LUCERNE – California Water Service (CWS), which owns the Lucerne water district as part of its Redwood Valley District, has filed an application with the California Public Utilities Commission (CPUC) for a 21.3 percent rate increase, to become effective on July 1, 2008 or later, and a 3.4-percent increase the following year.

In its announcement of the application, which covers several other districts, the company said that for the average residential customer using 7 Ccf (700 cubic feet), or 5,236 gallons, of water per month, the monthly water bill would be $14.31 (48 cents per day) higher the first year and $2.76 (9 cents per day) higher the following year.

The application is for review of CWS centralized services costs, which were last reviewed in 2004. The company said costs for centralized services provided to all districts have increased, including those for water quality testing, engineering, maintenance, information systems, accounting, and conservation

programming. After the CPUC reviews these costs, Cal Water will be allowed to allocate them proportionally to all districts.

The CPUC recently adopted a streamlined processing plan to review Cal Water’s entire operations starting in 2009. The current application is an interim request to transition to the new schedule.

Among increased costs the company hopes to cover with the new rates are: Increased allocated company benefits costs for health care, pension, and retiree health care,$25.5 million; increased other general expenses, $8.3 million, and increased allocated general payroll expense, $8.3 million.

Lucerne Community Water Organization (LCWO), which intervened in the company's last rate increase request, is reviewing the current application. At its monthly meeting Thursday, July 12, LCWO made no decision on whether to intervene in the current request. Scheduling decisions made on Thursday by an administrative law judge for the CPUC are not yet available. LCWO's next meeting is scheduled for Thursday, August 9, 7 p.m. at the Lucerne Alpine Senior Center,Country Club Drive at 10th Ave.

The company's proposed schedule would open settlement negotiations on December 26, 2007, with hearings before the CPUC in San Francisco from January 11 through 15, 2008.

In an apparent effort to avoid the kind of public outcry which occurred in Lucerne in 2005 when CWS announced its request for a 273-percent rate increase, the company is asking that some increases be deferred and recovered subsequently.

It requests “authority to institute a rate deferral with subsequent recovery for the Salinas and Visalia districts to avoid rate shock issues associated with requested large percentage increases. Applicant requests recovery of $4,856,600 deferred from rates in Salinas by instituting a $0.126 surcharge on all water sold for a period of sixty months. Applicant requests recovery of $8,078,600 deferred from rates in Visalia by instituting a $0.111 surcharge on all water sold (and an equivalent flat rate surcharge) for a period of sixty months.”

The rate increases proposed in other districts covered by this application are:

• Chico District by $6,380,400 or 49.1 percent in July 2008, $1,651,100 or 8.5percent in July 2009, and by $1,651,100 or 7.9 percent in July 2010;

• East Los Angeles District by $7,193,200 or 36.5 percent in July 2008, $2,034,800 or 7.6 percent in July 2009, and $2,034,800 or 7.0percent in July 2010;

• Livermore District by $3,960,900 or 31.2 percent in July 2008, $942,200 or 5.6 percent in July 2009, and by $942,200 or 5.4 percent in July 2010;

• Los Altos-Suburban District by $5,172,500 or 30.5 percent in July 2008, $1,189,100 or 5.4 percent in July 2009, and by $1,189,100 or 5.1 percent in July 2010;

• Mid-Peninsula District by $5,435,100 or 23.7 percent in July 2008, $1,634,200 or 5.8 percent in July 2009, and by $1,634,200 or 5.5 percent in July 2010;

• Salinas District by $5,119,700 or 29.8 percent in July 2008, $3,636,900 or 16.3 percent in July 2009, and by $2,271,300 or 8.7 percent in July 2010;

• Stockton District by $7,474,600 or 29.0 percent in July 2008, $1,422,400 or 4.3 percent in July 2009, and by $1,422,400 or 4.1 percent in July 2010;

• Visalia District by $3,651,907 or 28.4 percent in July 2008, $3,546,440 or 21.3 percent in July 2009, and by $3,620,482 or 17.6 percent in July 2010.

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A Sunday Morning Dream
written by lenny, July 15, 2007

It should be illegal to profit from the sale of water.

Thinking locally, expanding globally.

AHHHHHHHHHHHHH

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You could have owned it!
written by yellowwing, July 15, 2007

The old Lucerne Water Company had been for sale for quite some time prior to California Water Service making the purchase - knowing at least that SOME improvements needed to be made.

Are the share holders of California Water Service receiving exorbitant dividends? Do they pay their staff substantially more than other companies?

