Comments on the Proposed Decision

The proposed decision of the ALJ was mailed to the parties in accordance with Public Utilities Code Section 311(d), and opportunity for comment was provided pursuant to Rules 77.2-77.5 of the Rules of Practice and Procedure. Initial comments were timely filed by Staff. Respondents filed no initial comments, but tendered reply comments on May 30, 2003, five days late. Respondents filed a motion for leave to file these comments, which the ALJ granted on June 6, 2003.

Staff's comments largely reargue positions taken in its briefs, and urge us to interpret facts in a different manner than did the ALJ's proposed decision and alter our findings accordingly. Rule 77.3 requires comments to point to specific errors in the proposed decision, and prohibits parties from "merely [rearguing] positions taken in briefs...." Comments that disregard this prohibition are accorded no weight under that rule, and we will not address them here. Certain other comments of Staff, as well as responsive comments of the respondents, suggest that there are omissions in our conclusions and order, and indicate a need to modify them without disturbing the findings of fact. A discussion of these issues follows. We have revised portions of our order to reflect the comments that comply with Rule 77.3.

First, Staff contends that because the proposed decision determines refunds should not be paid, it erroneously fails to adopt a list of customers who paid fees contrary to adopted tariffs. However, there is no need for such a list. No credible list has been developed by either party, nor by the parties in concert, and adopting a particular version would be futile and unnecessary. Our refusal to do so is not erroneous, because no individual refunds will be made under the terms of our order.

Second, Staff contends that the decision erroneously fails to include a conclusion that the respondents violated Section 581, as well as Sections 491 an 825, of the Public Utilities Code. As the respondents point out in their comments, that statute is concerned with responses to requests for information by the Commission, and a violation therefore requires noncompliance with an affirmative prior request for information. It is not erroneous to omit a conclusion that the respondents violated this statute, because there is no evidence to support such a conclusion.

Comments from both sides indicate that the scope of the reconciliation and the procedure to be followed in submitting it should be spelled out with greater specificity to avoid potential disputes concerning compliance. Both parties also express concern that this effort will be undertaken after the proceeding is closed, and the respondents further object to what they perceive as the creation of new evidence after submission. These comments reflect a misunderstanding of our intention simply to correct irregularities revealed in the record that may still be carried on Hillview's books, and ensure that withdrawn funds are either accounted for or repaid. Requiring the respondents to undertake this task is entirely consistent with Section 581, and is necessary as a predicate to future ratemaking for Hillview. The reconciliation is a compliance filing. We commonly require such filings following the conclusion of a proceeding, and it is not necessary that the proceeding remain open to receive such a filing.

Of particular concern to us is the disposition of funds withdrawn from the SDWBA account, as referenced in Finding of Fact 2, as these withdrawals appear not to have been repaid as part of the transaction referenced in Finding of Fact 22. In addition, if it has not already been done, Hillview's books, reports, and accounts should be corrected and restated to reflect all of these transactions. Finally, Hillview's books, reports, and accounts should also be corrected and restated to provide a proper accounting of CIAC and rate base from Test Year 1994 forward, to ensure that its rates are proper.

Both parties criticize the imposition of probation upon the respondents. As we explain in the decision, we include this as a precautionary measure because we conclude that the respondents violated Sections 491 and 825 during the period under investigation as alleged in the OII. We do so without limitation of remedies for other regulatory violations by the respondents. Our inclusion of Ordering Paragraph 3 requiring respondents to comply with all statutes, rules, and orders administered under our jurisdiction is not erroneous, as Staff contends, and is a standard term that we have included in other orders. Noncompliance with this term is a violation of the terms of probation.