Comments on Proposed Decision
The proposed decision (PD) of the ALJ in this matter was mailed to the parties on August 6, 2002 in accordance with Pub. Util. Code § 311(d) and Rule 77.1 of the Rules of Practice and Procedure. The only comments submitted in response to the PD were those of the Water Division, which identified two small typographical errors that have been corrected in this decision.
1. By 2000, the Commission was receiving frequent complaints from Ponderosa's customers about irregular billing.
2. On November 27, 2000, the Director of the Water Division sent a letter to Kevin asking Ponderosa to respond to a customer complaint, and to a citation from DHS for failure to submit certain annual reports.
3. Kevin did not forward the November 27, 2000 letter to Orville.
4. The meters of Ponderosa's customers were not read from February 2001 until November 2001.
5. On March 1, 2001, the Chief of the Water Advisory Branch sent Orville a letter requesting that he resume regular billing of Ponderosa's customers, permit customers suffering financial hardship to pay their bills in installments, and submit a plan by March 20, 2001 for resuming regular billing of the water system's customers.
6. Orville responded to the March 1, 2001 letter in a letter dated April 9, 2001. In his response, Orville stated, among other things, that the October 2000 billing cycle had been missed, and that Ponderosa would offer payment arrangements to those customers who needed them.
7. In a separate letter to the Water Advisory Branch dated April 9, 2001, Orville requested an immediate emergency rate increase of approximately 250 per cent for the purpose of paying Ponderosa's power bill.
8. On May 4, 2001, McCrea wrote to Orville explaining that a GRC would be necessary before Ponderosa could be granted a rate increase, and enclosing a copy of the Informal Rate Change Workbook that simplifies the data compilation needed to process a GRC for a water company like Ponderosa.
9. On May 18, 2001, McCrea personally picked up the Informal Rate Change Workbook from Orville. McCrea told Orville at that time that the workbook was incomplete, and that the missing capital items would need to be supplied before the GRC could be processed by the Water Division.
10. Between May 18 and November 1, 2001, McCrea telephoned Orville about once a month to follow up on McCrea's request for the information on capital items missing from the Informal Rate Change Workbook.
11. During one of the phone calls McCrea made between May 18 and November 1, 2001, he spoke directly with Orville, who assured him that he understood what data McCrea wanted, but would need to conduct additional research to obtain it.
12. From May 18, 2001 to the present time, Orville has not furnished McCrea or anyone else at the Commission with the data missing from the Informal Rate Change Workbook.
13. At no time did McCrea or his supervisor, Art Jarrett, promise Orville that a GRC for Ponderosa could be processed without the missing data.
14. Ponderosa has not been granted a rate increase since 1982.
15. Ponderosa's annual operating revenue of approximately $12, 700 is insufficient to pay the PG&E bills, water testing bills and other expenses that must be incurred to provide adequate water service to Ponderosa's customers.
16. On November 1, 2001, Orville contacted the Water Division to inform them that PG&E was threatening to cut off Ponderosa's power later in the day, due to non-payment of Ponderosa's power bill.
17. Later on November 1, 2001, PG&E did cut off Ponderosa's power, and some of Ponderosa's customers went without water as a result.
18. Still later on November 1, 2001, PG&E turned Ponderosa's power back on at the request of the Director of the Energy Division, but only after Orville had agreed by telephone to the installment plan for paying the past-due amounts that is attached as Exhibit 9 to the McCrea Declaration.
19. Although the payment schedule required Ponderosa to pay PG&E $12,100 for past due bills by February 25, 2002, and to pay all new bills when due, Orville paid PG&E only $9,155 by February 25, 2002.
20. Commission Exhibit 4 from the order-to-show-cause hearing accurately represents all of the amounts paid to PG&E by Ponderosa, and billed by PG&E to Ponderosa, from February 9, 2001 to March 28, 2002 inclusive.
21. On the closing date of the order-to-show-cause hearing, Ponderosa still owed PG&E approximately $6,000.
22. Ponderosa's failure to honor the November 1, 2001 payment agreement with PG&E has left its customers vulnerable to another power cut-off by PG&E.
23. The testing of a water system for bacteria is a basic measure of the potability of the system's water, and intrinsically important for the protection of public health.