If YOU had purchased the water company as a not-for-profit the rates would probably be higher. The water company would still need to meet expenses and make all DHS mandated improvements. At least California Water Service is able to pool it's resources and share some job classifications between its many districts.

Every time any water company needs a rate increase to meet expenses people are in an uproar. After all, water is essential to life. As a rate payer you have a choice - you can pay for good clean healthy water in an infrastructure that works OR you can pay less and have less than good clean healthy water and an infrastructure that doesn't work.

That being said - IF California Water Service is gouging it's customers by paying their people substantially more than other water companies and is paying huge dividends, then there is a problem.

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...
written by Donna Christopher, July 15, 2007

The shareholders of CWSC are receiving a guaranteed rate of return at I believe 8%. How many stocks are guaranteed that - only utility stocks which is very reminiscent of extortion as utilities, especially water, are necessary. I marvel at what utilities and the PUC keep pulling off, nothing real tricky mind you. Just the revolving door of execs from utility companies and members of the PUC switching places like they are square dancing and the call went out to change partners. Yeah, water is gonna be real expensive in Lucerne from here on out. If it is owned by the public then we won't need to guarantee a return rate of 8%, tho we will have a loan payment to make.This is a long term idea/commitment - the kind we need to make with our children and their children in mind. Its called a sacrifice for the future - do we have it in us? Personally I'm not sure as a nation we have the attention span for much of anything beyond a cold one & cable. I've never seen a privately owned business not put some of its profit back into said business till I ran into CWSC. They only get away with it because water is a necessity and they are damn near related by blood to the group that is supposed to be bulldoggin'em in order to protect the public (a very unfunny joke to some degree). As to water quality, look around this town, there has got to be something in the water :wink: Haven't been in the new CWSC office but the one they will be going back to had cases of bottled water in it for the employees to drink. 'Nuff said?

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not quite right
written by patsy, July 15, 2007

yellowwing and Ms. Christopher both make some good points, but are not quite accurate.
Yellow ignores the fact that a publicly owned, not-for-profit, water system would not have to be concerned about attracting new stockholders with constantly rising dividends. and the local ratepayers would have access to its financial information, including executive salaries and other perks, amounts paid for repairs, and full details on future plans for improvements.
information on the CWS stock is available at http://ir.calwatergroup.com/ph...stockquote

investment analysts love water stocks -- SmartMoney.com
has a good story on that, which says "Last year $15 billion worth of water-industry acquisitions were made, many by foreign companies and often at fat premiums. This could be just the beginning. There's a new Web site for water stocks (www.waterinvestments.com) as well as a mutual fund that focuses on the industry (www.waterfund.net), and Charles Schwab's Washington Research Group just hosted a water conference for institutional investors."

Ms. Christopher, Cal water is not guaranteed its rate of return (presently about 11%). It's guaranteed a return up to that percentage.
I wouldn't call it a sacrifice for the future, I'd call it an investment in the future.

The hopeful news on the waterfront is that many more people are beginning to understand that making a profit on a necessity of life is greed at its worst.

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...
written by Donna Christopher, July 15, 2007

Thanks for the clarification on the amount they are "guaranteed" up to. Yes it is an "investment in the future" but you and I both know that there will be some sacrifice involved -CWSC ain't gonna roll over and play dead. We both recognize for profit water "is greed at its worst", they see it as greed at its best. The sacrifice will be the great cost of water. If the company becomes owned by the public we have, on top of all the other expenses that this plant is generating, the cost of acquisition. We won't be able to spread the cost over all the other water companies/districts cause we will be the only one. This will play hell on everyones finances in the short term, as a sacrifice and an investment. Are we ready for the challenge?

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Monetary Decisions
written by yellowwing, July 19, 2007

Bottom line is the water company is NOT locally owned and unless the rate payers are rolling in cash it never will be.

As Ms. Christopher points out - the cost of acquisition in addition to the cost of paying off the incurred debt would be challenging. It won't be a short term financial burden, it will be our children's future as well.

The community served by Lucerne Water has a limited customer base. As long as California Water Service can share the cost of debt and pool employee resources it is a boon to a smaller community.

There are many things that are essential to life that are driven by profit - people need to remove emotion and stick to logic. We may not like the fact that someone is making a profit from a glass of water, but without the impetus of profit where would the funding come from? Obviously the ratepayers don't won't to foot the bill.

We can keep our fingers, toes and everything else crossed, rattle our swords and HOPE the PUC does the job it is supposed to do.

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