D1112007 Attachment A

ALJ/DUG/lil Date of Issuance 12/2/2011

Decision 11-12-007 December 1, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Western Water Holdings, LLC, PWC Merger Sub, Inc., Park Water Company (U314W) and Apple Valley Ranchos Water Company (U346W) for Authority for Western Water Holdings, LLC to Acquire and Control Park Water Company and Apple Valley Ranchos Water Company.

Application 11-01-019
(Filed January 21, 2011)

DECISION CONDITIONALLY APPROVING THE APPLICATION
FOR AUTHORITY FOR WESTERN WATER HOLDINGS, LLC, CARLYLE INFRASTRUCTURE PARTNERS WESTERN WATER L.P., AND CARLYLE INFRASTRUCTURE PARTNERS L.P. TO ACQUIRE AND CONTROL PARK WATER COMPANY AND APPLE VALLEY RANCHOS WATER COMPANY

DECISION CONDITIONALLY APPROVING THE APPLICATION FOR AUTHORITY FOR WESTERN WATER HOLDINGS, LLC, CARLYLE INFRASTRUCTURE PARTNERS WESTERN WATER L.P., AND CARLYLE INFRASTRUCTURE PARTNERS L.P. TO ACQUIRE AND CONTROL PARK WATER COMPANY AND APPLE VALLEY RANCHOS WATER COMPANY 1 1

1. Summary 2 2

2. Background 2 2

3. Standards of Review 4 4

3.1. Standard of Review for a Transfer of Control by Acquisition 5 5

3.1.1. Analysis 7 7

3.2. Standard of Review for a Proposed Settlement 10 10

3.2.1. Analysis 11 11

4. Who Are the Applicants 12 12

4.1. Park and Ranchos 12 12

4.2. Carlyle 13 13

5. Proposed Settlement Terms 14 14

5.1. Proposed Settlement's Conditions 14 14

5.2. Necessary Additional Conditions to Approval 15 15

5.3. Ranchos' Water Rights 15 15

5.4. Limited Life of Carlyle Infrastructure Partners L.P. 17 17

6. California Environmental Quality Act 18 18

7. Procedural History 19 19

8. Categorization and Need for Hearings 20 20

9. Comments on Proposed Decision 20 20

10. Assignment of Proceeding 20 20

Findings of Fact 21 21

Conclusions of Law 21 21

ORDER 23 23

ATTACHMENT A

1. Summary

Today's decision conditionally approves the transfer of control of Park Water Company (Park) and Apple Valley Ranchos Water Company (Ranchos) to Western Water Holdings LLC. The latter is wholly-owned by Carlyle Infrastructure Partners Western Water L.P., which in turn is wholly-owned by Carlyle Infrastructure Partners L.P. The decision adopts a proposed settlement between all the applicants and the Division of Ratepayer Advocates; we incorporate the proposed terms and conditions of the proposed settlement after we clarify that none of the conditions may be viewed as limiting the Commission's future discretion. We expand upon the requirement in the proposed settlement imposing a clarified condition that Western Water Holdings LLC must preserve and maintain certain water rights held by Ranchos based upon our clear record concerning those rights. Finally, we also require as a condition of approval that Carlyle Infrastructure Partners L.P., a limited life entity, must file an application with a specific plan for the future disposition of Park and Ranchos no later than 18 months before Carlyle Infrastructure Partners L.P. is dissolved, or otherwise terminated, or modified.

This decision changes no rates or charges and the proceeding is closed.