5.1. Standard of Review
We review this uncontested settlement pursuant to Rule 12.1(d) which provides that, prior to approval, the Commission must find a settlement "reasonable in light of the whole record, consistent with the law, and in the public interest." We find the Revised Settlement Agreement meets the Rule 12.1(d) criteria, and discuss each of the three criteria below.
Initially, we note that the circumstances of the settlement, particularly its endorsement by all parties, generally support its adoption. DRA, which represents ratepayer interests, initially protested the application. DRA and TURN, which also represents ratepayer interests, both actively participated in the proceeding and in the settlement negotiations. In addition to PG&E's application, testimony, and exhibits, DRA and TURN served testimony on all issues raised in the application. Thus, the Revised Settlement Agreement was reached after careful analysis of the application by parties representing a broad array of affected interests. The record also shows that the Revised Settlement Agreement was reached after substantial give-and-take between the parties which occurred over several settlement conferences. This give-and-take is demonstrated by the positions initially taken by parties in the application, testimony, and the final positions agreed upon in the Revised Settlement Agreement.
The Revised Settlement Agreement is also consistent with Commission decisions on settlements, which express the strong public policy favoring settlement of disputes if they are fair and reasonable in light of the whole record.5 This policy supports many worthwhile goals, including reducing the expense of litigation, conserving scarce Commission resources, and allowing parties to reduce the risk that litigation will produce unacceptable results.6 As long as a settlement, taken as a whole, is reasonable in light of the record, consistent with law, and in the public interest, it may be adopted. We next analyze these criteria with specific reference to the Revised Settlement Agreement.
5.2. Settlement Agreement is Reasonable in Light of the Whole Record
The documents filed and served in this proceeding, including but not limited to, the Application, DRA's and TURN's protests, testimony and exhibits served by the various parties and admitted to the record by this Decision, the Joint Motion, and Revised Settlement Agreement, contain the information necessary for us to find that the rate reduction and other items in the Revised Settlement Agreement are reasonable, supported by the record, and represent a reasonable compromise of the parties' positions.
5.3. Settlement Agreement is Consistent with Law
The Joint Parties believe that the terms of the Revised Settlement Agreement comply with all applicable statutes. These include, e.g., § 451, which requires that utility rates must be just and reasonable, and § 454, which prevents an increase in public utility rates unless the Commission finds such an increase justified. We agree that the required showings under §§ 451 and 454 have been made. Further, nothing in the Revised Settlement Agreement contravenes statute or prior Commission decisions.
5.4. Settlement Agreement is in the Public Interest
The Revised Settlement Agreement is in the public interest and in the interest of PG&E's customers. The agreed-upon SmartACTM Program budget is significantly below PG&E's original request.
Approval of the Revised Settlement Agreement avoids the cost of further litigation, and reduces the use of valuable resources of the Commission and the parties. Finally, we note that the settling parties comprise all of the active parties in PG&E's application, and no party contests the Settlement Agreement. Thus, the Revised Settlement Agreement commands the unanimous sponsorship of all active parties in this proceeding, who fairly represent the interests affected by the Revised Settlement Agreement. We find that the evidentiary record contains sufficient information for us to determine the reasonableness of the Revised Settlement Agreement and for us to discharge any future regulatory obligations with respect to this matter. For all these reasons, we approve the Revised Settlement Agreement as proposed.
5 See D.05-03-022 at 9.
6 Id.