New Rates Likely to Take Effect in March 2017
PACIFIC GROVE, Calif., December 1, 2016 – Today the California Public Utilities Commission issued an order for new water rates and a new method for calculating water charges for California American Water customers on the Monterey Peninsula. Their ruling also includes changes to the emergency conservation and rationing plan administered by California American Water and the Monterey Peninsula Water Management District. While the Commission’s decision does not increase the amount of revenue California American Water will collect, it will result in a rate increase, as it approves recovery of $39.8 million in revenue, that was previously adopted by the Commission, but which was not collected due to increased water conservation. Collection of the $39.8 million will be reduced for revenue previously recovered in rates of approximately $8 million. The rate change is expected to begin around March, 2017 depending on when the Commission grants implementation approval.
The CPUC’s ruling will increase the average single family residential bill by about $20 a month and bills for the typical commercial and other non-residential customer by about $40 per month. Customers eligible for the company’s low income assistance program will pay about an additional $9 per month. The uncollected revenue approved for recovery will be collected through a surcharge over five years, at which point the charge will expire.
“There’s no question these increases are significant and will be felt by our customers,” said California American Water’s Central Division Director of Operations, Eric Sabolsice. “Unfortunately, increased conservation does not correspond to a decrease in our water system expenses. No matter how much water our customers use, we still have 680 miles of water pipes to maintain along with the same number of production and treatment facilities. We have the same customer service demands, number of meters to read and environmental regulations with which we must comply.”
Approximately ninety-five percent of the costs to run the Monterey Peninsula system are fixed and therefore, do not decrease when less water is consumed.
The Commission’s decision today also modifies the company’s rate design in several ways that should reduce the risk of future under-collections and simplify the complex manner in which customers on the Monterey Peninsula have been charged for water. The new design will increase the percentage of revenue collected through the fixed monthly service charge based on meter size, while reducing the percentage of revenue collected through charges based on the amount of water used.
The ruling does away with the current allotment system that determines how much water customers are allowed at each tier of the billing system according to the number of persons living in each household, number of large animals, and other factors. Instead, a standardized system commonly used by other water companies will be implemented, in which all customers get the same amount of water at each rate tier. Allotments for non-residential customers were eliminated in 2013. The division system which replaced allotments for commercial customers will remain unchanged. Discounts for customers eligible for California American Water’s low income ratepayer assistance program will also be increased.
California American Water offers a diverse array of conservation incentives and programs that help customers save water and reduce their bills. Generous rebates for low-flow appliances and efficient irrigation systems are available, as well as free water saving devices, such as showerheads, sink aerators, positive shut-off hose nozzles and more. The company’s conservation staff will also conduct water wise house calls by appointment, where conservation specialists visit a customer’s home or business and make recommendations on ways to save water both indoors and out. For more information on these offers and programs, visit www.montereywaterinfo.org or call (831) 646-3205.
The Commission’s changes to California American Water and the Monterey Peninsula Water Management District’s conservation and rationing plan include a reduction in the number of stages, improvements for more efficient administration, and increased consistency with the Monterey Peninsula Water Management District’s other conservation rules and ordinances.
California American Water will be hosting customer workshops on the new rate design and its impacts at its business office located at 511 Forest Lodge Road, Suite 100 in Pacific Grove on Tuesday, January 17 and Wednesday, January 18 at 6 pm. For more information contact Catherine Stedman at 831-646-3208 or catherine.stedman@amwater.com.
California American Water, a subsidiary of American Water Works Company, Inc. (NYSE: AWK), provides high-quality and reliable water and/or wastewater services to approximately 600,000 people.
Founded in 1886, American Water Works Company is the largest and geographically diversified publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,800 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in more than 47 states, and Ontario, Canada. More information can be found by visiting www.amwater.com.
