ALJ/BMD/avs DRAFT Agenda ID # 5069

Ratesetting

12/1/2005 Item 16

Decision PROPOSED DECISION OF ALJ DeBERRY (Mailed 11/2/2005)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Silverado Stages, Inc. for Authority to Operate as a Passenger Stage Corporation Between Points in San Luis Obispo and Santa Barbara Counties and the Los Angeles International Airport and the Ports of San Pedro and Long Beach and to Establish a Zone of Rate Freedom.

Application 04-07-033 (Filed July 15, 2004)

(See Appendix A for Appearances)

OPINION GRANTING AUTHORITY TO OPERATE
AS A PASSENGER STAGE CORPORATION

Summary

This decision grants authority to Silverado Stages, Inc. (Silverado) to operate as a passenger stage corporation (PSC) between points in San Luis Obispo and Santa Barbara Counties (Counties) and points in Southern California. The authority granted to Silverado will establish a new scheduled passenger stage service between the Counties and the Los Angeles International Airport (LAX) and the Ports of San Pedro and Long Beach (Ports), and establish a Zone of Rate Freedom (ZORF) for passenger fares.

The authority granted today to provide scheduled passenger service is in a geographical area already served by carriers that have below-capacity loads on many scheduled trips during the year. We must therefore determine whether there is a public need for the additional scheduled service without violating Pub. Util. Code § 1032(b),¹ which requires that the Commission find that existing carriers will not provide the same service before granting a new certificate to operate in the same territory. In the instant application our review of the new service indicates that it is differentiated from the existing service by different types of operating equipment and by providing new service to the Ports.

We recognize that granting this new authority may negatively impact existing carriers, however, as we have stated previously it is "our perception that the introduction of reasonable competition tends to keep fares low, promote efficiency, and encourage good service. Correspondingly, the need for regulatory oversight is greatly diminished, because it is replaced by the introduction of consumer choice."² We take this action today to provide reasonable competition.

¹ All statutory references are to the California Public Utilities Code, unless otherwise noted.

² Decision (D.) 00-06-073 (June 22, 2000), mimeo, p. 12.