11. Assignment of Proceeding

Timothy Alan Simon is the assigned Commissioner and Michael J. Galvin is the assigned ALJ in this proceeding.

Findings of Fact

1. Protests to the application were filed by the Sierra Club and The Friends.

2. Notice of the PHC was mailed to Applicants, Sierra Club, and The Friends on July 25, 2007.

3. Notice of the PHC was first published in the Commission's Daily Calendar of July 26, 2007.

4. Neither the Sierra Club nor The Friends appeared at the PHC or accessed the PHC toll free telephonic conference number.

5. Applicants seek authority for MWHP to acquire a 50% indirect control over Valencia through a transfer of half of Lennar's and half of LNR's respective 50% indirect voting interests in Valencia.

6. After the transfer of indirect control is completed, Valencia will continue to be the operating public utility providing water utility service under the Commission's jurisdiction in the areas where it is authorized to do so.

7. The change of control is structured so that customers will not notice the change.

8. Valencia will continue to be a wholly-owned subsidiary of Newhall and will continue to provide its authorized services.

9. Valencia will continue to operate as it has in the past using the same name, operating authority, and existing tariffs.

10. Valencia will continue to possess the technical, managerial, and financial resources necessary to provide its authorized services.

11. No new construction is being proposed in this application.

12. Except for a limited exemption, all applicants agree to abide by the conditions imposed on Lennar and LNR in D.04-01-051 as modified by D.05-08-17.

13. Applicants seek an exemption for all affiliated entities of MacFarlane Partners and WRI, Inc. above MWHP in the ownership chain from Condition 3 set forth in Attachment C to D.05-08-017.

Conclusions of Law

1. This is a ratesetting proceeding and no hearings are necessary.

2. Pursuant to § 854, the Commission has broad authority to approve or deny applications for transfers of utility ownership or control. Implicit in this authority is the right to place reasonable conditions upon the transferor or transferee, should the need for conditions arise.

3. The protests to this application are wholly without merit, as discussed in the foregoing opinion.

4. Section 854 does not apply to the Interim Agreement.

5. A change of control over Valencia has yet to occur.

6. The Commission has complete authority over any and all Valencia service territory expansions (except contiguous).

7. All affiliated transaction rules and conditions imposed on Valencia and its affiliates by D.04-01-051 as modified by D.05-08-017, should continue to apply, except that Condition 3 should apply to all owners, direct and indirect, of Newhall prior to closing of LandSource reorganization and also to MWHP.

8. The requested acquisition and transfer of control is a project that qualifies for an exemption from CEQA pursuant to § 15061(b)(3) of the CEQA Guidelines.

9. This application should be approved and become effective immediately because it is not adverse to the public interest.

10. Approval of this application is not a finding of value of the rights and control being transferred.

IT IS ORDERED that:

1. MW Housing Partners III, L.P. (MWHP) is authorized to acquire a 50% indirect control over Valencia Water Company (Valencia) through a transfer of half of Lennar Corporation and half of LNR Property Corporation's respective 50% indirect voting interests in Valencia to MWHP subject to the conditions set forth in Appendices B and C to this decision.

2. Within 30 days after the change of control authorized herein has taken place, Valencia shall file a compliance advice letter pursuant to General Order 96-B demonstrating its authorized change of control and agreement to comply with the conditions set forth in Appendices B and C to this decision. A copy of that advice letter shall be placed in the formal file of Application 07-02-019.

3. The corporate identification number U-342-W assigned to Valencia shall continue to be used by Valencia in all future filings with the Commission and in the titles of other pleadings filed in existing and future proceedings.

4. The application is granted as set forth above and the authority granted shall expire if not exercised within one year of the effective date of this order.

5. Application 07-02-019 is closed.

This order is effective today.

Dated September 20, 2007 at San Francisco, California.

D0709026 Granting Approval of Indirect Transfer of Control Appendices A-D

Previous PageTop Of PageGo To First Page