|FONTANA - Reduced
rates or refunds could be the result of an investigation that may be
ordered today by the state Public Utilities Commission into the
Fontana Water Co.
"Scrutiny is warranted,'' said
Mayor Mark Nuaimi. "If nothing else, it keeps a bright light
shining over management practices of the Fontana Water Co.''
The possible investigation is the
latest development in two water cases before the PUC, where state
ratepayer advocates and city and school district officials are
fighting a proposed 24 percent rate hike over three years and
appealing a 32 percent increase over three years, now in effect.
The Fontana Water Co. is a division
of the privately owned San Gabriel Valley Water Co. The increase was
requested to cover the company's operating and infrastructure
But opponents say the water-rate
increases are excessive.
The investigation would look into the
water company's revenue requirement, rates, rate base, dividends,
service, facilities and maintenance practices.
The water company is against the
investigation, arguing it is unnecessary because the issues have
been reviewed by the PUC during the hearings on the two rate cases,
according to a letter issued to the PUC from Martin Mattes, an
attorney representing the water company.
"For the commission to open an
(investigation) at this time especially one that envisions
additional hearings would be profoundly disruptive and
inefficient," Mattes said.
The PUC's order for an investigation
would also put the water company on notice that a reduction in rates
and refunds may result.
But the company said it has been on
notice since July 2004, and again during the water-rate case
hearings and the PUC's water division-issued audit report.
The unbinding audit said the water
company owes ratepayers in Fontana and surrounding areas nearly $14
million in company proceeds.
The audit raised some eyebrows, said
Public Works Director Curtis Aaron.
"At least with this
investigation, they might reveal some things that aren't quite
right. But then again, they might show everything else is
fine," he said.
Both the city of Fontana and the
Division of the Office of Ratepayer Advocates support the
"It is fair to say that the
prior and current rate cases, as well as the commission-ordered
audit of San Gabriel (Valley Water's) fi nancial practices regarding
contamination and condemnation funds, reveal a pattern of disturbing
and questionable practices followed by San Gabriel (Valley Water)
over the years in both its Los Angeles and Fontana divisions,"
said Kendall MacVey, representing Fontana in a letter to the PUC.
He said fines and reform of the water
company's practices can be best addressed through an investigation
and so the PUC won't have to revisit practice issues again in future
Meanwhile, the city will explore the
possibility of buying the water company with $1 million that was
allocated last week during the City Council's midyear budget review.
The city is weighing its options on
how best to resolve issues surrounding water rates, Aaron said.
"Do we fight an increase every
three years to keep it as low as possible?" he said, referring
to requests allowed every three years to raise water rates.
The city is looking at all
alternatives, Nuaimi said, "to provide a safe, reliable,
affordable water supply to residents."
But the water company is not for