24. Bacteriological tests were not conducted on Ponderosa's water from November 2001 through March 2002.
25. Ponderosa still has not paid several bills from laboratories for water tests.
26. When four Ponderosa water samples were collected by the Tehama EHD on April 23, 2002, one of the samples came back positive for bacteria.
27. The property taxes on the parcel containing about two-third's of Ponderosa's assets, including its principal source of supply, APN 13-220-351 (the Parcel), first became delinquent on June 30, 1993.
28. No further property taxes were paid on the Parcel until June 30, 1998.
29. On June 30, 1998, Orville entered into a payment plan with the Tehama County Tax Collector whereby the past-due property taxes on the Parcel were to be paid with interest over five years, and all new taxes were to be paid promptly.
30. After paying 20 percent of the amount of past-due property taxes on June 30, 1998, Orville defaulted on the payment plan concerning the Parcel that he had entered into with the Tehama County Tax Collector.
31. The Tehama County Tax Collector placed the Parcel on the list of properties to be sold at auction on May 24, 2001 to satisfy unpaid taxes.
32. When she learned that the Parcel contained most of Ponderosa's assets, and that a buyer might soon be found for the water system, the Tehama County Tax Collector removed the Parcel from the list of properties to be sold at the May 24, 2001 auction.
33. The Parcel was again placed by the Tehama County Tax Collector on the list of property to be sold at auction on May 17, 2002 to satisfy unpaid taxes, but was removed from said list on or about May 16, 2002.
34. Because of the personal antagonism between them, Orville and Kevin refuse to work together to manage Ponderosa.
35. Orville does not have a viable plan for operating Ponderosa with the existing revenues.
36. Kevin does not have a viable plan for operating Ponderosa with the existing revenues, and it is unlikely that he could gain access to Ponderosa's books and records without a lawsuit.
1. Ponderosa has been under Orville's management and control since July 2000, when Kevin abandoned the water system.
2. Ponderosa's failure since 2000 to bill all of its customers on a regular basis has created financial hardship for some customers, and is inconsistent with the requirements of section VII.2. of GO 103.
3. Orville's inability at the hearing to produce his responses to the customer complaints set forth in Commission Exhibits 6, 7 and 8 suggests a violation of section I.8. of GO 103.
4. Orville's failure since May 18, 2001 to provide the Water Division with the capital expenditure data missing from Ponderosa's Informal Rate Change Workbook, which data was needed to process a GRC and thereby increase rates, constitutes an unwillingness or inability to serve Ponderosa's ratepayers adequately.
5. Under the unusual circumstances of this case, Orville's failure to provide the Water Division with the capital expenditure data necessary to process a GRC, which led to the November 1, 2001 power cut-off by PG&E, constitutes a violation of section II.2.a. of GO 103.
6. Orville's failure to honor his November 1, 2001 payment agreement with PG&E, which has left Ponderosa's ratepayers vulnerable to another power cut-off, constitutes an unwillingness or inability to serve Ponderosa's ratepayers adequately.
7. Ponderosa's failure to conduct required bacteriological testing from November 2001 to March 2002 constitutes an unwillingness or inability to serve Ponderosa's ratepayers adequately.
8. Ponderosa's failure to conduct required bacteriological testing from November 2001 to March 2002 constitutes a violation of section II.1.a. of GO 103.
9. The failure of the Figgs brothers to pay property taxes on the Parcel constitutes an unwillingness or inability to serve Ponderosa's ratepayers adequately.
10. The violations of GO 103 identified in these Conclusions of Law constitute unresponsiveness to the rules or orders of the Commission within the meaning of Section 855 of the Public Utilities Code.
11. The respondents have failed to show cause why the Commission should not seek the appointment of a receiver pursuant to Pub. Util. Code § 855 to take possession of and operate Ponderosa.
12. This order should be effective immediately because of the public interest in ensuring the safe and reliable operation of Ponderosa.
IT IS ORDERED that:
1. In accordance with Public Utilities Code Section 855, the Commission's General Counsel is directed to petition the Superior Court of Tehama County to appoint a receiver to assume possession of and operate the Ponderosa Sky Ranch Water Company.
2. The Responsive Declaration Opposing Order to Show Cause submitted by Orville A. Figgs on April 26, 2002 and filed on May 1, 2002 is admitted into the record.
3. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
