ALJ/VDR/epg DRAFT Item 4

12/21/2000

Decision  PROPOSED DECISION OF ALJ RYERSON  (Mailed 11/21/2000)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Investigation on the Commission's own motion into the operations, practices, rates and charges of the Hillview Water Company, Inc., a corporation, and Roger L. Forrester, the principal shareholder and president,

Respondents.

Investigation 97-07-018 (Filed July 16, 1997)

David Ebershoff, Attorney at Law, for Hillview Water Company, Inc., and Roger L. Forrester, respondents.

Jane Cavin, for Richard T. and Jane Cavin; Dan Devor, Duane Butch Carpenter, for Department of Justice, Bureau of Investigation, Steven D. Wells, for Longs Drugs, Edwin Butterworth, James R. Hauer, and John Minich, for themselves; interested parties.

Peter G. Fairchild, Legal Division, and
Daniel R. Paige, Water Division Ratepayer
Representation Branch, for Water Division.

TABLE OF CONTENTS
Title	Page

INTERIM OPINION ON PROPOSED SETTLEMENT 2

I. Summary 2

II. Background and Procedural History 2

III. The 1997 Report 6

IV. The Motion for Adoption of the Settlement 9

V. Terms of the Proposed Settlement 11

VI. Petition for Modification 13

VII. Discussion 13

A. Commission Criteria and Procedures for Adopting a Settlement 13

B. The Settlement is rejected, because the Settling Parties
have not satisfied their burden, procedurally or substantively 14

1. The Settling Parties did not support the Motion by
providing prepared testimony, as required 15

2. The Settling Parties did not provide an adequate
statement of the grounds upon which adoption is urged 17

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. 18

a) The Settlement is not shown to be reasonable
in light of the whole record 18

b) The Settling Parties have not Shown that the
Settlement Is Consistent With Law 23

c) The Settling Parties have not shown that Settlement
Is In the Public Interest 24

C. The Settlement Does Not Satisfy the Requirements
for Adoption of An All-Party Settlement 26

1. Not All of the Active Parties Sponsor the Settlement 26

2. The Sponsoring Parties Do Not Fairly Reflect
the Affected Interests 27

3. The Settlement Conveys Insufficient Information to
Permit Us to Discharge Our Future Regulatory Obligations
With Respect to the Parties and Their Interests 27

D. Hillview's Petition to Modify the OII is Denied 29

VIII. Conclusion 30

IX. Comments on Proposed Decision 30

Findings of Fact 30

Conclusions of Law 32

ORDER 33

INTERIM OPINION ON PROPOSED SETTLEMENT

I. Summary

This interim decision addresses the Motion for Adoption of Settlement (Motion) jointly filed on November 22, 1999, by the Ratepayer Representation Branch (RRB) of the Water Division (WD), and Hillview Water Company, Inc. (Hillview), one of the respondents in this investigation. The Motion asks us to adopt a written settlement agreement (Settlement), executed as of the same date by RRB and Hillview, as "a complete resolution of all issues in the present proceeding." The Motion is denied.

We also address Hillview's Petition to Modify Order (Petition), filed September 20, 2000, which asks us to modify our Order Instituting Investigation (OII), the order that initiated this proceeding. Hillview asks us to delete from the OII a requirement that any proposals to increase rates or charges submitted to us on behalf of Hillview be consolidated with this enforcement proceeding for consideration. The Petition is denied.