V. Evaluation of the Joint Recommendation

Under the standard set forth in Rule 51.1(e) of our Rules of Practice and Procedure, the Commission reviews settlement agreements to ensure that they are reasonable in light of the record, consistent with the law, and in the public interest. (D.00-02-048.) We approve this settlement agreement with the exception of the proposed LIRA tariff.

The parties to the settlement agreement are Valencia and ORA, two of the three active parties to this proceeding. The other active party, Sierra Club, has presented challenges to several components of the settlement. As a result of these challenges, Valencia was required to better explain and support several components of the settlement agreement. As a result, the record for this proceeding has been substantially improved. As set out above, we have carefully evaluated the issues raised by Sierra Club and determined, based on the additional information, that the settlement agreement meets out standards. The settlement agreement resolves all issues in this proceeding and the parties entered into it after having reviewed all direct and rebuttal testimony. The recommendations are the result of significant negotiation and compromise of the parties thereto on issues substantially affecting their interests and constituents, and the parties agree that this is a fair resolution of their differences. As noted above, the settlement agreement adopts ORA's original position on many controversial issues. Overall, the settlement agreement results in a considerably lower rate increase than initially proposed by Valencia, and ORA is satisfied with this outcome. Finally, the settlement agreement is not procedurally flawed, is not contrary to law or Commission policy, and is a reasonable compromise of the dispute between Valencia and ORA. We conclude, therefore, that with one exception the settlement agreement is reasonable in light of the whole record, consistent with the law, and in the public interest. As discussed above, we reach a different conclusion with regard to the LIRA tariff, and we reject the settlement agreement solely in that regard.