Water Industry News

California Public Utilities Commission declines 50% rate increase for Felton

November 12, 2006

The California PUC declined this week to approve a 50 percent water rate hike for California American Water customers in Felton, instead ordering more discussion on the increase Nov. 30.

The reason?

"At the meeting we heard from a number of consumers, and subsequently the commissioners decided to hold the issue over to our November 30th meeting for further consideration," wrote Terrie Prosper, press secretary for the state PUC, in an e-mail to the Sentinel Friday.

A dozen FLOW members attended the PUC meeting, and eight spoke before the commissioners, said Jim Graham, a member of Felton Friends of Locally Owned Water, a grassroots group that has led an effort for a community buyout of the Felton water system in a quest for local control.

It's not the first time FLOW has made its voice heard before the PUC, said Graham, but "I think difference this time was that everyone said they were getting frustrated, and they didn't mince words about the frustration."

The PUC is responsible for ensuring that customers have safe, reliable utility service at reasonable rates, protecting against fraud and promoting the health of California's economy.

Cal Am requested in February 2005 a 114 percent increase in rates over a three-year period. Rate increases must be approved by the PUC.

Judge Christine Walwyn recommended in October that a surcharge be retroactive to Jan. 1, but proposed capping the hike at 50 percent for the first 12 months to alleviate "rate shock."

Some of Cal Am's expenses were "unjustified and inflated," said Jim Mosher, a spokesman for FLOW.

Water bills for an average residential customer have gone from $34 per month in 2005 to $51 per month in 2006, a 50 percent increase for improvements and higher operating costs.

Low-income customers will qualify for a new assistance program, according to Evan Jacobs, Cal Am's spokesman in Felton, and Cal Am also has gadgets available to help people conserve water.

In arguing for higher rates, the water company cited salaries and other expenses for its regional office in Chula Vista, corporate costs and outside services, and a premium paid to acquire the assets of the previous water company, Citizens Utilities.

Contact Gwen Mickelson at gmickelson@santacruzsentinel.com.

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