ALJ/MAB/sid DRAFT Agenda ID #5350

Ratesetting

Decision PROPOSED DECISION OF ALJ BUSHEY (Mailed 2/10/2006)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of SOUTHERN CALIFORNIA WATER COMPANY (U 133-W), for an Order pursuant to Public Utilities Code Section 851 approving a Reallocation Agreement with the City of Folsom, as directed by D.04-04-069.

Application 04-07-018 (Filed July 8, 2004)

O'Melveny & Myers, LLP, by Patricia A. Schmiege,

Attorney at Law, Keith Switzer, and Roland Tanner
for Southern California Water Company, applicant.

Morrison & Foerster, LLP, Derek F. Foran, for the City of

Folsom, interested party.

Cleveland W. Lee, Attorney at Law, and Sung B. Han,

for the Office of Ratepayer Advocates.

OPINION DETERMINING RATEMAKING TREATMENT FOR PROSPECTIVE REVENUES FROM SALE OF WATER RIGHTS AND DENYING APPROVAL PURSUANT TO SECTION 851¹

Summary

This opinion orders Southern California Water Company (SCWC) to record revenue received from the City of Folsom in a regulated account for the benefit of ratepayers, and to prudently provide such water resources as are necessary to serve its public utility customers. SCWC's request for approval of a permanent lease pursuant to § 851 is denied; however, the City of Folsom's rights under § 851 are not changed.

¹ Unless indicated otherwise, all statutory citations are to the Public Utilities Code.