11. Comments on Proposed Decision

In Resolution ALJ 176-3053 dated December 21, 2000, the Commission preliminarily categorized this application as ratesetting, and preliminarily determined that hearings were not necessary. One protest was received and a hearing was deemed necessary. Our order today makes that change in Resolution ALJ 176-3053.

The proposed decision in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(d) and Rule 77.1 of the Commission's Rules of Practice and Procedure. Comments on the proposed decision were received on ______________, 2001.

The authorization herein given is for the purpose of this proceeding only and is not to be construed as indicative of amounts to be included in proceedings for the determination of just and reasonable rates.

We place Del Oro on notice that the reasonableness of any resulting interest rate and cost of money arising from debt capital are normally subject to review in general rate case proceedings.

Findings of Fact

1. Del Oro, a California corporation, operates as a water utility subject to the jurisdiction of this Commission.

2. Del Oro needs external funds for the purposes set forth in the application.

3. The execution and issuance of a debt instrument brought about by the refinancing would not be adverse to the public interest.

4. Short-term debt transactions are governed by Pub. Util. Code § 823.

5. The Commission does not by this decision determine that Del Oro's construction budget, cash requirements forecast and capital ratios are necessary or reasonable for ratemaking purposes.

6. Authorizing Del Oro to encumber its properties as security for its debt is not adverse to the public interest.

7. Notice of the filing of the application appeared on the Commission's Daily Calendar of December 20, 2000 and the amended application on December 29, 2000.

8. One protest to the application was received on January 11, 2001.

Conclusions of Law

1. A public hearing on the protest is necessary; hearing was held on April 12, 2001.

2. Del Oro's testimony and response rebutted the underlying assumptions of the protest.

3. Protestant has failed to show that the application should be denied.

4. The proposed revolving line of credit and debt financing are for lawful purposes, and the money, property, or labor to be obtained is required for these purposes. Proceeds from the debt issues may not be charged to operating expense or income.

5. The reasonableness of any resulting interest rate and cost of money arising from debt capital are normally subject to review in general rate case proceedings.

6. Del Oro should pay the fee determined in accordance with Pub. Util. Code § 1904(b).

7. The application should be granted, effective immediately, to the extent set forth in the order which follows.

ORDER

IT IS ORDERED that:

1. Del Oro Water Company (Del Oro), on or after the effective date of this order, is authorized to do the following upon terms and conditions substantially consistent with those set forth or contemplated by Application 00-12-019 and the Amended Application (collectively, Application):

a. establish a revolving line of credit in the amount of $100,000;

b. refinance an estimated $2,405,205 in existing debt;

c. secure a loan for capital improvements in its Paradise Pines District for approximately $1,000,000; and

d. transact all of the above financing requirements with Imperial Bank or another lending institution.

2. Del Oro may execute and deliver any or all related documents required for completion of the financing transactions and may encumber its assets in connection with the loan facilities upon terms and conditions substantially consistent with those set forth in the Application.

3. Del Oro shall file with the Water Division copies of the loan agreements within 15 days of execution.

4. Del Oro shall apply the proceeds of the financing transactions for the purposes set forth in the Application.

5. On or before the 25th day of each month, Del Oro shall file with the Water Division the reports required by General Order Series 24.

6. The authority granted by this order shall become effective when Del Oro pays $2,788, the fee set forth by Pub. Util. Code § 1904(b).

7. The application is granted as set forth above.

8. Resolution ALJ 176-3053 is amended to show that a hearing in this matter was required.

9. Application 00-12-019 is closed.

This order is effective today.

Dated , at San Francisco, California.