2. Jurisdiction
This application seeking a transfer of indirect control over Valencia Water Company (Valencia) is subject to Pub. Util. Code § 854.1 The Commission previously approved a transfer of indirect control over Valencia in Decision (D.) 07-09-026 (the 2007 Decision). Section 854 requires Commission approval for a transfer of control of a utility. There are several subsections of § 854 that must be considered in determining whether the proposed transfer of control of Valencia is in the public interest.
2.1. Section 854(a)
Section 854(a) requires Commission approval before any person or corporation merges, acquires, or controls any public utility organized and doing business in this state. The Commission has broad discretion to determine if it is in the public interest to authorize a transaction pursuant to this section.
The primary standard used by the Commission to determine if a transaction should be authorized under § 854(a) is whether the transaction will adversely affect the public interest.2 The Commission may also consider if the transaction will serve the public interest. When necessary and appropriate, the Commission may attach conditions to a transaction in order to protect and promote the public interest.3
2.2. Section 854(b) and (c)
The additional criteria needed for authority to transfer control of a utility set forth in subsections (b) and (c) are not applicable in this instance because those subsections do not pertain to water corporations such as Valencia. Those subsections pertain only to electric, gas, and telephone utilities having gross annual California revenues in excess of $500 million.
2.3. Section 854(d)
Section 854(d) requires that when reviewing a merger, acquisition, or control proposal, the Commission shall consider reasonable options to the proposal recommended by other parties, including no new merger, acquisition, or control, to determine whether comparable short-term and long-term economic savings can be achieved through other means while avoiding the possible adverse consequences of the proposal. With no party submitting alternative proposals, § 854(d) is not applicable in this proceeding.
1 All statutory references are to the Public Utilities Code unless otherwise stated.
2 See Decision (D.) 00-06-079, 7 CPUC3d 101 at 107.
3 See D.02-12-068, slip op., at 11.
