Valencia Water Company to explain proposed rate hikes

Valencia Water Company officials have reserved the biggest room at Valencia High School for a public meeting next month to discuss their proposed water rate increases for the next three years. Under the proposed plan, Santa Clarita Valley residents who get their water from the Valencia Water Company would pay just under 13 percent more for their water next year. The Valencia Water Company – one of three major water retailers in the SCV – scheduled the Nov. 14 public meeting in the school’s multi-purpose room to “consider adoption of the new water rates,” according to a letter it sent to its customers this past week. In looking at the proposed water rates, here is the bottom line forecast for VWC ratepayers: – a 12.9 percent increase in the overall monthly water rate 2017 to 2018. – a 7.3 percent drop in that same rate 2018 to 2019. – a 6.3 percent increase in that rate 2019 to 2020. The ups and downs should result in an 11.9 percent overall increase by 2020. Water company heads plan to use next month’s public meeting to explain the calculations they used in coming up with their new rates. Many factors figure into their “Cost of Service Study” calculations. One such consideration is the special hike in water rates imposed a year ago which offset money the company lost when drought-conscious customers purchased less water. That special hike – called a “revenue adjusted surcharge” which amounts to $7 each month – disappears after next year, hence the drop in overall rates 2018-2019. VWC water heads plan to use the public meeting to explain, for example, how a proposed 57.5 percent increase in the service charge by 2020 ends up being just 11.9 percent overall by 2020. “As one charge increases, the other charge decreases,” Valencia Water Company General Manager Ken Petersen told The Signal Friday, referring to the two charges which make up the complete bill.   Two charges The two charges which make up a complete monthly water bill include the service charge – which is your hook up to the water system, usually by a 3/4 inch pipe – and the commodity charge based on how much water you use in a month. According to proposed rate increases detailed in the VWC letter sent to customers, a single SCV family paying $16 a month will pay $25.22 by 2020. But, that’s only part of the monthly water bill – the monthly service charge. New rates are also being proposed for the amount of water used in a month – the monthly commodity charge, for the amount of water consumed in a month. The Valencia Water Company – like the SCV’s two other water retailers – charges a commodity rate based on the price of a single water unit consumed. Each “unit” of water equals 100 cubic feet of water.  An average SCV family of four consumes about 17 units of water a month, or about 1,700 cubic feet of water. The more water you use, the more you pay. VWC customers who consume the least amount of water in a month pay the lowest rate – called Tier 1. An average single 4-member SCV family consumes enough water in a month – about 17 units, or 1,700 cubic feet of water – to put them in Tier 2. Tier 2 customers who pay $16 today will see their water use rate increase next year and the year after, so that by 2020 they will be paying $25.22 for the same amount of water, under the proposed rate structure. This monthly service charge and Tier 2 customer changes amounts to a 57.5 percent increase, offset by other rate modifications. Currently, the VWC has five tiers reflecting higher rates imposed for more water used. Under the proposed new rate structure, however, the tier system would disappear. Instead, everyone will pay the same rate for water consumed. The commodity rate selected is the commodity rate paid by an average family, or $1.63 for 100 cubic feet of water. The public meeting is scheduled to take place Nov. 14 in the the multi-purpose room at Valencia High School on 27801 North Dickason Drive, in Valencia. 661-287-5527 on Twitter @jamesarthurholt