7. Pajaro Sunny Mesa Community Service District's Status

Pajaro/Sunny Mesa, the proposed transferee, is named as a co-applicant in the applications, and the applications are signed by its general manager, Joe Rosa. Although Pajaro/Sunny Mesa did not appear at the June 7, 2005, prehearing conference, by virtue of having signed the applications we deem it to be a party to the proceeding with all attendant rights and obligations.

By motion filed July 1, 2005, Pajaro/Sunny Mesa seeks to modify its status from "applicant" to "interested party." Pajaro/Sunny Mesa states that, after reviewing the Commission regulations and the District Court's sale order, it believes that its status is best designated and characterized as an "interested party" because it is not regulated by the Commission or under the Commission's jurisdiction or control, and because the District Court did not direct Pajaro/Sunny Mesa to apply to the Commission for approval of the proposed sale.

To the extent that Pajaro/Sunny Mesa is concerned that its designation as an "applicant" places it under the Commission's jurisdiction, its concern is unfounded. Pajaro/Sunny Mesa is not a public utility subject to the Commission's regulatory authority and will not become a public utility if the proposed transfers are approved; designating Pajaro/Sunny Mesa as an "applicant" does not alter that fact. Nor do our rules require "applicants" to be public utilities. An "applicant" is a party that initiates an application. Although applicants are usually entities subject to our jurisdiction, this is not always the case. For example, a party seeking rehearing of a Commission decision pursuant to Article 21 need not be a public utility, but is an "applicant" for purposes of the rehearing application. Applicants seeking to construct a public highway across a railroad under Rule 38 are not public utilities, but may be municipalities, counties, states, or other governmental authorities. The fact that Commission approval is statutorily required for certain actions does not make the party seeking such approval a public utility.

The Receiver's brief on legal standards indicates that Pajaro/Sunny Mesa informed the Receiver that Commission approval of the proposed sales is not required because Pajaro/Sunny Mesa is not regulated by the Commission. We advise the Receiver and Pajaro/Sunny Mesa that is not the case. Pub. Util. Code § 851 requires the Commission to approve any and all sales and dispositions of public utility property that is used and useful in the transferor's performance of its duties to the public. Section 854(a) prohibits any person or corporation to acquire a public utility without prior Commission authorization. Any sale or disposition that occurs without our approval is void and without legal effect. There is no statutory exemption for sales to entities that do not fall within the Commission's jurisdiction.

In order to evaluate whether these proposed transactions meet the standard for review, the Commission necessarily requires the appearance of the proposed transferee. This requirement is reflected in Rule 35 which requires all parties to the proposed transaction to sign the application, thus certifying the facts and legal contentions stated in it (Rule 2.2(b)).

Pajaro/Sunny Mesa's status as "applicant" appropriately reflects that it is a signatory to the applications. It does not place Pajaro/Sunny Mesa under the Commission's regulatory authority. However, Pajaro/Sunny Mesa's participation as a signatory to the applications is required for our consideration of the applications. Accordingly, we deny Pajaro/Sunny Mesa's motion to change its status from "applicant" to "interested party."