4. DWR's April 17, 2003 Memorandum

On April 17, 2003, DWR submitted a memorandum requesting that the Commission consider two modifications to D.03-04-029 and the Operating Agreements. Procedurally, DWR's April 17, 2003, memorandum will be treated as a Petition for Modification of D.03-04-029.

In its Petition, DWR requests that the Commission modify two sections of the Operating Agreements to clarify that the Commission does not exercise jurisdiction over DWR and that certain commercial disputes that are not Commission jurisdictional may be resolved before a court of law or other appropriate forum.

DWR requests that the Commission modify Section 2.02 of the Operating Agreement, to add the following language:

"In addition, the Parties acknowledge that DWR is not subject to the Commission's jurisdiction, and the Parties agree that none of the provisions of this Agreement, including Section 13.04 herein, shall be interpreted to subject DWR to the Commission's jurisdiction or authority."

DWR also requests that the Commission revise Section 13.04, to provide:

"If the Parties are unable to resolve such dispute within 30 days from the date that a detailed summary of such dispute is presented in writing to the other Party, and the dispute related solely to Utility's conduct, performance, acts and/or omissions (and not to DWR's conduct performance, acts and/or omissions), then DWR may at its sole discretion, present the dispute to the Commission for resolution, in accordance with Applicable Law. All other disputes shall be brought in a court of competent jurisdiction or a forum mutually acceptable to the parties in accordance with Applicable Law. Nothing herein shall preclude either party from challenging the decision or action which such Party deems may adversely affect its interests in any appropriate forum of the Party's choosing."

DWR represents that PG&E and SDG&E do not object to DWR's requested modifications. In their April 17, 2003 Joint Petition, PG&E and SDG&E state that they have "reviewed a proposed change DWR has indicated it will request to the Operating Agreement..." and "will not object to incorporating [DWR's proposed changes] into their respective Operating Agreements."² No party filed a response to DWR's memorandum.

We have reviewed DWR's requested modifications and find that the modifications would provide additional clarity to the Operating Agreements. In addition, the modifications appear to be agreed to by all parties to the Operating Agreements. No party opposes the modifications. DWR's Petition is granted.