CPUC proposes to allow water rate hike (October 22, 2015)

28.7 percent water rate increase is ‘unacceptable,’ Stanton says

APPLE VALLEY — The California Public Utilities Commission has proposed to allow a 28.7 percent rate increase for Apple Valley Ranchos Water customers, Apple Valley town officials announced Wednesday.

The proposed decision could be adopted as early as November, town officials said.

The CPUC’s proposed approval of the rate hike comes amid the town’s ongoing push to purchase Ranchos despite the company’s insistence that it is not for sale. Town officials say they’ve opposed the rate increase since it was announced in 2014, with Ranchos’ initial proposal totaling more than 31 percent over three years.

Apple Valley Mayor Pro Tem Barb Stanton told the Daily Press that Ranchos ratepayers could see significant increases to their water bills no later than January and added that any increase at this point is unacceptable.

To see that (the rate increase) is somewhat lower (than the initial proposal) could be perceived as a victory, Stanton said, but to me it’s a bitter pill to swallow.

Ranchos’ initial request received an interim decision in May when the CPUC voted 5-0 to reject the proposed settlement, adopt interim rates and reopen the record to consider Gov. Jerry Brown’s April 1 executive order on mandatory water conservation.

The CPUC’s latest proposed decision reflects the large reduction in sales associated with Brown’s executive order, according to CEO Chris Schilling of Park Water, Ranchos’ parent company. He said big water users may see noticeably larger bills, but those who meet the state’s conservation goals will not see a significant increase.

A residential customer maintaining consumption at 16.45 hundred cubic feet per month (12,300 gallons) will see their monthly bill increase $18 ($.60/day), Schilling said in a written statement. However, an average residential customer that achieves the conservation goals set by the governor’s executive order will see their [bi-monthly] bill increase 2.64 (percent), equal to $3.41, or roughly 10 cents [sic] a day.

The proposed decision also reflects cost savings and lower production costs, Schilling said, as well as an $8 million capital investment program for system replacement and renewal in 2016.

Meanwhile, Stanton said she sees the decision as another example of the CPUC green-lighting rate increases on the backs of residents.

The cost of water in our town is significantly higher than in any of our neighboring communities, for no other reason than to meet the profit expectations of our private water company’s investors, Stanton said in a written statement on the decision. The fact that the CPUC enables this year after year makes the situation all the more troubling.

Town officials also pointed out that the proposed rate increase comes in addition to the recently imposed drought surcharge placed on some of Ranchos’ customers. The surcharge adds another $2.84 to a customer’s bill for every 100 cubic feet of water used per month above the allocation set by AVR.

Ranchos has previously stated that nearly 75 percent of its customers are not incurring the drought surcharge.

Schilling said the proposed rate increase is the product of open public proceedings that examined and deliberated every aspect and financial detail of the original rate request over the course of the last two years, and cited the town’s involvement as an example of the openness of the proceedings.

The town was an active participant in the nearly two-year rate case process with the CPUC, Schilling said. The town was represented by legal counsel, participated in settlement negotiations and was given the opportunity to present witnesses and conduct cross examinations. The CPUC also conducted public hearings in Apple Valley for Ranchos customers.

Once the decision is finalized, Ranchos will be actively communicating with customers regarding all aspects of the CPUC decision, Schilling said.

Source: Matthew Cabe, Daily Press