and more (https://www.youtube.com/view_play_list?p=D954F8C7552604CB)

The CPUC offers a subscription service, so that documents filed in a proceeding can arrive directly in your inbox (http://subscribecpuc.cpuc.ca.gov/)

Anyone can use the docket card website to search for information about a specific proceeding, provided the CPUC proceeding number is known (https://apps.cpuc.ca.gov/apex/f?p=401:1:0)