ALJ/POD-MFG/tcg Date of Issuance 5/7/2009

Decision 09-05-022

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Investigation on the Commission's Own Motion into the Operations and Practices of the Yermo Water Co. (U-354-W), and its Owner/Operator, Donald Walker; Notice of Opportunity for Hearing; and Order to Show Cause Why the Commission Should Not Petition the San Bernardino County Superior Court for a Receiver to Assume Possession and Operation of the Yermo Water Co. pursuant to the California Public Utilities Code Section 855.

Investigation 08-04-032 (Filed April 29, 2008)

Donald Walker, for Yermo Water Company and Donald Walker, respondent.

Yermo Community Service District, by Robert W. Smith, interested party.

Cleveland W. Lee, Attorney at Law, for the California Public

Utilities Commission, Division of Water and Audits.

TABLE OF CONTENTS

Title Page

DECISION AUTHORIZING SUPERIOR COURT ACTION FOR APPOINTMENT OF A RECEIVER FOR YERMO WATER COMPANY 22

1. Summary 22

2. Background 22

3. Investigation 44

4. Evidentiary Hearing 66

4.1. Actual or Effective Abandoned Water System 77

4.1.1. Resolution W-3812 77

4.1.2. Out-Of-State Operations 88

4.1.3. State Certified Operator 99

4.1.4. Attempt to Sell Without Commission Authority 1010

4.2. Unresponsive to Rules and Orders 1212

4.2.1. CDPH Violations 1313

4.2.2. General Order 103 Violations 1414

4.2.3. Tariffs 1515

4.3. Inability to Adequately Serve Customers 1818

5. Discussion 2020

6. Fines and Penalties 2222

7. Categorization and Need for Hearing 2323

8. Assignment of Proceeding 2323

Findings of Fact 2424

ORDER 2727

Appendix A

Appendix B

Appendix C

DECISION AUTHORIZING SUPERIOR COURT ACTION FOR
APPOINTMENT OF A RECEIVER FOR YERMO WATER COMPANY

1. Summary

This decision authorizes and directs the Commission's Legal Division to commence proceedings in the Superior Court of San Bernardino County for appointment of a receiver to take possession of and operate Yermo Water Company (Yermo), pursuant to Pub. Util. Code § 855. The Commission's Division of Water and Audits shall audit Yermo's 2003 through 2008 user fee calculations and payments. The Division of Water and Audits shall also audit the water company's purchase power billing procedures.