8. Conclusion

We find it is in the public interest to approve the application and we do so, subject to the changes negotiated by ORA, Southwest and Avista in their settlement agreement.

The settlement agreement settles all issues between the applicants and ORA and provides significant base rate protection for customers affected by the acquisition. The criteria for settlements are set forth in Rule 51.1(e) of the Rules of Practice and Procedure (Rules), which requires that a settlement be reasonable in light of the whole record, consistent with law, and in the public interest. We conclude that the settlement agreement is consistent with these criteria, and we approve it in the order that follows. The settlement agreement is affixed to and made part of this decision as Attachment A.

In Resolution 176-3139, dated September 23, 2004, the Commission preliminarily categorized this proceeding as ratesetting, and preliminarily determined that hearings would not be necessary. In view of the ORA protest and settlement, a settlement hearing was conducted in order to question parties on settlement terms. We conclude that it is not necessary to alter the preliminary categorization of this proceeding, but we note that a hearing was deemed necessary. Accordingly, the Rules and procedures in Article 2.5 apply fully to this formal proceeding.