VIII. Conclusion

Our order today paves the way for promptly concluding this proceeding. We deny the motion to adopt the Settlement, as that document falls short of satisfying our standards for approval. The nature of this proceeding requires full exposition of the facts in order to ensure a fair and comprehensive outcome, and to determine whether a rate increase would be justified.

IX. Comments on Proposed Decision

The draft decision of the ALJ Victor Ryerson in this matter was mailed to the parties in accordance with Pub. Util. Code Section 311(d) and Rule 77.1 of the Rules and Practice and Procedure. Comments were filed on ________________, and reply comments were filed on _________________.

Findings of Fact

1. The Motion for Adoption of Settlement is signed on behalf of RRB and Hillview only.

2. The Settlement is signed on behalf of RRB and Hillview only.

3. The Motion is opposed by several interested parties.

4. Timely comments contesting the Settlement were filed on behalf of several interested parties.

5. Objections to adoption of the Settlement were received from numerous Hillview customers who are not parties.

6. The moving parties filed no prepared testimony in response to the ALJ Ruling dated April 25, 2000, in this proceeding.

7. There is no adequate showing in the record that the Settlement is reasonable in light of the whole record, and certain features of the Settlement are unreasonable.

8. The procedure for refunding wrongfully collected supply and service charges under the terms of the Settlement is not complete and comprehensive.

9. There is, as a matter of fact, no showing in the record that the Settlement is consistent with law.

10. There is no adequate showing in the record that the Settlement is in the public interest, and various features of the Settlement are contrary to the public interest.

11. The Settlement is not sponsored by Forrester, a respondent who has actively participated in this proceeding.

12. The Settlement is not sponsored by Cavin and Devor, both of whom are active parties.

13. The parties who sponsor the Settlement do not fairly reflect all the affected interests, most notably ratepayers. For example, some customers who are legitimately entitled to refunds are overlooked in the refund procedure.

14. The parties who sponsor the Settlement do not fairly reflect the public interest, because the Settlement lacks any provision for imposing fines or other sanctions against either respondent, despite uncontradicted evidence in the record of conduct by both respondents which violate statutes we administer, and Commission rules, regulations and orders, and despite specific recommendations by LWB in the 1997 Report.

15. The parties who sponsor the Settlement have made no showing that the Settlement does not contravene statutory provisions or prior Commission decisions, despite the inclusion of a refund procedure that has a potentially discriminatory effect upon customers who are entitled to refunds.

16. The Settlement does not convey sufficient information to enable us to discharge our future regulatory obligation to administer the payment of refunds to customers, and to ensure that Hillview's rates are based upon an appropriate rate base and other factors.

17. The Settlement does not convey sufficient information about alleged violations by the respondents to enable us to conduct a second phase of this proceeding as contemplated by the OII, or to make a determination whether such a second phase is required.

18. If Hillview's Petition were granted, there would be problems with coordination of related proceedings that do not now exist.

19. This decision should be made effective immediately because of the urgent need to resolve issues posed in the OII.

Conclusions of Law

1. The settling parties did not satisfy the procedural requirements for supporting their motion under Rule 51.6(a) and the Ruling dated April 25, 2000, in this proceeding.

2. The settling parties did not provide an adequate statement of the grounds upon which adoption of the Settlement is urged.

3. The settling parties have not shown that the Settlement is reasonable in light of the whole record, consistent with law, and in the public interest.

4. Hillview's Petition should be denied.

ORDER

IT IS ORDERED that:

1. The Motion to Adopt Settlement filed by Hillview Water Company, Inc., and the Ratepayer Representation Branch of the Commission's Water Division is denied.

2. The Petition to Modify Order filed by Hillview Water Company, Inc., is denied.

3. The assigned ALJ in this proceeding shall, by written ruling, promptly establish a procedure for bringing this investigation to an orderly conclusion, including scheduling a formal evidentiary hearing in Oakhurst at the earliest possible time. If necessary to ensure that water service and quality are maintained, an interim decision shall be issued to address Hillview Water Company, Inc.'s pending request for a general rate increase and other adjustments.

This order is effective today.

Dated    , at San Francisco, California.

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