III. Discussion

The history of this consolidated proceeding, including the recent letter from Brit Smith, gives us no reason to change our earlier finding that Grand Oaks' owners of record are "unwilling or unable to operate the system." The order to show cause commencing our investigation contemplated imposition of fines on the owners, but sanctions would serve little purpose at this point. One of the named individual respondents has died, and the other (Brit O. Smith), while disavowing any knowledge of or involvement with Grand Oaks, has pledged to cooperate if the Commission needs "more information or help to get [Grand Oaks'] ownership cleared up." Our primary task at this point is to ensure that qualified and responsible ownership takes charge of Grand Oaks as soon as reasonably possible.

We acknowledge and express our appreciation for Dominguez and CWS stepping in to operate Grand Oaks. Since our emergency order in D.97-08-067, complaints about the water system have stopped, although we understand there is still a moratorium on new hookups that causes concerns. More fundamentally, we want to see an end to the "emergency" that has now persisted almost eight years. Even if current operations are satisfactory, with the passage of time, a water utility will need to borrow or invest funds to replace or upgrade its system. Day-to-day operation and maintenance of the system, while clearly necessary, do not encompass these long-term objectives.

CWS' status report is somewhat disappointing. CWS is silent on whether it has encountered impediments in dealing with the surviving owner or the deceased owner's estate. Neither Dominguez nor CWS filed an application to acquire Grand Oaks, as contemplated by D.97-08-067, nor did either of them petition to modify that decision. CWS is silent on these omissions, although the Commission decisions CWS criticizes came two or more years after D.97-08-067, and therefore cannot explain why the acquisition did not occur. In short, CWS through its merger with Dominguez has certain responsibilities under D.97-08-067 that it has not yet discharged.

Apart from these observations regarding the status report, we welcome CWS' proposal for a regulatory mechanism under which it would be willing to acquire Grand Oaks. The next step is an application by CWS. The application would ensure that we fully understand the proposed regulatory mechanism and would provide opportunity for input from Grand Oaks' ratepayers. Finally, the application would resolve the murky situation characterizing the current ownership of Grand Oaks.³ We will direct CWS to file this application within 90 days from the effective date of today's decision, and to continue operating Grand Oaks pending further order. Upon the filing of that application, these consolidated dockets (Case 97-01-003 and Investigation 07-06-037) will be closed.