9. Subsequent General Rate Cases

We are very concerned that Golden State not consider the settlement as "putting the problem behind them" but should instead view the settlement as a fresh start to vigorously enforce strong and effective internal controls. Golden State needs to clearly and explicitly demonstrate, going forward, that effective internal control is now a corporate core value and not a short-term penance after the Richardson Engineering Company problem.

We therefore direct Golden State to present direct testimony and provide detailed factual support in the next two general rate cases in the form of a thorough and comprehensive presentation on the scope and operation of its internal control system, and the day to day exercise of those internal controls, applicable to all of its California operations. In both general rate case proceedings Golden State must include in its testimony, as a part of the offered evidence on internal control, the most recent audit as required by § 7 in the settlement. The testimony in support of its internal control process must be sponsored by the corporate officer with direct authority and responsibility for internal control. This testimony may be filed under seal based on the confidentiality provision of § 8.4 in the settlement. The purpose of this requirement to serve this testimony and factual support is to emphasize that Golden State, like all regulated utilities, has an affirmative duty to disclose and redress lapses in management oversight, as occurred with Richardson Engineering Company, where the utility failed to exercise adequate internal control. Absent this settlement, ratepayers would still be exposed to paying unreasonable rates which would still contain the unreasonable costs from Richardson Engineering Company.