III. DISCUSSION

In view of the above recitation, and the more detailed information in the Declaration of Gunter Sturm, it is clear that Mineral has repeatedly violated numerous Department citations and has no intention to comply in the future. The current situation is a threat to the health and safety of Mineral's customers. In addition, Mineral's President, Ms. Perkins, has unambiguously stated her intention to continue to flout the Department's authority and citations. Ms. Perkins has also expressed her interest in placing Mineral into receivership. The exhibits to the declaration of Gunther Sturm demonstrate that Respondents have not complied timely numerous Department Orders, when they have complied at all. The only remaining issue is whether, given Respondents' failure to comply with these Department orders, any good cause exists to forgo remedies under § 855.

Ms. Perkins stated refusal to comply with the reasonable requirements and regulations of the Department illustrates that the Commission is not likely to have any greater success in ensuring compliance with its own enforcement orders should it decide to pursue this course of action. Mineral has been afforded every opportunity to comply with Department citations and orders and has failed to do so. The next step is for Mineral to appear in a formal show cause hearing.

Under § 701, this Commission is "empowered to supervise and regulate every public utility in the State and may do all things, whether specifically designated in this part or in addition thereto, which are necessary and convenient in the exercise of such power and jurisdiction." (See also Cal. Constit., Art. 12,

§ 6.) In the case of utilities serving in competitive markets, the Commission can revoke a certificate of public convenience and necessity (CPCN) and require the problematic entity to cease utility operations. However, in the case of a water company, that remedy would leave the innocent captive customers, dependent on water service as a basic need of life, in an untenable situation. Hence, § 855 provides one course of action that this Commission can elect to ensure that basic orders of the Commission are followed and the public convenience and necessity are served.

An order to show cause has been described as "in the nature of a citation to a party to appear at a stated time and place to show cause why the requested relief should not be granted." (Difani v. Riverside County Oil Co. (1927) 201 Cal.210, 213-214; 6 Witkin, Cal Proc. (4th ed. 1997) Proceedings Without Trial, § 55, at 454.) In an order to show cause proceeding, the burden is on the respondent to show good cause why the proposed legal action should not go forward. Here, the action in question is a petition to superior court under § 855 for the appointment of a receiver to assume possession of Mineral's property and to operate its system. A potential receiver, Mineral Co. Water Board, is available in Mineral City (Tehama County) to perform this service. Unless Mineral can show good cause why the Commission should not file such a petition, a hearing should be held at the Commission to initiate the receivership process.

The Declaration of Gunther Sturm illustrates the factual history of the Department's efforts to secure compliance, thereby demonstrating good cause why the Commission should issue a show cause Order against Mineral. Under § 855, Mineral Water Company is entitled to notice and a full hearing in superior court, in which it will receive an opportunity to explain why the allegations set forth in any declaration are insufficient grounds for the court to rely on. Therefore, Mineral Water Company is ordered to appear before this Commission at the date and time set, and show cause why the Commission should not find that it is unable to serve its customers adequately, and petition the superior court of Tehama County under § 855 for Bidwell's failure to comply with the Department's orders as set forth in Mr. Sturm's Declaration.

IT IS ORDERED that:

1. Mineral City Water Company, a corporation, and its President, JoAnn Perkins, are named as Respondents herein, and are hereby afforded an opportunity to show cause before the Commission why the agency should not enter findings that their conduct falls into one or more of the following categories:

a. Mineral City Water Company is unable or unwilling to adequately serve its ratepayers;

b. That Mineral City Water Company has been actually or effectively abandoned by its owners; or

c. That Mineral City Water Company is unresponsive to the rules or orders of the Department of Health Services.

2. The underlying facts in the effort to enforce the various citations noted in Mr. Sturm's attached Declaration are settled. The Respondents have not been responsive to the Department's orders. Thus, this proceeding is limited to the question of whether the Respondents can show that their operational and financial conduct and pattern of non-compliance, separately or taken together, do not fall into one or more of the categories listed in Ordering Paragraph 1, above.

3. The respondents shall appear before the Commission on November 16, 2001 at 10:00 a.m., U.S. Forest Service, Northern California Service Center,

6101 Airport Road, Redding, CA 96002, and show cause as required by this order.

4. This ordering paragraph suffices as the "preliminary scoping memo" required by rule 6 (c) of the Commission's Rules of Practice and Procedure. This proceeding is categorized as a ratesetting proceeding and is set for hearing solely on the order to show cause. This matter is not an enforcement proceeding, as Respondents will not be made subject hereby to fines or other enforcement penalties imposed by the Commission. Its purpose and effect are thus limited to determining whether the next step should be pursued in the statutorily designated court. The issues to be resolved in this proceeding are framed in the preceding ordering paragraphs, and are limited to the question of whether good cause can be shown why the Commission should not petition the superior court under § 855. This order, as to categorization of this proceeding, is appealable under the procedures in Rule 6.4. Any person filing a response to this Order Instituting Investigation shall state in the response any objections to the Order regarding the need for hearings, issues to be considered, or proposed schedule. However, objections must be confined to jurisdictional issues that could nullify any eventual decision on the merits, and not on factual assertions that are the subject of the hearing. The proceeding may be expedited as an emergency matter in order to protect Mineral City's ratepayers.

5. The Executive Director shall cause personal service of this Order to made on Mineral City Water Company either by delivering a copy to JoAnn Perkins or by leaving a copy of the Order during usual office hours in Mineral City's office at 22026 Grove Circle, Red Bluff, CA 96080, with the person who is apparently in charge thereof, and by thereafter mailing a copy of the Order (by first class mail, postage prepaid) to Mineral City Water Company at the place where the copy of the Order was left. Service of the Order in this manner is deemed complete on the 5th day after mailing. This Order will also be mailed to Dennis Albright, Attorney at Law, counsel for Mineral at 715 Madison Street,

P.O. Box 1076, Red Bluff, CA 96080.

This order is effective today.

Dated October 10, 2001, at San Francisco, California.

DECLARATION OF JASON J. ZELLER

1. I am an attorney licensed to practice before the Courts in the State of California, and am an attorney for the California Public Utilities Commission, and have been assigned to coordinate the Commission's response to Mineral City Water Company.

2. I do hereby declare that I have read the Declaration of Gunther Sturm, of the California Department of Health Services, regarding the Mineral City Water Company. I have reason to believe that Mr. Sturm's declaration that details the enforcement activities, fines and other remedial measures that have been ordered by the Department of Health Services against Mineral City Water Company is accurate, and should be relied upon as a correct account of regulatory activities involving the Department and the Mineral City Water Company. Mr. Sturm's Declaration is true and correct to the best of my knowledge.

This declaration should have been attached to the Order to Show Cause that was issued on October 10, 2001, and was inadvertently omitted. It is being served on all parties that were served with the Order to Show Cause.

I declare under penalty of perjury under the laws of the State of California and that the foregoing is true and correct.

Executed this 17th day of October 2001, at San Francisco, California.

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