Liberty files for another surcharge (April 10, 2016)

CPUC-required filing will add about $1.97 per month to water bills if approved

APPLE VALLEY — Liberty Utilities, Apple Valley last week requested the approval of a 17-cent surcharge from its governing body to recover the combined under-collection that occurred in 2015 due to waterusage changes brought on by the drought and California’s conservation mandate, according to a letter Liberty sent to its customers.

If approved, the 17-cent surcharge would recoup $629,116 over a 12-month period starting April 30, a required annual advice letter filed with the California Public Utilities Commission showed. The letter sent to customers stated that the temporary surcharge would add approximately $1.97 each month to the typical water bill.

The filing comes amid the CPUC’s recent approval of a 43-cent surcharge that will recover nearly $3 million in revenue lost last year prior to the CPUC’s November approval of Liberty’s 2015-2017 rates, an approval that was delayed following Gov. Jerry Brown’s April 1, 2015, executive order mandating a 25-percent reduction in water consumption across the state.

According to Liberty officials, state regulators needed to ensure that projected water use was consistent with Brown’s conservation mandates before approving the new rates because rates are based on how much water customers will use.

Still, General Manager Tony Penna told the Daily Press Monday he’s aware that customer perception of surcharges and rate increases might skew negative.

We are very sensitive to that, Penna said. In our minds it’s not the customer’s fault that it took longer for the state to finish the rate case. This was a unique set of circumstances with regard to conservation and the governor’s mandate … I’m very sensitive to the nickel-and-diming concept. I’m empathetic to it. With that said, (the $3 million in revenue losses) was a lot of money and the state was dealing with a very real, serious (drought) issue.

Liberty Utilities California’s President Greg Sorensen added that the issue goes beyond rates and surcharges.

Tony and his team live and work in the area, he said. They understand the heightened awareness of water rates, and we have to and do evaluate decisions we make to balance the system demands and needs and the cost of those (demands and needs) with what ultimately the customers will be paying for the cost of service. We have to ensure we’re doing that as efficiently as possible.

Meanwhile, the nickel-and-diming concept isn’t lost on Apple Valley either. The Town Council and other officials have on numerous occasions used the approved rate increases and various surcharges to rally support of acquisition of Liberty’s water system.

It’s unfortunate that the ratepayers are drowning under this barrage of ‘minimal’ increases, Town Manager Frank Robinson said in response to the possible 17-cent surcharge. We have asked Liberty Utilities to provide the work papers that justify this request, and until we have those we are not able to comment on the merits of the request or whether we will file a protest.

The CPUC’s Office of Ratepayer Advocates confirmed Tuesday it will not file a protest, according to Program Manager Danilo Sanchez, who told the Daily Press Liberty’s request is essentially an attempt to make the company whole. The calculations aren’t controversial, Sanchez told the Daily Press. There’s no reason to protest. They’re allowed to recover that difference … up to the amount they were authorized.

Liberty officials said as much in the letter to customers, stating that the surcharge of approximately one penny for every 44 gallons used will be implemented to balance finances for 2015.

Sorensen noted that Liberty can collect nothing more and nothing less than what we are authorized to do. That’s with a third-party overseer looking at everything we do.

Concerning the surcharge’s April 30 start date, Penna said it’s tentative and was requested based on Liberty’s expectation to receive approval for the request within that time frame.

We should know more in about two weeks, he said, after CPUC staff has reviewed the advice letter filing.

Source: Matt Cabe, Daily Press