Conclusions

While it is not possible to forecast with certainty the benefits the acquisition will generate for CalAm and ratepayers, CalAm's latest synergies study and the results set forth in Tables 1, 2 and 3 are sufficiently reliable and conclusive for our purposes in this proceeding.

Table 1 convinces us that CalAm's alternative sharing proposal is more favorable to ratepayers in terms of reducing revenue requirement than the "§2720 Return On Only" and "§2720 Return Of and On" alternatives, and far better than the No-Acquisition alternative. Table 2 shows that CalAm's alternative sharing proposal delivers to ratepayers roughly half of the synergies savings generated by the acquisition and is far better for ratepayers than the No-Acquisition alternative. Similarly, API's Table 3 shows that ratepayers' share of the net benefits compares favorably with that of Applicants.³⁰

API's presentation of the likely rate effects shows that, after initially higher rates during the first two to three years, authorizing the acquisition under any of the three ratemaking treatments would produce significantly lower rates than the No-Acquisition alternative for the indefinite future. Of the three Section 2720-compliant acquisition ratemaking treatments, CalAm's alternative sharing proposal is best because it is the only one which does not increase rates at any time, yet it provides comparable rate decreases for the indefinite future.

We agree that in the aggregate the non-quantifiable and non-monetary advantages Applicants claim are valid and significant benefits, although they would not have been sufficient in themselves to overcome Section 2720's ratesetting disadvantages had CalAm not offered the alternative sharing proposal.

No party contends that CalAm is not fully qualified to assume the public utility responsibilities now borne by Citizens, or that CalAm would be any less qualified than Citizens in that regard.

CalAm's acquisition of Citizens' water utility assets is in the public interest. We will approve the acquisition under the conditions outlined above pertaining to CalAm's alternative sharing proposal.