A General Rate Case (GRC) is the major regulatory proceeding for California utilities, which provides the CPUC an opportunity to perform an exhaustive examination of a utility's operations and costs. Typically performed every three years, the GRC allows the CPUC to conduct a broad and detailed review of a utility's revenues, expenses, and investments in plant and equipment to establish an approved revenue requirement.

The Commission may schedule a formal evidentiary hearing. At these hearings, the Commission will receive the expert testimony of Park, the Commission's independent Division of Ratepayer Advocates (DRA), and other interested parties including the utility's customers. The DRA staff consists of engineers, accountants, economists, and attorneys who independently evaluate the proposals of utilities and present their recommendations to the Commission.

After considering all proposals and evidence presented during the formal hearing process, the CPUC's Administrative Law Judge (ALJ) will issue a proposed decision. When the Commission issues a final decision, it may adopt all or part of the ALJ's proposed decision as written, amend or modify it, or deny the Application all together. The Commission's final decision may be quite different from the original request.

How Water Rates Are Set

The Public Utility Act of 1912 mandated that private utility companies like Park Water be regulated. As a result, to change our rates or operating procedures, we must submit a General Rate Case (GRC) application or advice letter to the California Public Utilities Commission (CPUC) indicating our intent. Included in our GRC are detailed estimates for expenses, capital expenditures, and water sales on a forward-looking basis.

Expenses are costs that have short-term benefits. These costs are estimated on an annual basis. Capital expenditures are costs with long-term value. Cost recovery on capital expenditures is spread over the years the benefits will occur. For example, the cost of a reservoir is recovered in rates over its expected useful life of 40 years.

Performed every three years, the GRC is the major regulatory proceeding which provides the CPUC an opportunity to perform an exhaustive examination of Park’s operations. The CPUC takes a broad, in-depth look at our revenues, expenses, and financial outlook and considers the quality of service and other factors to arrive at just and reasonable rates.

The CPUC’s Office of Ratepayer Advocates audits Park’s GRC and makes a recommendation. The CPUC may also host public hearings to receive input from customers on the GRC application. The GRC concludes with a formal hearing where an Administrative Law Judge issues a proposed decision and the Commissioners vote on that decision. To the extent that the Commission finds expenses, capital expenditures, and other costs are necessary and reasonable, a rate change is authorized. For more information, please visit www.cpuc.ca.gov.