California water utility tries to push through 40.3 rate increase

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Only one year after California American Water increased its water rates by 24.3 percent for Sacramento-area customers, the utility is back asking the state’s utility regulators to allow them to enact another rate increase of 40.3 percent over the next three years.

The company said that rising costs, mostly for infrastructure projects, are the reason for the requested rate increases. It also said that it was planning an aggressive meter retrofit program.

Angry residents packed the City Council chambers in Rancho Cordova, and 30 people spoke about the proposed increase. Most of the residents said that even if there is a legitimate need for improvements to the system, given the current state of the economy, now was not the best time.

“We believe our water service is still a tremendous value,” Andy Soule, general manager of the water company’s Northern California division, said during the meeting.

Most of the residents at the meeting disagreed, citing poor customer service, faulty meter readings and billings that have tripled in the last decade.

An independent advocate agency, the Division of Ratepayer Advocates for the PUC, has already filed an objection to the proposed rate hike for Sacramento and two other areas in California, saying the hike would present “unacceptable rate shock” for customers.

The advocate’s office did its own analysis of the request and said that the increase should be substantially lower than what the company is seeking. It says the increase should be only 13.8 percent in 2012, followed by a decline in rates for 2013.

Breaking it down by year, California American is asking for permission to increase rates by 22.8 percent for 2012, 6.7 percent for 2013 and 7.1 percent for 2014.

The utility is a subsidiary of publicly traded New Jersey-based American Water, which serves 16 million customers in 35 states.

Information from: The Sacramento Bee

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