ALJ/TIM/acr Date of Issuance 6/12/2012

Decision 12-06-005 June 7, 2012

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Joint Application of California Pacific Electric Company, LLC (U933E), Algonquin Power & Utilities Corp., Liberty Energy Utilities Co., Emera Incorporated, Emera US Holdings Inc., and California Pacific Utility Ventures, LLC for Expedited Approval of Indirect Transfer of Control of California Pacific Electric Company, LLC (U933E) Pursuant to California Public Utilities Code Section 854(a).

Application 11-09-012 (Filed September 14, 2011)

DECISION APPROVING SETTLEMENT AGREEMENT

DECISION APPROVING SETTLEMENT AGREEMENT 1

1. Summary 2

2. Background 2

3. Description of the Joint Applicants 4

4. The Proposed Transaction 5

4.1. Summary of the Proposed Transaction 5

4.2. Reasons for the Proposed Transaction 6

4.3. Effect of the Proposed Transaction on CalPeco 7

4.4. The Compliance Filings 7

5. Summary of DRA's Protest 8

6. The Settlement Agreement 8

7. Discussion 9

7.1. Section 854(a) 9

7.2. Rule 12.1(d) 12

7.2.1. Reasonable in Light of the Whole Record 12

7.2.2. Consistent with the Law 13

7.2.3. In the Public Interest 13

7.3. Conclusion 14

8. California Environmental Quality Act 14

9. Categorization and Need for Hearing 15

10. Waiver of Comment Period 15

11. Assignment of the Proceeding 15

Findings of Fact 15

Conclusions of Law 15

ORDER 16

Appendix 1: Settlement Agreement 1-1

Appendix 2: Current and Post-Transaction Ownership Structure 2-1

Appendix 3: Regulatory Commitments 3-1

DECISION APPROVING SETTLEMENT AGREEMENT

1. Summary

This decision approves a settlement agreement between the Commission's Division of Ratepayer Advocates and the Joint Applicants consisting of California Pacific Electric Company, LLC (CalPeco), California Pacific Utility Ventures, LLC, Liberty Energy Utilities Co., Algonquin Power & Utilities Corp. (Algonquin), Emera US Holdings Inc., and Emera Incorporated (Emera).

The approved settlement agreement provides the Joint Applicants with authority under California Public Utilities Code Section 854(a) to revise the ownership structure for CalPeco, a regulated electric utility that serves much of the Lake Tahoe area. Currently, Algonquin holds a 50.001% indirect ownership interest in CalPeco, and Emera holds a 49.999% indirect ownership interest. Algonquin will acquire the 49.999% interest held by Emera, resulting in Algonquin having a 100% indirect ownership interest in CalPeco. The approved settlement agreement contains provisions that ensure the revised ownership structure will not harm CalPeco's regulated operations and customers.