5. The Cal Water-DRA Settlement Should Be Approved

Settlements are required to pass the following three-part test for approval. They must be (1) reasonable in light of the whole record, (2) consistent with law, and (3) in the public interest. We find that the settlement meets each of these three tests. The settlement is amply supported by a wealth of record evidence on each point. The application and DRA testimony addressed each of the contested issues in detail, the ALJ's rulings asked numerous questions about most of the issues the settlement addresses, and the settlement was the subject of extensive briefing. Thus, the settlement is reasonable in light of the whole record.

The settlement is also consistent with law. The settlement does not call for any provision that violates tariff, rule or other law. No party has suggested that the settlement calls for anything that is not consistent with Cal Water's legal obligations.

Finally, for the many reasons we discuss in connection with specific settlement provisions, the settlement is in the public interest. While the increases are significant and the employee additions numerous, we recognize throughout the decision that water companies must upgrade their infrastructure and comply with water quality, supply, and conservation goals in order to function properly in the 21^st century.

Based on the detailed analysis in the foregoing sections of this decision, and the legal elements required of settlements, we find the settlement between Cal Water and DRA should be approved.