Past Operations

7. Casmite has violated Public Utilities Code Section 1001 by operating a water utility since 1994 without a CPCN.

8. Unocal has violated Public Utilities Code Section 2111 by aiding and abetting Casmite since 1994 in its operation of a water utility without a CPCN, as required of Casmite by Public Utilities Code Section 1001.

9. Both Casmite's and Unocal's conduct warrants the imposition of sanctions that could be imposed on a daily basic for the continuous ten-year period that the water system operated without a CPCN.

10. As an alternative sanction to a direct monetary assessment, Casmite's rate of return should be adjusted downward to (a) mitigate rate shock during a transitional period, and (b) provide only the lower threshold of what constitutes a reasonable rate of return. Additionally, Casmite should be denied the full addition of the water main replacement project (installed in 2004 at the cost of $70,000) to the utility's rate base. Only one-half of that cost ($35,000) should be authorized for inclusion in the rate base.

11. For violation of Public Utilities Code Section 2111, a penalty of $1.8 million should be assessed against Unocal, calculated at $500 per day for the ten-year period it aided and abetted Casmite in the operation of a water utility without a CPCN. The imposition of a specific monetary sanction against Unocal should be stayed on the condition that Unocal unconditionally foregoes any and all claims, preceding the effective date of this decision, for the reimbursement of loans or advances to Casmite.