2. Procedural Background

This application was filed on January 14, 2004, and reviewed by the Commission's Water Division. In Resolution ALJ 176-3129 dated February 26, 2004, the Commission preliminarily categorized this application as ratesetting, and preliminarily determined that hearings were not necessary. Since two protests have been received, our order today amends the categorization to find that a public hearing is necessary. The scope of this proceeding is set forth in the application and the two protests.

The application was amended on April 16, 2004, to identify the newly formed subsidiary of Cal-Mich that would acquire and operate Mesa Crest pursuant to Pub. Util. Code §§ 851-854. Mesa Crest notified ratepayers and conducted a public meeting to describe the proposed transfer on March 24, 2004. Seven ratepayers attended.

When two formal protests to the application were filed soon after the public meeting, this application was reassigned from the Commission's Water Division to the Administrative Law Judge (ALJ) Division, and the assigned ALJ accepted the protests and scheduled a public hearing in Los Angeles on May 18, 2004. At hearing, the Commission heard from two witnesses for Mesa Crest and Cal-Mich and two witnesses representing the protestants. The matter was deemed submitted for Commission decision upon receipt of transcripts on May 20, 2004.