ARTICLE 12. SETTLEMENTS

12.1. (Rule 12.1) Proposal of Settlements.

(a) Parties may, by written motion any time after the first prehearing conference and within 30 days after the last day of hearing, propose settlements on the resolution of any material issue of law or fact or on a mutually agreeable outcome to the proceeding. Settlements need not be joined by all parties; however, settlements in applications must be signed by the applicant and, in complaints, by the complainant and defendant.

The motion shall contain a statement of the factual and legal considerations adequate to advise the Commission of the scope of the settlement and of the grounds on which adoption is urged. Resolution shall be limited to the issues in that proceeding and shall not extend to substantive issues which may come before the Commission in other or future proceedings.

When a settlement pertains to a proceeding under a Rate Case Plan or other proceeding in which a comparison exhibit would ordinarily be filed, the motion must be supported by a comparison exhibit indicating the impact of the settlement in relation to the utility's application and, if the participating staff supports the settlement, in relation to the issues staff contested, or would have contested, in a hearing.

(b) Prior to signing any settlement, the settling parties shall convene at least one conference with notice and opportunity to participate provided to all parties for the purpose of discussing settlements in the proceeding. Notice of the date, time, and place shall be served on all parties at least seven (7) days in advance of the conference. Notice of any subsequent settlement conferences may be oral, may occur less than seven days in advance, and may be limited to prior conference attendees and those parties specifically requesting notice.

Attendance at any settlement conference shall be limited to the parties and their representatives.

(c) Settlements should ordinarily not include deadlines for Commission approval; however, in the rare case where delay beyond a certain date would invalidate the basis for the proposal, the timing urgency must be clearly stated and fully justified in the motion.

(d) The Commission will not approve settlements, whether contested or uncontested, unless the settlement is reasonable in light of the whole record, consistent with law, and in the public interest.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.

12.2. (Rule 12.2) Comments.

Parties may file comments contesting all or part of the settlement within 30 days of the date that the motion for adoption of settlement was served.

Comments must specify the portions of the settlement that the party opposes, the legal basis of its opposition, and the factual issues that it contests. If the contesting party asserts that hearing is required by law, the party shall provide appropriate citation and specify the material contested facts that would require a hearing. Any failure by a party to file comments constitutes waiver by that party of all objections to the settlement, including the right to hearing.

Parties may file reply comments within 15 days after the last day for filing comments.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.

12.3. (Rule 12.3) Hearing Where Contested.

If there are no material contested issues of fact, or if the contested issue is one of law, the Commission may decline to set hearing.

If a hearing is set, it will be scheduled as soon after the close of the comment period as reasonably possible. Discovery will be permitted and should be well underway prior to the close of the comment period. Parties to the settlement must provide one or more witnesses to testify concerning the contested issues. Contesting parties may present evidence and testimony on the contested issues.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.

12.4. (Rule 12.4) Rejection of Settlement.

The Commission may reject a proposed settlement whenever it determines that the settlement is not in the public interest. Upon rejection of the settlement, the Commission may take various steps, including the following:

(a) Hold hearings on the underlying issues, in which case the parties to the settlement may either withdraw it or offer it as joint testimony,

(b) Allow the parties time to renegotiate the settlement,

(c) Propose alternative terms to the parties to the settlement which are acceptable to the Commission and allow the parties reasonable time within which to elect to accept such terms or to request other relief.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.

12.5. (Rule 12.5) Adoption Binding, Not Precedential.

Commission adoption of a settlement is binding on all parties to the proceeding in which the settlement is proposed. Unless the Commission expressly provides otherwise, such adoption does not constitute approval of, or precedent regarding, any principle or issue in the proceeding or in any future proceeding.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.

12.6. (Rule 12.6) Confidentiality and Inadmissibility.

No discussion, admission, concession or offer to settle, whether oral or written, made during any negotiation on a settlement shall be subject to discovery, or admissible in any evidentiary hearing against any participant who objects to its admission. Participating parties and their representatives shall hold such discussions, admissions, concessions, and offers to settle confidential and shall not disclose them outside the negotiations without the consent of the parties participating in the negotiations.

If a settlement is not adopted by the Commission, the terms of the proposed settlement is also inadmissible unless their admission is agreed to by all parties joining in the proposal.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.

12.7. (Rule 12.7) Applicability.

Exhibits may be sponsored by two or more parties in a Commission hearing as joint testimony without application of these rules.

   Note: Authority cited: Section 1701, Public Utilities Code. Reference: Section 1701, Public Utilities Code.