Sticker shock

Bob Braley knows a thing or two about pressure. He’s a retired law enforcement officer who lives at the end of a curved cul-de-sac in Chico where water does not always flow from faucets, hoses or sprinklers with consistent force. He’s taken Cal Water to task about the size of his house’s meter, the definition of service charges and line items on his bill.

So, when Braley received written notice from the local water utility that it’s requested a rate increase, he crumpled up the paper, threw it in the trash, pulled it back out and prepared to push back.

“This is an awful large increase this year—I mean, 30 percent is way too much,” he said.

In its general rate case application, which utility providers can file every three years, Cal Water asked the California Public Utilities Commission to approve a rate increase of 31.2 percent for residential metered customers in 2017, then another 2.7 percent in 2018 and 2.6 percent in 2019. For nonresidential metered customers, the initial increase would be 17.1 percent.

Those are the figures if Cal Water can create a regional market that consolidates Chico with the Oroville, Marysville and Willows districts; if denied that permission, the initial increases would be 24.6 percent for residential and 11.3 percent for nonresidential.

Braley understands that the bulk of the revenue would go to capital improvements, “but they have the nicest building in Chico, and I feel like I own one of those solar panels on top,” he said with a chuckle.

Braley—and anyone else concerned about the rate increases—will have an opportunity to make a case directly to decision-makers. Two state utility commissioners are scheduled to visit Chico for a meeting Tuesday (April 26) comprising public hearings on PG&E and Cal Water.

Like Cal Water, PG&E also has requested a rate increase, though because the electric and gas utility is restructuring its usage tiers instead of proposing a large rate jump, it has raised fewer eyebrows (to learn more about the energy company’s increases, see link in info box).

Pete Bonacich, general manager for Cal Water’s Chico district, said his office has fielded phone calls about the rate request—mostly informational—and that the company welcomes questions and comments from the hearing.

Cal Water identified nearly $19.7 million in local projects for the revenue from the increase. Bonacich said the “big thrust” is to replace water mains, aging pumps and equipment with high repair costs.

“It’s pretty easy to look not only at California but [also] at the United States and read about failing infrastructure,” he said. “We certainly don’t want to be in a position where we haven’t kept up our system to where it’s dependable and reliable.”

Fortunately, he said, Chico has neither lead pipes nor a water supply with corrosive elements, and routine testing has shown safe water.

Not every water district is in as solid a position. Both Bonacich and Mayor Mark Sorensen explained that the state is pushing for consolidation of smaller districts in order to mitigate risks. Even though Cal Water is an umbrella organization, each district (e.g., Chico) has independence in rates and coverage.

As a city, Chico has filed for “intervenor” status in the CPUC proceedings, according to Sorensen, who said he wants to know more about the accounting of Cal Water’s capital projects and the basis for consolidation.

“We’re going to have to get a better understanding of the whole rate case,” he said. After Tuesday’s hearing, he added, “I fully expect that we’ll have a much better understanding of what the process is, what the timeline is and how we [at the city] will interface with that process.”