10. Assignment of Proceeding

Timothy Alan Simon is the assigned Commissioner and Michael J. Galvin is the assigned ALJ in this proceeding.

1. Park is a public utility subject to the jurisdiction of this Commission.

2. Park seeks authority to issue up to $20 million of new First Mortgage Bonds.

3. Park seeks to retire $8 million of bonds held by OneAmerica and $10 million of bonds held by Nationwide Life.

4. Park has a reasonable need to issue $20 million on new First Mortgage Bonds in the near future.

5. DRA filed a limited protest requesting that a prudency review of the bonds to be issued by Park should be undertaken as part of Park's scheduled May 2008 Cost of Capital Application. However, DRA did not oppose approval of this application.

6. Official notice is taken of the 30-year Treasury rates at August 1,2008 and September 2, 2008.

7. Park requested as part of its application that a prudency review of the bonds to be issued be undertaken as part of its scheduled May 2008 Cost of Capital Application.

8. Resolution F-616 automatically exempts new bond issues from the Commission's competitive bidding rule if the total amount of new debt financing is $20 million or less.

9. GO 24-B requires utilities to submit a monthly report to the Commission that contains, among other things: (i) the amount of debt and preferred stock issued by the utility during the previous month; (ii) the total amount of debt and preferred stock outstanding at the end of the prior month; (iii) the purposes for which the utility expended the proceeds realized from the issuance of debt and preferred stock during the prior month; and (iv) a monthly statement of the separate bank account that the utility is required to maintain for all receipts and disbursements of money obtained from the issuance of debt and preferred stock.

10. A.08-07-003 does not propose, and today's decision does not authorize, any specific new construction or changes in use of existing assets and facilities.

11. Notice of A.08-07-003 appeared in the Commission's Daily Calendar.

12. In Resolution ALJ 176-3217, the Commission preliminarily determined that this proceeding should be categorized as ratesetting and those hearings would not be necessary.

1. This is a ratesetting proceeding.

2. There is no need for hearings.

3. The proposed issue of bonds is for lawful purposes and the money to be obtained is required for these purposes.

4. Park is authorized to execute and deliver the Eleventh and Twelfth Supplemental Indentures relating to the authorized debt issues.

5. Approval of this application does not constitute a finding of reasonableness of the resultant capital structure and cost of debt for ratemaking purposes.

6. A showing of reasonableness for ratemaking purposes of the capital structure and cost of debt resulting from the transactions, including early retirement of debt and prepayment penalties, should be undertaken in Park's May 1, 2009 scheduled Class A Water Company Cost of Capital Application.

7. Park should continue to adhere to the conditions pertaining to affiliate transactions enumerated in D.04-06-018 and Section 8 of D.06-01-019.

8. The application should be granted as requested.

9. The authority granted by this decision should not become effective until Park has paid the fees prescribed by § 1904 (b).

10. The following order should be effective immediately so that Park may issue as soon as needed the debt authorized herein.

ORDER

IT IS ORDERED that:

1. Park Water Company (Park) is authorized to issue $20 million of new long-term debt to retire and replace existing long-term debt and to reimburse its treasury for monies expended for capital improvements.

2. Park shall make a showing of reasonableness for ratemaking purposes of the capital structure and cost of debt resulting from the transactions, including early retirement of debt and prepayment penalties, as part of its May 1, 2009 scheduled Class A Water Company Cost of Capital Application.

3. Park shall continue to adhere to the conditions pertaining to affiliate transactions enumerated in D.04-06-018 and Section 8 of D.06-01-019.

4. Park may report on a quarterly basis all the information required by General Order 24-B with respect to debt issued pursuant to this decision. Park shall report this information on a monthly basis if directed to do so by Commission staff.

5. Park shall comply with all applicable environmental laws and regulations when planning and implementing any capital expenditure programs that are financed, in whole or in part, with the proceeds from the debt authorized by this decision.

6. Park shall remit to the Commission's Fiscal Office a check for $3,000 as required by § 1904(b) of the Public Utilities Code. The decision number of this decision shall appear on the face of the check.

7. The authority granted by this decision shall not become effective until Park remits $3,000 to the Commission's Fiscal Office.

8. Application 08-07-003 is closed.

This decision is effective today.

Dated September 18, 2008, at San Francisco, California.

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