3. Description of the Proposed
Settlement Agreement

The proposed settlement agreement provides that the Emmetts will pay $10,000 to Nelson within 10 days of the effective date of a Commission decision approving the agreement.

Under the terms of the settlement, Cal Water will also "refund the sum of $20,000 (without interest) to Nelson over a period of 10 years, provided that the Commission approves" treatment of these payments as a "refundable developer's advance." Although not explicitly stated by Cal Water, the settling parties appear to intend that the payments to Nelson be included in Cal Water's revenue requirement and collected from Selma district ratepayers.

These two parties intend that this agreement will fully resolve all issues in this proceeding and completely dispose of Nelson's claim.

Nelson opposes the settlement agreement as being insufficient, given the amount of time he has waited for reimbursement. No representative of ratepayers, who will be funding Cal Water's payments, took part in the negotiations or joined in the settlement.