Settlement Agreement

In mid-January, 2006, the parties began conducting settlement discussions. On January 18, 2006, the parties submitted a Joint Statement of Material Facts to be Adjudicated at Hearing (Joint Statement). On January 19, 2006, the parties reached a verbal agreement settling all revenue requirement issues, and so informed the ALJ during a telephone conference held that day. On January 20, 2006, the parties reached a verbal agreement on marginal cost, revenue allocation and rate design issues, thus effectively settling all issues in the proceeding.

On January 23, 2006, the parties submitted a draft settlement agreement to the ALJ summarizing the resolution of all the issues in the case. On January 24, 2006, a brief hearing was held on the draft settlement agreement, at which the ALJ asked clarifying questions about various provisions.⁸

On February 3, 2006, pursuant to Rule 51 of the Commission's Rules of Practice and Procedure, Sierra submitted a joint motion on behalf of all parties to accept the Settlement Agreement. In their joint motion, the parties assert that the Settlement Agreement should be approved by the Commission because it is reasonable in light of the whole record, consistent with law, and in the public interest, and thus satisfies the requirements for settlements set forth in Rule 51.1(e).

⁸ The version of the settlement agreement used by the ALJ in asking his questions was admitted into evidence as Exhibit 18.