March 22, 2013
Tim Dewar, email@example.com
Ratepayers with Golden State Water Company (GSWC) are one step closer to learning whether they will be charged more or less for water they have already used in 2013 and the new rates they will pay over the next two and a half years.
Administrative Law Judge Richard Smith released a proposed settlement ruling Tuesday that, among other things, sets GSWC’s rates through 2015. Since Jan. 1, Ojai water customers have been paying interim rates pending this decision.
The proposed agreement also includes a provision requiring GSWC to conduct customer service satisfaction and affordability surveys. The agreement must now go to the California Public Utilities Commission for a final ruling. A decision is not expected before April.
If the CPUC adopts the agreement, rates will go up for some in Ojai, but some low-volume users will end up paying less in 2013. Either way, ratepayers will see an adjustment in a future bill to make up the difference.
Residential customers with a five-eights-inch meter who use 1,2oo cubic feet* of water per month are paying $73.41 for water at present rates. That would go down under the agreement to $70.59, a savings of $2.82. These numbers are only for water used and do not include other charges such as the meter charge or CPUC funding fee.
Those using 2,500 cubic feet* of water per month are paying $124.19 at present and will pay $126.38, or $2.19 more, while those using 4,000 cubic feet* are paying $188.46 and would pay $201.18 under the agreement.
In Ojai, the tier 1 cutoff for residential customers will increase from 500 to 1,200 cubic feet* per monthly billing cycle and tier 2 levels will include amounts from 1,400 cubic feet to 2,500 cubic feet.* This change will also help some low-volume users save.
In its July 21, 2011 rate change request, GSWC sought to increase rates systemwide by $58,053,200 or 21.4 percent in 2013. This decision, however, would authorize GSWC to collect $314.6 million — a 16 percent increase over the 2013 interim rates — from its ratepayers statewide.
For 2014, GSWC received the $8,926,200, 2.7 percent increase over the 2013 rates it requested. The $10,819,600, 3.2 percent increase GSWC requested for 2015 was cut to a 1.8 percent increase over the 2014 rates in the agreement.
Adjusted rates will take effect Jan. 1 in both 2014 and 2015.
While the 2013 rates will likely go down for the average residential tier one customer in Ojai, similar ratepayers in other GSWC service areas aren’t as lucky. Simi Valley ratepayers will likely see a 26 percent jump in their bills and Los Osos and Arden Cordova customers can count on an 18.7 and 18.6 increase respectively.
Public participation hearings were held by the CPUC in November and December 2011 and in February and March 2012. Ojai’s hearing was held Feb. 27, 2012.
Protests to the application were filed by the town of Apple Valley, the cities of Claremont, Ojai, San Dimas and the Division of Ratepayer Advocates (DRA).
According to the decision, more than 2,100 attended the hearings and more than 450 individuals, including many state, county and local officials, spoke. Most opposed the application and none supported it, the decision explained. Almost half of those who spoke complained that, after several rate increases in recent years, Golden State’s rates were no longer reasonable or affordable.
Smith’s decision also said the CPUC received thousands of letters and emails from GSWC customers, and written communications from many public officials concerning the application. None supported the application.
DRA raised concerns about the relatively high number of customer complaints in Ojai, and recommended that Golden State improve Ojai’s customer service. DRA recommended that the CPUC reduce Ojai rates in the next GRC if Golden State’s customer service in Ojai did not improve.
Due, in part, to the number of complaints, the settlement requires GSWC to implement a customer satisfaction survey program locally, and to consider an affordability study that may be included in the next rate case.
GSWC will have to analyze customer contact investigation reports to identify ongoing customer issues, identify measures to improve customer service and provide progress reports to the CPUC every six months. In addition, GSWC must analyze field investigation reports of customer contacts for the years 2010, 2011, and 2012 to identify any other potential customer issues, submit a report to the CPUC, DRA and The Utility Reform Network on the proposed customer service improvement measures by Nov. 1, 2013, and provide the CPUC annual updates on the status of implementing the customer service improvement measures.
The estimated $50,000 annual cost for the customer survey program will be split equally by GSWC ratepayers and shareholders.
DRA recommended that Golden State also be required to conduct an affordability study to provide information in the next general rate case about the company’s rates relative to other water companies and to help evaluate the adequacy of Golden State’s low income programs.
DRA also wanted the cost of this study to be shared equally between GSWC’s shareholders and ratepayers, however, GSWC countered that the cost of the study should be recovered from ratepayers only, not from its shareholders.
GSWC and DRA must meet prior to the next rate case hearing, scheduled for July 2014, to discuss the preparation of the affordability study. If no agreement can be reached as to the scope or cost of the study, GSWC will not be required to include the study in the next rate case.
“With respect to the administrative law judge’s proposed decision, we are currently reviewing the 272-page document to ensure the proposed decision accurately reflects the settlement agreement,” explained GSWC’s Senior Vice President for Regulated Utilities Denise L. Kruger. “The Commission has yet to act on the proposed decision, and it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision.”
* This story was changed April 27 at 2:35 p.m. to indicate that usage amounts should have been given as hundred cubic feet.