4. Discussion

Proposed water utility dispositions are reviewed on the basis of Pub. Util. Code § 851-854 and Pub. Util. Code §§ 2718-2720 (the Public Water System Investment and Consolidation Act of 1997). Sections 851-854 prohibit the sale or transfer of control of a public utility without the advance approval of this Commission. Sections 2718-2720 encourage the acquisition of small water companies by larger, more financially secure entities.

Applicants here have shown that Ramona is in need of substantial capital improvements, and that Great Western has the ability to seek financial resources to accomplish this work. No increase in rates is contemplated as a result of the acquisition, and terms and conditions of service will remain unchanged.

The proposed agreement requires the approval of the Commission. Approval by the California Department of Health Services (DHS) also is required. Great Western proposes to adopt the filed tariffs of Ramona and is bound by any outstanding Commission decisions or directives involving the water system being transferred.

We conclude that the proposed sale and transfer of control of Ramona is reasonable, is in the public interest, and will provide tangible benefits to ratepayers. The parties intended the sale to be consummated as of January 24, 2004, but that could not be accomplished since prior approval of the Commission had not been obtained by that time. We will approve the application and authorize the transfer of ownership as of the date of this decision.