Conclusions of Law
1. Applicant bears the burden of proof to show that the proposed settlement is reasonable.
2. The proposed settlement is reasonable in light of the whole record, consistent with law, and in the public interest, therefore the Commission may adopt it.
3. The Commission has authority under Pub. Util. Code § 2111 to fine Golden State for withholding information.
4. The Commission has the discretion and authority to resolve issues which were not addressed in the settlement and order additional testimony in subsequent general rate cases.
5. This decision should be effective today.
6. This proceeding should be closed.
Therefore IT IS ORDERED that:
1. The settlement between Golden State Water Company Golden State) and the Division of Water and Audits is adopted. The settlement is available at: http://docs.cpuc.ca.gov/efile/MOTION/138677.pdf. As a result of this settlement Golden State must file a tier 1 advice letter within 30 days of today's decision to implement the following refunds and reductions to rate base:
a. Begin the refunds in the table below.
Golden State Ratemaking Service Areas Refunds over 12 - 36 Months | |
1. Arden-Cordova |
$ 3,578,522 |
2. Bay Point |
$ 1,556,435 |
3. Clearlake |
$ 1,437,211 |
4. Los Osos |
$ 33,983 |
5. Ojai |
$ 986,463 |
6. Santa Maria |
$ 192,566 |
7. Simi Valley: |
$ 993,167 |
8. Region 2 |
$322,325 |
9. Region 3 |
$ 399,328 |
Total |
$9,500,000 |
b. Reduce rate base as shown in the table below:
Golden State Ratemaking Service Areas Rate Base Reductions | |
1. Arden-Cordova |
$ 1,241,460 |
2. Bay Point |
$ 299,587 |
3. Clearlake |
$ 266,684 |
4. Los Osos |
$ 17,841 |
5. Ojai |
$ 250,651 |
6. Santa Maria |
$ 98,265 |
7. Simi Valley |
$ 267,457 |
8. Region 3 |
$ 58,055 |
Total |
$2,500,000 |
c. Immediately reduce the balance of the existing Arden-Cordova Memorandum Account by $500,000 and proportionately reduce the amortization rate for the account.
2. Golden State Water Company, pursuant to the settlement adopted in Ordering Paragraph 1, must pay a fine of $1,000,000 by check or money order payable to the California Public Utilities Commission and mailed or delivered to the Commission's Fiscal Office at 505 Van Ness Avenue, Room 3000, San Francisco, CA 94102, within 30 days of the effective date of this order. Golden State must write on the face of the check or money order "For deposit to the General Fund per Decision 11-12-034."
3. Over a 10-year period Golden State Water Company (Golden State) must pay for all costs of three audits, pursuant to Section 7 of the settlement adopted in Ordering Paragraph 1. The Division of Water and Audits must engage an independent auditor to perform three audits of Golden State's procurement practices for engineering or construction for any and all capital projects begun in 1994 through 2021.
4. Golden State Water Company (Golden State) must serve testimony and introduce other evidence in its next two general rates that provides 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 Ordering Paragraph 3. 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 and other evidence may be filed under seal pursuant to § 8.4 of the settlement adopted in Ordering Paragraph 1 and must remain confidential unless otherwise ordered by the Commission.
5. There was no need for a hearing on the unopposed settlement adopted in Ordering Paragraph 1.
6. Application 10-01-009 is closed.
This order is effective today.
Dated December 15, 2011, at San Francisco, California.
MICHAEL R. PEEVEY
President
TIMOTHY ALAN SIMON
MICHEL PETER FLORIO
CATHERINE J.K. SANDOVAL
MARK J. FERRON
Commissioners
