Water retailer seeks double digit rate hikes

Water officials want to raise water rates by 13 percent – and as much as 16 percent in some cases – over the next three years for people who receive their water from the Santa Clarita Water Division. And, in keeping with state law, a public hearing is about to be scheduled. A couple living in the SCV who pays the SCWD $38.67 for using 800 cubic feet of water in a month would pay $46.20 for the same amount of water in 2020, according to the rates being proposed, an increase of 16.5 percent. Similarly, an average SCV family of two adults and two kids paying $58.52 for 1800 cubic feet of water used in a month, would pay $66.10 for the same amount of water, an increase of 13 percent. “For the average customer, the estimated increase in the monthly bill from 2017 to 2020 is 13 percent,” Valerie Pryor, CLWA’s assistant general manager, told The Signal Monday. For those not happy with the proposed rate increases, you can blame the drought.   Drought impact Consultants hired by the water retailer’s parent company – Castaic Lake Water Agency – to review rates blamed the drought, in part, for driving rates up. Water officials asked the consultants to developer a Cost of Service study for the delivery of water to consumers.  “The Cost of Service study is a process the SCWD goes through every three to four years wherein we conduct a thorough analysis to project the financial requirements for operations and maintenance and capital projects,” Pryor told The Signal Monday. Raftelis Financial Consultants Inc. was hired to do the analysis. “While we work hard to save costs and increase efficiencies – such as installing radio read meters – we are nonetheless subject to increases in some costs such as power and chemicals and increasing water quality costs to comply with new state mandates,” Pryor said. Consumers, however, would be paying an extra 13 to 16 percent, in part, for water they never used during the drought. “The SCWD, like other water agencies in California, recently faced challenges related to the reduction in water usage due to ongoing drought, conservation efforts and state-mandated conservation targets,” according to the Raftelis study. SCV ratepayers turned off their taps to conserve water during the drought years on the order of state officials and Governor Jerry Brown to conserve water. In turn, local water retailers who told consumers to use less water – also received less money. Tuesday’s recommendation to increase SCWD rates by double digits comes on the heels of a 25 percent rate hike proposed a year ago by the Valencia Water Company that would have offset a drastic drop in revenue blamed on conservation efforts. Valencia Water Company Valencia Water Company customers, who conserved water above and beyond state and local requirements, were initially told in May 2016 to pay for those efforts via a rate increase as high as 25 percent. The proposed “revenue adjustment surcharge” meant a typical Santa Clarita Valley family of four that paid about  $40 a month would have paid at least $48.54 while the surcharge was in effect. Valencia Water customers saved more than 4 billion gallons of water between January 2014 and mid-2016, VWC General Manager Ken Petersen said in May 2016. That translated to about $5 million in revenue lost to the water company. Water officials wanted to “recover” that revenue loss, which they blamed on a “significant drop in water sales caused by increased conservation over the past year.” After voiced opposition to the proposed 25 percent hike, Valencia Water Company proposed a lowered rate hike of 18 percent. In September 2016, they approved an increase which amounted to just over 13 percent. The Santa Clarita Water Division, owned by SCV’s water wholesale the Castaic Lake Water Agency, is one of SCV’s three main water retailers. The Valencia Water Company – also owned by the CLWA – and the Newhall County Water District are SCV’s other water retailers. But does a price hike for Santa Clarita Water Division customers mean in actual dollars? Proposed rate hike Water bills are issued according to how many units of water are used in a month.  A unit of water is 100 cubic feet, likely appearing on water bills as ccfs. One unit roughly translates to 748 gallons. The average household – representing a family of four – uses about 18 units of water in a month, or 13,464 gallons – enough to fill 134 bathtubs. “Over 60 percent of SCWD’s residential customers will see a monthly increase of less than $5,” Pryor said about the proposed rate hike. “Our average usage is 18 ccf per month.” Members of the CLWA’s Budget and Rates Committee are expected to approve a recommendation Tuesday that calls for the scheduling of a public hearing on the proposed rates, in keeping with California’s Right to Vote on Taxes Act, or Proposition 218. Once approved, the agency’s board of directors would be expected to approve the same recommendation next week.     [email protected] 661-287-5527 on Twitter @jamesarthurholt

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