Business

Monday, Jul 16 2012 06:13 PM

Cal Water asks for rate increases of 28 percent, 32 percent

BY JOHN COX Californian staff writer jcox@bakersfield.com

Cal Water has proposed raising rates on Bakersfield's typical metered residential customers by about 28 percent over three years, and about 32 percent for average flat-rate customers.

The utility said the increases are necessary to cover expenses associated with operating and maintaining its water system.

California Water Service Co.'s July 5 rate proposal before the state Public Utilities Commission begins an 18-month review process. During that time there are to be public hearings and scrutiny by commission staff and consumer advocates.

Cal Water's Bakersfield district manager, Tim Treloar, said in a news release that water use has gone down locally, which helps lower bills overall even as it increases some per-unit costs. He asserted that rates must rise to pay for stronger water quality standards and environmental regulations, safety improvements and inspections, preventative maintenance and infrastructure improvements.

"Unfortunately, water costs are rising, not just here, but throughout the country," he stated in the news release. "Many of them -- such as costs for materials, water production, and water treatment -- are increasing faster than the rate of inflation." Treloar could not be reached for comment Monday afternoon.

Consumer advocate Danilo Sanchez, water branch manager at the commission's Division of Ratepayer Advocates, said Cal Water's proposed Bakersfield rate increase "seems pretty high."

"That's something that we'll look at very closely," Sanchez said, adding that the division has only begun to review Cal Water's request.

"We're going to dig into the numbers, look at their capital expenses."

The proposed rate increase would not hit all at once but be spread out between 2014 and 2016. For Bakersfield's metered residential customers, the first year's increase would be 8.8 percent, followed by 14.9 percent the second year and 3 percent the third.

Flat-rate customers would see a 14 percent increase the first year, 13 percent the second and 2.4 percent the third.

Among the capital improvements Cal Water said the rate increase would pay for:

* six miles of new water mains;

* additional security to water facilities

* 3,900 feet of large diameter transmission mains;

* new membrane filters and additional water treatment;

* expansion of the system that lets the utility monitor and control certain water facilities remotely.

Capital improvements and maintenance are the primary ways Cal Water makes money; the utility's water sales are considered a pass-through of its costs.

Cal Water has about 271,000 customers in Bakersfield. They comprise one of 24 districts operated by the utility statewide.

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