Settlement Discussion

The active parties have tendered an "uncontested settlement" as defined in Rule 51(f), i.e., a "... settlement that (1) is filed concurrently by all parties to the proceeding in which such... settlement is proposed for adoption by the Commission, or (2) is not contested by any party to the proceeding within the comment period after service of the ...settlement on all parties to the proceeding." Rule 51.1(e) requires that settlement agreements be reasonable in light of the whole record, consistent with law, and in the public interest. (See also San Diego Gas & Electric, 46 CPUC2d 538 (1992), for elaboration on the Commission's policy on all-party settlement proposals). The Settlement represents a resolution of all issues among the active parties except certain aspects of rate design, as specified.

RRB's charge is to represent utility ratepayers, and it has earnestly upheld that purpose here. MPWMD's mission is to manage, augment and protect water resources for the benefit of the community and the environment of the greater Monterey Peninsula area, and it has participated in the proceeding and the Settlement to that end. DOD/FEA represents the consumer interest of the Department of Defense and other affected Federal Executive Agencies, including the Presidio of Monterey which alone has annual CalAm water billings in excess of $330,000. CalAm has vigorously pursued its interests and those of its stockholders. The Settlement commands the sponsorship of all four active parties to this proceeding, and those parties are fairly reflective of the affected interests.

CalAm's application and supporting exhibits set out its initial position and its justification for the increases sought. RRB, MPWMD and DOD/FEA in turn prepared direct evidentiary presentations that established and supported their positions on the record, participated in evidentiary hearings, and filed briefs. The Settlement with attached comparative tables, along with the parties' comparison exhibits and other evidentiary material, defines the solution the parties have reached. Where they were unable to reach complete agreement on rate design, they developed their positions in the evidentiary hearings, briefed them, and submitted the unsettled issues to the Commission for determination. It is clear that the parties have arrived at a reasonable agreement in light of the whole record.

Likewise, the record in this proceeding provides sufficient information to permit the Commission to discharge its future regulatory obligations with respect to the parties and their interests.

Pub. Util. Code § 454 provides no public utility shall change any rate except upon a showing before the Commission and a finding by the Commission that the new rate is justified. In this case, the parties have explained their initial positions and what adjustments each has made to arrive at the summaries of earnings and revenue requirements in the Settlement. The resulting rates will bring CalAm's revenues up to necessary levels in test year 2000 and the succeeding two years. We have no hesitation in finding both the rates and their supporting revenue requirements justified by the parties' showings. No provision of the Settlement is in violation of any statute or Commission decision or rule.

We thus conclude that the Settlement meets the requirements of Rule 51.1(e) in that it is reasonable in light of the whole record, consistent with law, and in the public interest.