STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

June 29, 2001

TO: PARTIES OF RECORD IN APPLICATION 01-02-026

This is the proposed decision of Administrative Law Judge (ALJ) Rosenthal, previously designated as the principal hearing officer in this proceeding. It will be on the Commission's agenda at the next regular meeting, which is scheduled for August 2, 2001. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Pursuant to Resolution ALJ-180 a Ratesetting Deliberative Meeting to consider this matter may be held upon the request of any Commissioner. If that occurs, the Commission will prepare and mail an agenda for the Ratesetting Deliberative Meeting 10 days before hand, and will advise the parties of this fact, and of the related ex parte communications prohibition period.

The Commission may act at the regular meeting on August 2, 2001, or it may postpone action until later. If action is postponed, the Commission will announce whether and when there will be a further prohibition on communications.

When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the proposed decision as provided in Article 19, attached, of the Commission's "Rules of Practice and Procedure." Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LTC: eap

ALJ/SHL/eap DRAFT Item 1

8/2/2001

Decision PROPOSED DECISION OF ALJ ROSENTHAL (Mailed 6/29/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Catalina Red & White Cruises, Inc., a California corporation for a certificate of public convenience and necessity to operate as a vessel common carrier between Long Beach and Los Angeles (San Pedro), California on the one hand and all points and places on Santa Catalina Island on the other hand, and between all points and places at and within three miles of Santa Catalina Island; request for interim operating authority.

Application 01-02-026 (Filed February 16, 2001)

Wesley Skow and Patricia Guerrero, Attorneys at Law,
for Catalina Red & White Cruises, Inc., applicant.

Pamela Albers, Attorney at Law, for City of Avalon,
intervenor.

William H. Carder and Phillip C. Monrad, Attorneys at Law,
and Peter B. Olney and Stefan Mueller-Dombois,
for protestant.

OPINION GRANTING INTERIM CERTIFICATE

Summary

An interim certificate of public convenience and necessity (CPCN) is granted to Catalina Classic Cruises, Inc. (Applicant) to operate scheduled service between the City of Avalon and the Cities of Long Beach and San Pedro.