FAQ: San Jose Water Company’s proposed 44% rate increase
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Below is a set of Frequently Asked Questions related to the San Jose Water Company’s proposed 44% rate increase over three years:
1. Would a 44% San Jose Water Company (SJWC) rate increase provide better quality water than a lower rate increase? The California Public Utilities Commission’s Division of Ratepayer Advocates (DRA) recommended a much lower rate increase that would achieve the same results.
2. How many professional staff did the DRA utilize to analyze SJWC’s rate increase application? The DRA utilized six professional staff to analyze the SJWC application and develop the DRA recommendation. You may review the DRA’s document by clicking here.
3. What is the mission of the CPUC’s Division of Ratepayer Advocates (DRA), which recommended a much lower San Jose Water Company rate increase? The DRA’s statutory mission is to obtain the lowest possible rate for service consistent with reliable and safe service levels. In fulfilling this goal, DRA also advocates for customer and environmental protections.
4. What San Jose Water Company rate increases has the DRA recommended? The Division of Ratepayer Advocates recommended an increase of no more than 0.05% in 2013, 3.73% in 2014, and 5.65% in 2015. This is approximately 10% compared to the 44% requested by the for-profit San Jose Water Company.
6. How are San Jose Water Company rates increased? General rate cases are litigated proceedings before the CPUC that establishes San Jose Water Company’s base rates for a three-year period. Pursuant to state law, San Jose Water Company is required to file a general rate case filing with the CPUC every three years. In the general rate case process, the CPUC sets rates to cover the costs of providing water service and to allow the company to earn a reasonable return on its investment in water system infrastructure. Major costs to operate a water system include purchased water, groundwater extraction tax, electric power, water treatment costs and labor. The processing of San Jose Water Company’s filing generally takes the following 12-month path:
A. San Jose Water Company reviews its historical costs, projected costs, and planned water system improvements and prepares a General Rate Case application for consideration by the CPUC.
B. The CPUC’s Office of Ratepayer Advocates (ORA) audits San Jose Water Company, analyzes its application, and makes a recommendation.
C. The CPUC hosts a public hearing to receive input from customers on the application. Customers may also write to the CPUC.
D. The CPUC holds a formal hearing, which is much like a court proceeding.
E. A CPUC Administrative Law Judge assigned to the application issues a proposed decision.
F. The CPUC Commissioners vote on the proposed decision.
7. At what point in the process are we? A CPUC Administrative Law Judge is reviewing the application in order to issue a proposed decision. The Administrative Law Judge may issue his/her decision soon. The CPUC Commissioners will then vote on the proposed decision.
8. How can I support the recommendation of the CPUC’s Division of Ratepayer Advocates? If you are opposed to the San Jose Water Company’s proposed rate increases of 44% over three years, you may submit an email noting your opposition by clicking here to submit an Online Petition. The email will automatically be submitted to the California Public Utilities Commission Public Advisor’s Office. The email will serve as a written informal comment, which carries the same weight as verbal comments provided at public events.
9. Where can I get more information? Learn more about San Jose Water Company by watching an NBC Bay Area Investigate Unit video by clicking here. Click here to read more info on the NBC News web site. Reference the Division of Ratepayer Advocates’ Report and Major Recommendations, our Frequently Asked Questions, a Blog by a San Jose Resident, or a San Jose Mercury News Editorial.
10. Is the San Jose Water Company the same as the Santa Clara Valley Water District? No. The San Jose Water Company is a private corporation that supplies water to much of San Jose. They are responsible for the water distribution system within the area they serve. The Santa Clara Valley Water District is the government agency that manages our water supply and flood protection. The Water Company buys water from the Water District and operates its own wells. The Water Company is a regulated utility (as is PG&E) that bills us for the water we use. They have to get all rate hikes approved by the Public Utilities Commission.
11. Will San Jose Water Company rates still be affordable after a 44% increase? The answer to this question varies per customer. For example, San Jose residents on a fixed income would be more adversely affected than those residents with greater income. However, an unnecessary 44% increase should not be approved even if it were affordable.
12. Are San Jose Water Company insiders buying shares in advance of the 44% rate increase they requested? San Jose Water Company (SJWC) is a wholly owned subsidiary of SJW Corp (NYSE symbol SJW). MarketWatch lists insider trades at: http://www.marketwatch.com/investing/stock/sjw/insideractions. According to the MarketWatch info, George Moss, SJW Corp. Independent Director, acquired more than $235,000 worth of shares on November 20, 2012 alone.
13. How much are SJWC Officers and Directors paid? Information is available at http://sjwc-rate-increase.blogspot.com/p/how-much-are-officers-directors-paid.html.
14. What information became available at the San Jose Town Hall held on December 6, 2012? Some of the information that became available was that the Division of Ratepayer Advocates (DRA) utilized a staff of six professionals to perform their analysis of the SJWC proposal and to develop the DRA recommendation. The DRA noted that SJWC rate increases are generally reached through settlement, but SJWC’s final proposal was just “too far” for a settlement to be reached. The DRA also noted that the cost of water is a pass-through cost. The Water Company pays the Water District for the water, so the cost of water is not really a factor in the rate increase.
15. Did my water bill increase on January 1, 2013? Temporary rates went into effect on January 1st. The state will make a final decision soon. If the state’s final rates are lower than the temporary rates, the Water Company is required to refund the difference.