7. Assignment of Proceeding

Catherine J.K. Sandoval is the assigned Commissioner and Melissa K. Semcer is the assigned ALJ in this proceeding.

Findings of Fact

1. GSWC, on behalf of its Bear Valley Electric Service Division, and DRA filed an all-party Settlement Agreement that resolves all disputes regarding the reasonableness of costs incurred in the CEMA related to mitigation of the bark beetle infestation for the time period June 30, 2005 through April 30, 2007, along with interest accrued through December 31, 2010, and the January 2010 wind and snow storms.

2. Bear Valley Electric incurred bark beetle costs in response to a declared state of emergency, and in compliance with a governmental order, to remove dead, dying and diseased trees and vegetation from the utility right-of-ways.

3. The January 2010 winter storms resulted in downed transmission and distribution poles and damaged transformers and caused widespread loss of electrical service. The storm was declared a local emergency by San Bernardino County and a state of emergency by Governor Schwarzenegger. Bear Valley Electric incurred costs in order to restore electric service to customers.

Conclusions of Law

1. The disaster declarations issued by Governors Davis and Schwarzenegger constitute events declared to be a disaster by competent state or federal authorities for the purposes of Section 454.9.

2. Bear Valley Electric's use of the CEMA for recording and recovering bark beetle-related costs incurred between June 30, 2005 and April 30, 2007 (plus interest accrued through December 31, 2010) and costs incurred as a result of the January 2010 storms is appropriate under Section 454.9 and Resolution E-3238.

3. The costs, interest, and carrying costs adopted in the Settlement Agreement related to mitigation of the bark beetle infestation and the January 2010 winter storm are reasonable and should be approved.

4. It is reasonable for Bear Valley Electric to recover costs related to the bark beetle infestation for the period January 30, 2005 through April 30, 2007 (plus interest accrued through December 31, 2010) and costs related to the January 2010 storms via a per-kWh surcharge amortized over a 12-month period.

5. It is reasonable to implement the per-kWh surcharge to recover costs booked into the CEMA via a Tier 1 advice letter filed within thirty days of the effective date of this decision.

6. It is reasonable for Bear Valley Electric to book any over- or under-collection of approved CEMA costs into the Base Rate Revenue Adjustment Mechanism.

7. The provisions of the Settlement Agreement are reasonable and should be approved.

8. The all-party Settlement Agreement complies with Article 12 of the Commission's Rules of Practice and Procedure and is reasonable in light of the whole record, consistent with the law, and is in the public interest.

9. Customers were properly noticed of the proposed rate increase pursuant to Rule 3.2 (c) and 3.2(d).

10. The designation of this proceeding should be changed so that hearings are no longer necessary.

11. An order in this proceeding should be effective immediately.

12. Application 11-06-001 should be closed.

ORDER

IT IS ORDERED that:

1. The January 10, 2010 Joint Motion, as amended on April 25, 2012, of Golden State Water Company, on behalf of its Bear Valley Electric Service Division (Bear Valley Electric), and the Division of Ratepayer Advocates for Approval and Adoption of Proposed Settlement Agreement is approved without modification and includes the following key provisions:

a. Bear Valley Electric, a division of Golden State Water Company, shall recover $412,442 on Catastrophic Event Memorandum Account-booked direct costs related to the bark beetle infestation for the period January 1, 2005 through April 30, 2007.

b. Bear Valley Electric, a division of Golden State Water Company, shall recover $42,016 in carrying costs on Catastrophic Event Memorandum Account-booked bark beetle direct costs for the period January 1, 2008 to December 31, 2010.

c. Bear Valley Electric, a division of Golden State Water Company, shall recover $66,426 in under-collection resulting from approval of Advice Letter 210-E, which authorized amortized recovery of $350,703 in costs and accrued interest for bark beetle infested tree removal and related costs that were incurred during the period April 3, 2005 through June 30, 2005.

d. Bear Valley Electric, a division of Golden State Water Company, shall recover $0 in carrying costs on the $66,426 under-collection.

e. Bear Valley Electric, a division of Golden State Water Company shall recover $275,196 on Catastrophic Event Memorandum Account-booked direct costs related to the January 2010 storms.

f. Bear Valley Electric, a division of Golden State Water Company shall recover $0 on Catastrophic Event Memorandum Account-booked carrying costs related to the January 2010 storms.

g. Bear Valley Electric, a division of Golden State Water Company is authorized to recover the total amount $769,080 by means of a kilowatt-hour surcharge implemented over a twelve-month period.

h. The kilowatt-hour surcharge shall be implemented in accordance with a Tier 1 advice letter, which shall be filed by Bear Valley Electric, a division of Golden State Water Company, within thirty (30) days after issuance of this decision.

i. Bear Valley Electric, a division of Golden State Water Company, must book any over- or under-collection of the cost recovery authorization pursuant to this decision into the Base Rate Revenue Adjustment Mechanism.

2. A hearing is not needed in this proceeding.

3. Application 11-06-001 is closed.

This order is effective today.

Dated June 7, 2012, at San Francisco, California.

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