California Code, Public Utilities Code - PUC § 1006.5

The commission may, after notice and hearing, prior to authorizing any water or sewer system corporation having annual gross operating revenues under two hundred thousand dollars ($200,000) to construct, operate, acquire, expand, or improve its line, plant, or system, prescribe, as a condition to granting such authority, that the corporation file with the commission a bond with sufficient sureties, subject to approval of the commission, in a reasonable amount not exceeding fifty thousand dollars ($50,000) payable to the commission and conditioned on the corporation's furnishing adequate and sufficient service within its service area.  The commission may, after notice and hearing, declare all or any part of the bond forfeited after finding that the corporation has willfully failed to furnish adequate and sufficient service without just cause or excuse and that such failure has continued for an unreasonable duration.  Such bond shall further provide for payment to the commission of the amount of any penalty assessed against the corporation pursuant to Section 2107.  The commission may, upon petition by a water or sewer system corporation, for good cause, reduce the amount or eliminate the requirement of any bond which it has required to be filed pursuant to this section.