Water Industry News

Judge says Fontana ratepayers deserve money from water company

By Shel Segal

The judge overseeing the California Public Utilities Commission water rate dispute hearings between the city of Fontana and the Fontana Unified School District and San Gabriel Valley Water Company, the parent company of Fontana Water Company, has expressed his intended ruling that some of the company's profits should be returned to the ratepayers.

The judge's preliminary decision stems from profits made by the company -- about $13.9 million -- in sale of property known as "gain on sale," and in the cleanup of contaminated water.

The judge has ruled that 75 percent of that money should be returned to ratepayers while the company keeps the remainder.

"That's huge," said Fontana Mayor Mark Nuaimi, who has been leading the city's battle against the water company. "That translates directly into rate reductions and it has to be done retroactively. That's where ratepayers may see monetary benefits in the form of a credit."

Ken MacVay, an attorney for Riverside-based Best, Best and Krieger which is representing the city, agreed.

"It's a great outcome," MacVay said. "We're still asking if there should be more money returned to the ratepayers, but it's something. That's money the company has treated as its own and the judge has indicated it belongs to ratepayers."

A final ruling is expected in March or April, MacVay said.

The water rate dispute started when the San Gabriel Valley Water Company asked for a 77 percent increase and received a 33 percent hike a few years ago by the CPUC, even though the commission said the company failed to meet its burden of proof to justify a rate increase.

The city and school district have been fighting the increase ever since, with a recent audit saying not just was an increase not warranted, but there should be a refund to customers of around $28 million.

Since then, the water company has asked for an additional 24 percent increase on top of the original 33 percent to be rolled in during the next three years. The commission has yet to decide on that request.