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Thursday, Feb 14 2013 06:54 PM

$600 water bill? Keene residents fight rate hike

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    By Tehachapi News

    Almost everyone in Keene depends on the Keene Water Company, owned by Union Pacific Railroad. The company wants to more than triple water rates.

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BY MATTHEW MARTZ Tehachapi News

KEENE — Imagine paying more for water than you do for your mortgage. That's what residents in the small rural community of Keene are up against if the Union Pacific Railroad gets its way.

Back in December irate residents packed the Villa La Paz Conference and Education Center, venting their frustration to a representative from the California Public Utilities Commission and a Union Pacific Railroad attorney over proposed hikes that would more than triple the already amazingly high water rates.

Two months have passed and nothing has changed, as their protests seemed to have fallen on deaf ears.

But longtime Keene resident Erik Jacobs, who is spearheading the opposition against the proposed hike, is not giving up and has written numerous letters to the CPUC and the Union Pacific Railroad, which owns and operates the Keene Water System.

He's even started a Facebook page to help bring attention to the issue that he and his neighbors are facing. If the railroad wins, it will send water rates soaring to an average cost for residential water service to more than $600 per month -- more than 52 times the national average of $50.

Jacobs said if the railroad is allowed the increase it asked the utilities commission to grant last November, his water rate will be somewhere around $1,500 per month.

"That's not per year, but per month," he said. "It would be more than my mortgage."

Established in the late 1800s as a result of an agreement between the railroad (Southern Pacific at the time) and the local community, the operation of the Keene Water System has changed as the railroad's water use for its operations declined and ceased altogether as engines shifted to diesel from steam.

Since then, the railroad claims an estimated $1 million per year in operating costs, far more than it is collecting in payments from the 24 hook-ups on the system.

But Jacobs claims the railroad is using the law, which says it's entitled to make a profit, to raise rates so no one can afford them.

"Raising more revenue is the ostensible rationale for the rate increase, however, it is not reasonable to assume that it will raise more revenue for the utility," Jacobs wrote in a letter to Union Pacific. "In fact, such an unaffordable rate increase would have only one effect -- significantly decreasing customer participation in the water system."

The increase, he said, will prompt many customers to drop off the system, spinning the railroad into a vicious circle in recouping its operating costs.

However, in a written response to Jacobs dated Jan. 16, UP attorney Robert Bylsma said the railroad is not trying to make a profit, but is asking for the approval of the rate increase to cover the cost of hauling water to its 24 existing customers in the communities of Keene and Woodford.

Water hauling was determined to be the least costly alternative by the railroad for continued provision of water to the system's customers, after the original Keene wells were taken out of service in 2010. The CPUC deemed those wells incapable of producing either the quantity or quality of water required by law.

Nevertheless, residents claim that if enough people drop from the water system, which many already have, the railroad could shut down water operations all together.

That's exactly what Jacobs thinks Union Pacific would like to happen, alleviating the requirement that they remain in the water business.

But for now, water continues to flow as the proposed rates are still under review, and according to Christopher Chow, PUC public information officer, there is no timeframe for when the review will be completed.

Calls to the railroad's attorney were not returned.

Meanwhile, Jacobs is demanding that the PUC not approve the railroad's rate request and says there are only two acceptable solutions.

"The Utilities Commission should either demand that the railroad continue to fulfill its longstanding obligation to provide affordable water to the community of Keene, regardless of the cost," Jacobs said, "or facilitate a renegotiation between the railroad and the community in order find a mutually acceptable new agreement."

Background

The current rate case before the PUC is not the first time that the state agency has been involved with the railroad and its water customers in Keene since May 2000 when an investigation was initiated to determine whether the Keene Water Company was a public utility under state law.

The railroad argued that it was not, but lost that battle. Subsequently there have been repeated battles between the railroad and Keene residents including the Stonybrook Corporation, representing the La Paz property where the Cesar E. Chavez National Monument is located, along with other operations associated with the United Farm Workers and the Cesar Chavez Foundation.

That property is part of the customer base of the Keene Water Company, as is the Kern County Fire Department. The Keene Post Office, however, is served by a well on its property.

Marc Grossman, a spokesman at La Paz, said they "are concerned about the situation and are in solidarity with the rest of the community."

He said, "It is too early to telegraph what the next step will be, but we are using every resource available to make sure there is an equitable solution for both sides."

One Keene resident, who did not want to be identified, said she found a way to provide her own water several years ago and is no longer served by the water company.

She installed a pressure system in her home and pays to have water delivered to a storage tank. With each delivery costing about $180, she can manage for several months on one delivery in the winter, but sometimes needs two per month in the summer. Even with that expense, she said, she paid for her system in savings over the charges of the Keene Water Company in just one year. And she is even able to water her yard, something most people in Keene cannot do because of the expense of the water.

"Most of the old-timers who lived here are gone," she said. "And some new people have found that they had to let their property go because of the water expense."

According to posts on the Facebook page, other residents are considering putting in storage tanks and having water hauled in as an alternative to the Keene Water System.

It is unknown when the PUC may rule.

-- Claudia Elliott of the Tehachapi News contributed to this report.

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