5. Scope of the Proceeding

In its Order Instituting Investigation (OII), filed October 16, 2003, the Commission ordered that an evidentiary hearing be held, pursuant to Pub. Util. Code § 855, to determine whether: (a) respondents are unable or unwilling to adequately serve their ratepayers and have actually or effectively abandoned the water system; (b) the Commission should petition superior court for the appointment of a receiver to assume possession and operation of the Water Company and its water system; and (c) any fine or penalties should be imposed on respondents for failing to comply with prior Commission orders and directions. The OII recites four incidents in support of these allegations.

Respondents are not required to file, and they have not filed, a response to the OII. At the PHC, however, respondents indicated that they will contest the allegations set forth in the OII.