State auditor to survey water prices in the area (August 14, 2014)

APPLE VALLEY — The State Auditor will conduct an audit of water rates in and around the town in an effort to identify the reasons for escalating water costs.

The action was requested by state Sen. Steve Knight, R-Lancaster, through the Joint Legislative Audit Committee, which approved the survey request in a Thursday afternoon session.

Knight’s request was prompted by Apple Valley residents’ concerns and frustrations with Apple Valley Ranchos Water Co.’s general rate case application, his letter to the committee said. The company seeks an increase of about 30 percent over the next three years.

The audit will survey Apple Valley Ranchos, the system of Golden State Water Co. also serving parts of Apple Valley, and the city water departments of Hesperia and Victorville.

Residents of Apple Valley are subject to disproportionately higher water rates in comparison to residents of the surrounding communities, Town Manager Frank Robinson said. An objective review of how rates are established is overdue.

The town is contesting AVR’s rate case for 2015-17 now before the California Public Utilities Commission. Hundreds of Apple Valley Ranchos water customers attended two CPUC public hearings on April 30, principally to air their objections.

Officials of Apple Valley Ranchos expressed support for the audit process and requested that it include a review of compliance with state and federal drinking water standards.

It is important that our customers have confidence that the price of water service is established in a fair and reasonable fashion, said Chris Schilling, CEO of Park Water Co., AVR’s owner. Equally important is that customers expect the water they drink is safe and that adequate investments are being made to ensure reliable operations now and into the future.

Schilling said rate hikes have averaged 3 percent a year since 2003.

He said some of the information in Knight’s letter to the commission seems to be based on the town’s calculations, with which he disagrees.

AVR serves about 19,500 in the town and adjacent unincorporated areas, and Golden State serves about 2,900 customers, the State Auditor said in an analysis of the committee’s request.

It is uncertain when the audit will begin or end, Knight’s Chief of Staff David Orosco said, but results will be submitted to the audit committee upon completion. A similar audit was recently conducted in the Antelope Valley, he said.

Hesperia spokeswoman Rachel Molina said her city has no objections to participating in the water-rate audit.

Spokesmen for Golden State Water and the Victorville Water District did not immediately respond to requests for comment on the audit.

Source: Gary Brodeur, Daily Press