IV. Settlement Criteria

With CWS and ORA in agreement, the settlement is properly characterized as an uncontested "all-party" settlement sponsored by all active parties. In such cases, the Commission applies two complementary 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:

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

The sponsoring parties are fairly representative of the affected interests.

No settlement term contravenes statutory provisions or prior Commission decisions.

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 applicant was represented by its officers and counsel in the proceeding. ORA, whose charge is to represent ratepayer interests, protested both 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 exhibits proffered by CWS and ORA 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 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. At the same time, the settlement substantially tempers the large rate increases initially sought by CWS, which indicates that the settlement is responsive to public concerns stated at the PPHs. 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.