THEREFORE IT IS ORDERED THAT:

1. Authority is granted under Public Utilities Code Section 454 to North Gualala Water Company, to file an advice letter incorporating the summary of earnings and the revised rate schedules attached to this resolution as Appendix A and B, respectively and concurrently cancel its presently effective Schedule No. 1. The effective date of the revised rate schedules shall be five days after the date of its filing.

2. North Gualala Water Company is authorized to increase its annual revenues by $226,147 or 44.3% for test year 2008.

3. North Gualala Water Company shall coordinate with the Division of Water and Audits to schedule a public meeting and develop informational mailers describing the increasing block water rates and informing the customers of the need to conserve water.

4. Division of Water and Audits recommends that North Gualala update tariff Rules 5, Special Information Required on Forms; 10, Disputed Bills; 20, Water Conservation; and No. 21, Fire Protection; and Form 3, Bill for Service; and the Title Page.

5. This resolution is effective today.

I certify that the foregoing resolution was duly introduced, passed, and adopted at a conference of the Public Utilities Commission of the State of California held on October 2, 2008; the following Commissioners voting favorably thereon:

PAUL CLANON

Executive Director

 (END OF APPENDIX A)

APPENDIX B

North Gualala Water Company

Schedule No. 1

GENERAL METERED SERVICE

APPLICABILITY

Applicable to all metered water service

TERRITORY

Gualala and vicinity located approximately 15 miles south of Point Arena, Mendocino County.

RATES

Quantity Rates: Per Meter SDWBA Surcharge

Per Month Per Meter/Per Month

For 5/8 x ¾-inch meter: (N)

First 300 cu. ft. of water, per 100 cu. ft. $ 4.25 (I)

Over 300 cu. ft. of water, per 100 cu. ft. $ 5.40 (N)

All other meter sizes: (N)

All water, per 100 cu. ft. $ 5.40 (N)

Service Charge:

For 5/8 x ¾-inch meter $ 28.50 (I) $ 14.70

For 3/4-inch meter $ 42.80 (I) $ 22.05

For 1-inch meter $ 71.30 (I) $ 36.75

For 1-1/2-inch meter $ 142.60 (I) $ 73.50

For 2-inch meter $ 228.20 (I) $ 117.60

For 3-inch meter $ 427.90 (I) $ 220.50

For 4-inch meter $ 713.20 (I) $ 367.50

The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is added the monthly charges computed at Quantity Rates.

APPENDIX B

North Gualala Water Company

Schedule No. 1

(continued)

GENERAL METERED SERVICE

SPECIAL CONDITIONS

1. All bills are subject to reimbursement as set forth in Schedule No. UF.

2. The SDWBA (Safe Drinking Water Bond Act) surcharge is in addition to the water bill. This surcharge must be identified on each bill. The surcharge is specifically for the repayment of the California SDWBA loan authorized by Resolution F-645 and Resolution W-4108.

3. A late charge will be imposed per Schedule No. LC.

4. In accordance with Section 2714 of the Public Utilities Code, if a tenant in a rental unit leaves owing the company, service to subsequent tenants in that unit will, at the company's option, be furnished on the account of the landlord or property owner.

(D)

(END OF APPENDIX B)

APPENDIX C

North Gualala Water Company

Test Year 2008

COMPARISON OF RATES:

Monthly Quantity Rate

Quantity Rates: Present New Percent

Rates Rates Increase

For 5/8 x ¾-inch meter:

First 300 cu. ft. of water, per 100 cu. ft. $3.13 $4.25 36%

Over 300 cu. ft. of water, per 100 cu. ft. $3.13 $5.40 73%

All other meter sizes:

All water, per 100 cu. ft. $3.13 $5.40 73%

METERED SERVICE Per Service Connection Per Month:

Present New Percent

Rates Rates Increase

For 5/8 x ¾- inch meters $ 21.80 $ 28.50 31%

For ¾ inch meters $ 27.34 $ 42.80 57%

For 1 - inch meters $ 39.63 $ 71.30 80%

For 1 ½ inch meters $ 65.05 $ 142.60 119%

For 2-inch meters $ 93.67 $ 228.20 144%

For 3-inch meters $ 176.88 $ 427.90 142%

For 4-inch meters $ 268.31 $ 713.20 166%

A monthly bill comparison for a customer with a 5/8 x 3/4 - inch meter is shown below:

Usage Present Recommended Amount Percent

100 cu.ft. Rates Rates Increase Increase

0 $21.80 $ 28.50 $ 6.70 31%

3 31.19 41.25 10.06 32%

6.2 (avg.) 41.21 59.38 18.17 44%

10 53.10 79.05 25.95 49%

15 68.75 106.05 37.30 54%

20 84.40 133.05 48.65 58%

(END OF APPENDIXC)

APPENDIX D

North Gualala Water Company

Adopted Quantities

Test Year 2008

Service Connections

5/8 x ¾- inch meters 1,016

¾ inch meters 7

1 - inch meters 10

1 ½ inch meters 5

2-inch meters 2

3-inch meters 0

4-inch meters 0

Total Water Sold, Ccf: 81,203

Total Water produced, Ccf: 95,533

Total kWh 450,468

kWh/Ccf produced 4.72

Composite rate ($/kWh) 0.15300

PG&E A-1 Schedule

Tax Calculations

Operating Revenues $ 769,300

Expenses $ 612,416

Depreciation $ 30,232

Taxes other than Income $ 63,331

Taxable Income for State $ 63,321

State tax $ 5,598

Taxable Income for Federal $ 57,723

Federal tax $ 9,431

(END OF APPENDIX D)