Water officials looking at rates paid by residents and businesses in the SCV have been busy this week hammering out a rate-setting process and defining the role of a ratepayer advocate.
Having an independent ratepayer advocate on hand to assess, among other considerations, the fairness of proposed water rates, was one of the cornerstones of the bill that created the SCV Water Agency in January.
For Sen. Scott Wilk, R-Santa Clarita, author of SB 634, such an advocate would serve as the watchdog looking out for unfair rate increases.
“Having an independent ratepayer advocate represents a voice for the little guy,” Wilk said Monday.
“There will be an independent, authoritative ratepayer advocate who will stand up for consumers, both residential and commercial,” he said.
When his bill promising the creation of a brand new all encompassing water agency was being debated — and tweaked according to the concerns of critics and peers — the ratepayer advocate became a cornerstone of his legislation.
“Giving ratepayers an advocate is something I felt really strongly about and wanted to ensure was in the bill,” he said. “My staff and I spent months gathering information and input from not only some of the state’s top water and governance experts but from all SCV stakeholders, both pro and con.”
“We opened our doors and many citizens came in to see me personally to air their concerns or voice their support. It was clear to me that ratepayers wanted to have a representative who would stand up for them.”
Just where and how such an advocate would figure into SCV Water’s rate-setting process was the subject of discussion Monday, when members of the agency’s Finance and Administration Committee met.
Committee President Dan Mortensen, while honoring the commitment to have the role of ratepayer advocate written into the rate-setting process as spelled out in the Act, questioned the need for one on a fundamental level.
“Each one of us (board member) was elected by ratepayers, so each of us should be a ratepayer advocate,” he said. “We are the voice of the ratepayer.”
Transparency, others argue, is what an independent ratepayer advocate brings to the table.
“Adding a ratepayer advocate imparts an additional layer of transparency and objective review for the board to consider as rates are developed and approved, insuring the rates are reasonable and fair in the provision of reliable and safe water,” SCV Water General Manager Matt Stone said Tuesday.
Even before it became law Jan. 1, the idea of an objective ratepayer reviewer was discussed by water officials trying to form the new agency.
“In developing the proposed merger of water agencies, the governing boards of Newhall County Water District and Castaic Lake Water Agency felt that an additional level of review, by an independent party accountable directly to the Board, would provide further confidence in ratemaking decisions that the new Agency would face going forward,” Stone said.
“Senator Wilk agreed with and supported the concept and legislation provided for use of a rate setting process that includes a ratepayer advocate function,” he said, noting SB 634 required the new board to adopt a rate-setting policy that included a ratepayer advocate function by the end of this year.
“The board and public benefit from an additional level of review of rate and fee proposals,” Stone said. “By integrating water services under one umbrella in the Santa Clarita Valley, we added efficiencies and cost savings in many areas.
“We also wanted to reassure customers that rates would continue to reflect the accurate cost of providing services, and a rate payer advocate provides that additional level of accountability and review for the new unified Board of SCV Water,” he said.
Such an advocate would review specific financial proposals, such as water rates, and then form an opinion to be shared with the board and the public.
Once in place, with the role of independent ratepayer advocate clearly defined, board members would be bound to work with that person for at least four years.
After that, board members could get rid of the advocate.
Senate Bill 634 states: “The board of directors shall not eliminate the ratepayer advocate role before January 1, 2023. On and after January 1, 2023, the board of directors may eliminate the ratepayer advocate role with an affirmative vote of four-fifths of its membership.