October 6, 2018
WRATES Update #46 - Proposed 3 yr Rate Increase Decision / Postponed Public Hearing
1. SJWC/CTWS Merger - PUBLIC PARTICIPATION HEARING ON OCT. 8, 2018 has been POSTPONED. We have now been told by SJWC and CPUC that it will likely occur in November. I will notify all when a new date has been scheduled. We all need to attend.
WRATES believes that the CPUC should rule that SJWC should file an application with the Commission to determine if the merger is in the public interest. It is the responsibility of the CPUC to prevent opportunistic deals from Maine-Connecticut, Texas, and elsewhere coming into Silicon Valley to soak off hundreds of millions of dollars by manipulating availability and cost of a life-sustaining, scarce resource.
To view Merger OII documents, visit https://sjwfacts.weebly.com/merger.html
2. General Rate Case (GRC) - WRATES has been working diligently to have our voices heard in the current GRC in which SJWC is seeking to increase our rates by 17.8% over the next 3 years.
The proposed decision on SJWC's Application for a Rate Increase for 2019, 2020, and 2021 is now in the hands of the assigned Administrative Law Judge (ALJ) Karl Bemesderfer. WRATES has been involved since January, 2018 as a party to the proceeding along with the City of San Jose, California Public Utilities Commission (CPUC) Public Adviser's Office (Cal PA - formerly the Office of Ratepayer Advocates) and the Applicant, SJWC. ALJ Bemesderfer will be ruling based on Findings of Fact and Conclusions of Law. WRATES has addressed the facts but did not have access to legal representation to argue the Law.
WRATES has completed its input on the customers’ (ratepayers’) behalf. We now want to make sure that our future rates are fair and are properly considered by the Commission. On October 9th, ALJ Bemesderfer will issue his proposed decision for the Commissioners to accept, reject, or modify. Based on last year's proceeding to determine the Cost of Capital, also affecting these rates, a large number of industry biased letters will probably be sent to the Commissioners to counteract any part of the decision that favors ratepayers. We will need to write our own letters to the Commissioners to counter any biases by October 29th. We will keep you posted.
WRATES will issue an update sometime after October 9th to summarize the findings of the proposed decision and present topics of concern for our letter writing campaign.
To prepare, the WRATES BRIEF explaining our positions on six different issues that could increase our future rates beyond those necessary and fair can be viewed at https://sjwfacts.weebly.com/grc.html highlighted in purple. Many of the differences between what SJWC has proposed and what Cal PA (ORA) has substantiated as fair and necessary, have been settled between the two parties. WRATES comments on this proposed settlement are also posted at https://sjwfacts.weebly.com/grc.html highlighted in purple.
**Please scroll to the bottom of this email for Bill S.’s description of what is transpiring in this General Rate Case and how we can prepare for ALJ Bemesderfer’s proposed decision.
3. Water 101:
We have added many new WRATES members. Welcome. Here is a simplified overview of who is involved in our water rate increases.
San Jose Water Company (SJWC) - Regulated, For Profit, Investor Owned Water Utility, Retailer. Increases our rates every January 1st and many additional increase throughout the year via the Advice Letter process. SJWC submits a Rate Increase application (GRC) to the CPUC every three years.
San Jose Water Group (SJW Group) - Non Regulated Parent (or Holding) Company for SJWC, NYSE:SJW. Created in 1985 for the purpose of moving SJWC assets into non-regulated subsidiaries.
California Public Utility Commission (CPUC) - Government entity that is tasked with regulating investor owned utilities. CPUC is currently being audited by the California State Auditor regarding water rates. Visit https://sjwfacts.weebly.com/audit.html for details.
Santa Clara Valley Water District (SCVWD) - Bay Area water wholesaler, supplies water to 13 bay area retailers including SJWC. They increase their wholesale rate to retailers every July 1st and SJWC passes that increase on to the ratepayer.
For profit, Investor Owned Utilities (like SJWC) and California Government Regulator (CPUC) have a long established, lengthy, complicated process in place to request, evaluate, and ultimately increase our water rates.
Read “In a nutshell…What is the GRC?” at https://sjwfacts.weebly.com/grc.html
4. Correction in previous update. Please note MAVEN not MARVIN
To learn more about the Water Fix and California Water, visit MAVEN’S NOTEBOOK https://mavensnotebook.com/ This is a wonderful resource for California Water News.
WRATES, Water Rate Advocates for Transparency, Equity, and Sustainability
"Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.” Margaret Meade
In SJWC’s Reply of Sept. 25th, SJWC has requested that the Commission reject all of WRATES contentions as inaccurate and untimely and reject WRATES’ arguments regarding the two remaining contested issues from the settlement. Please take some time to review several of the key points of the subjects we have presented and SJWC's reason to reject them. WRATES has focused on 6 different issues, summary on pages 3-6 of the WRATES Opening Brief. The latter three; VI.A, VI.B., and VI.C.; are the ones we believe our direct input will help to affect our rates the most.
The chart below shows the locations in the referenced documents that you can find WRATES position, WRATES comments on the proposed settlement, and SJWC's Reply to our position. Here's a brief description of all six issues:
IV.A. - Refund of Service Charge Billing Violations. This issue is an attempt to settle the inadequate refunds proposed by SJWC in Advice Letter 510 in June 2017. On September 14th 2018, the Commissioners approved a formal investigation, I1809003, into San Jose Water Company's billing practices as a separate proceeding. We will update you later as this investigation proceeds.
V.A. Recovering the cost of a past Research, Development, and Demonstration Project, and V.B. Recovering past costs through different Memorandum Procedures are two very technical proposals by SJWC that Cal PA has not agreed with. While WRATES has sided with Cal PA on both and provided extensive supporting information on the former, we are uncertain how the proposed decision will go.
VI.A. This refers to the original notification and the invitation to the Public Participation Hearing we received that provided us with information about how much an average bill would change. Because of the proposed change in rate design that raises our fixed service charge. WRATES believes that we as ratepayers were not provided adequate information on how customers with different levels of usage would be affected. SJWC contends differently.
Please compare the public notice we received in the mail from SJWC announcing the GRC application (https://sjwfacts.weebly.com/grc.html highlighted in purple at top of webpage) and the table on page 21, starting at line 15 in the WRATES brief.
VI.B. This is the issue we will need to get involved in no matter what the Decision proposes. WRATES believes there are so many deficiencies in the proposed rate design that are seriously unfair to ratepayers that if we can help force SJWC to redo it fairly, we will benefit. A summary of our perception of the worst failures is covered starting at page 6, line 7 of the WRATES Settlement Comments.
VI.C. This represents the approved 3 year capital budget that, combined with last year's approved Cost of Capital of 7.64% helps determine how much our rates will change for the next three years. The good news is that the proposed settlement between Cal PA and SJWC reduced SJWC's requested amount of $403,217,363 by $83,818,909 or 78.5% of the proposed excess. WRATES was comfortable with this figure which directly reduces our expected rate increase.
Details are found on:
WRATES will be in touch after the October 9 with an update alerting you to the actual proposed Decision, how it may affect us specifically, and how we can help assure it is as fair as possible for us.