4. Standard of Review
Pursuant to Rule 12.1(d) of the Commission's Rules of Practice and Procedure (Rules), the Commission's standard of review for both contested and uncontested settlements is whether the settlement taken as a whole is reasonable in light of the whole record, consistent with the law, and in the public interest. Rule 12.4 provides that the Commission may reject a proposed settlement whenever it determines the settlement is not in the public interest.
The applicants alone bear the burden of proof to show that the rates they request are just and reasonable and the related ratemaking mechanisms are fair.4 Thus, if the settlement is rejected, then the reasonableness standard applies to the issues in the proceedings.
For the purposes of these proceedings and as used in the scope set forth above, we define reasonableness for decommissioning expenditures consistent with Commission findings, i.e., that the reasonableness of a particular management action depends on what the utility knew or should have known at the time that the managerial decision was made.5 However, with respect to Phase 1 SONGS Unit 1 decommissioning work, the Commission in D.99-06-007 adopted a ratemaking settlement that included a presumption that the utilities' expenses are reasonable in performing Phase 1 SONGS Unit 1 decommissioning work if the scope of the work completed and the most recently approved SONGS Unit 1 decommissioning cost estimate bound the costs incurred.6
We consider the applications and proposed Settlement based on these standards.
4 D.07-01-003 at 7.
5 See, e.g., D.02-08-064 at 5-8.
6 86 CPUC2d 604, 620 (Settlement § 4.2.2.2c) (1999).
