ALJ/GEW/hkr Item 2

6/14/2001

Decision PROPOSED DECISION OF ALJ WALKER (Mailed 5/14/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of the Donner Lake Water Company (U 84-W) to issue evidence of indebtedness (Promissory Notes and Loan Agreements) in the approximate amount of $12,000,000 and to grant security interest in its assets for capital expenditures within its Donner Lake Service Area.

Application 00-12-011 (Filed December 11, 2000)

(See Attachment 2 for Appearances.)

OPINION

1. Summary

This order authorizes Donner Lake Water Company (Donner) to borrow sufficient funds to immediately begin emergency repairs required by the California Department of Health Services (DHS) in order to lift a DHS "boil-water" order that has been in place for a year. Our order also authorizes additional borrowing required for Donner to be eligible for a low-interest Safe Drinking Water State Revolving Fund loan to finance a five-year capital improvement plan. We intend that the authorized loans will be assumable by or transferable to the Truckee Donner Public Utility District (Utility District), which is seeking to acquire the water system. We adopt the terms of a proposed settlement between Donner and our Office of Ratepayer Advocates (ORA) requiring that all expenditures from the borrowed funds must be authorized by a representative of the Commission's Water Division as well as by the company. Funds would issue incrementally and only after inspection by DHS of completed work elements. Donner is authorized to impose a surcharge of $27 per month for each of its 1,300 connections to repay this year's portion of its loan.