IV. Settlement Criteria

With Waterbury's concurrence with the proposed settlement, the agreement is properly characterized as an uncontested "all-party" settlement. In such cases, the Commission applies two complimentary standards to evaluate the proposed agreement. The first standard, set forth in Rule 51.1(e) and applicable to both contested and uncontested agreements, requires that the "settlement is reasonable in light of the whole record, consistent with law, and in the public interest." The second standard is articulated in San Diego Gas & Electric, 46 CPUC 2d 538 (1992), and applies to all-party settlements. As a precondition to approving such a settlement, the Commission must be satisfied that:

a. The proposed all-party settlement commands the unanimous sponsorship of all active parties to the proceeding.

b. The sponsoring parties are fairly representative of the affected interests.

c. No settlement term contravenes statutory provisions or prior Commission decisions.

d. Settlement documentation provides the Commission with sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.

The proposed settlement was primarily negotiated between CWS and ORA. Intervenors Cherry Growers and Young were notified of settlement discussions and provided an opportunity to participate. These intervenors subsequently signed the Settlement, Attachment A. Although the Settlement Addendum, Attachment B, was not signed by these intervenors, their consent was unnecessary since this document discusses matters beyond their permitted scope of intervention.

Waterbury had not sought to intervene when negotiations were underway, so she did not have an opportunity to participate in those discussions. After she was allowed to intervene, she did participate in the evidentiary hearing on the proposed settlement. Most of her evidence concerned historic rate treatment of the Oroville District and the general economic conditions of the area; her evidence did not address the specific terms of the proposed settlement. Waterbury indicated her agreement with the proposed settlement although she qualified her endorsement with a preference that the proposed rate reduction be even lower. Importantly, Waterbury did not file written opposition to the proposed settlement or oppose it at the hearing. We interpret Waterbury's statements at the evidentiary hearing to be a generalized effort to improve the Commission's understanding of the ratemaking history in Oroville and the importance of low rates for the declining economy. Given her agreement with the specific settlement, we conclude that we have been presented with an all-party settlement sponsored by all active parties.

The applicant was represented by its officers and counsel in the proceeding. ORA, whose charge is to represent ratepayer interests, was actively involved in all phases of the proceeding. After filing its protests to all four applications, ORA prepared and served reports covering all aspects of CWS's results of operations, cost of capital, and general office for the various districts. ORA representatives attended several of the PPHs. ORA had counsel representing it through extensive negotiations and at the evidentiary hearing. ORA counsel and staff were also responsive to inquiries from individual ratepayers. The intervenors are ratepayers whose interests are allied with ORA. The exhibits proffered by CWS, ORA, and Waterbury all have been admitted into evidence. Thus, the sponsoring parties for the settlement are fairly representative of the affected interests, and they have been active advocates in this proceeding.

The proposed settlement, including the addendum, sets forth the parties' initial positions and final agreement on major issues, supporting tables, and a joint comparison exhibit. Pub. Util. Code § 454 provides that 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 their settlement documents and a joint comparison exhibit, the parties have explained their initial positions and what adjustments have been made to arrive at the summaries of earning and revenue requirements set forth in the settlement. The resulting rates will produce necessary and sufficient revenues for each of the test and attrition years. We find that the rates and the supporting revenue requirements are justified by the parties' showing and are in the interest of ratepayers and the public. Also, as indicated by the following discussion of major settlement provisions, the settlement documentation is sufficient for the Commission to discharge its future regulatory obligations with respect to the parties and their interest.

The proposed settlement satisfies the Commission's requirements for an all-party settlement under Rule 51 and the San Diego Gas & Electric decision. The settlement, as to each of the four districts, is reasonable in consideration of the whole record, consistent with the law, and in the public interest.