Proceeding number A2207001 before the California Public Utilities Commission began on July 1, 2022 when California American Water filed an application to increase revenues from ratepayers. The utility company pitched a tiered plan: A $55.8 million increase in 2024 (18.7 percent), followed by $19.6 million in 2025 (5.5 percent), then $19.9 million (5.3 percent) in 2026. “California American Water’s main focus is our customers,” the application reads. It went on to note cost pressures: capital investment, labor costs, inflation and anticipated decrease in water sales as customers increasingly emphasize conservation.
That last part poses a fundamental problem to utility companies: They make money by selling a product (in this case, water) and it’s a product we are encouraged to use less of. That’s where utilities rely on what are known as decoupling mechanisms, formulas that enable the company to bill customers with a surcharge. The idea is that if actual water sales fall short of projected revenue, a utility company can still collect the difference to reach its target.
This has long been the way Cal Am has sold water. But in a proposed decision released on Aug. 27 by Administrative Law Judge Jacob Rambo, it’s time for it to come to an end. “A forecast is just that, a forecast, a reasonable prediction,” Rambo wrote. “It is not a guarantee. As with all investments, Cal Am’s equity investors assume some risk.”
Rambo’s proposed decision will be taken up by the CPUC, as early as Oct. 17 for a vote. Commissioners may choose to adopt his 64-page proposal, or something different. And Cal Am is advocating for something different.
Since Rambo’s decision was released, representatives of Cal Am, National Association of Water Companies and California Water Association have logged 11 one-on-one meetings with commissioners or their representatives about the proposed end of the decoupling mechanism.
In a brief filed earlier this year in defense of decoupling, Cal Am wrote: “California’s water supply is increasingly at risk as it confronts more frequent and extreme droughts and floods, rising temperatures, aging infrastructure and other challenges made more acute by climate change. This is not a time for half-measures.”
Decoupling is the major sticking point, but on most issues, Cal Am and the Public Advocates Office reached a settlement, and Rambo proposed the commissioners adopt it. Their agreement calls for lower revenue than what Cal Am initially pitched in its 2022 application: A $20 million increase (6.4 percent) in 2024, $15.5 million (4.7 percent) in 2025, and $15.4 million (4.4 percent) in 2026. In total, that is $44.3 million less than originally sought over three years.
Melodie Chrislock, managing director of Public Water Now, is organizing ratepayers to post comments on the CPUC website urging commissioners to adopt Rambo’s proposed decision. “We need hundreds of comments to offset Cal Am’s lobbyists,” she says. “The cost of water right now is a major issue.”
(6) comments
Cal Am ratepayers can influence the upcoming California Public Utilities Commission decision on the cost of our water. The CPUC will vote shortly on Cal Am’s General Rate Case which sets our water rates for the next three-year period.
This decision will affect the water costs for everyone on the Monterey Peninsula. This is an easy action you can take that will have impact.
Please urge the Commissioners to stand by their 2020 ruling and deny Cal Am’s conservation surcharges for water we don’t use. Ask them to support the proposed decision in A.22-07-001 without changes.
Post your comment here: https://apps.cpuc.ca.gov/apex/f?p=401:56:0::NO:RP,57,RIR:P5_PROCEEDING_SELECT:A2207001
I have supported the Peninsula having a sufficient and sustainable water supply.
Now may I ask you to explain how the hundreds of thousands of dollars your family has received from The MPWMD is separate from your work with Public Water Now? Obviously PWN and MPWMD are made up of the same people.
The Peninsula will have a sufficient and sustainable water supply from the expansion of Pure Water Monterey next year. If you really want water for growth, maybe you could spend your time trying to convince Cal Am to agree to lift the CDO instead of trying to discredit Public Water Now.
MPWMD is a public agency, Public Water Now is a community organization of volunteers. They are not the same people. Both organizations have the same goal – the buyout of Cal Am and a long-term sustainable water supply for the Peninsula.
My work with Public Water Now has nothing to do with MPWMD or WellmanAd. My husband works for MPWMD.
My work for Public Water Now is completely separate from WellmaAd. John Tilley has supported Cal Am from the beginning. Why?
Monterey Peninsula Water Management District has paid Wellmanad (aka Melodie Chrislock and her husband) how money hundreds of thousands of dollars for "Outreach". Wellmanad also ran the Public Water Now campaign as well as other PWN candidate campaigns.
Please MPWMD please stop using my ratepayer money for propoganda, huge legal bills and more. Please simply focus on providing water for a community in need of it for decades.
Cal Am wants to add new WRSP (WRAM) surcharges to our bills! These surcharges would be for the water we don't use due to conservation.
Each year Cal Am estimates how much water they think we will use. If we don't use as much as they estimate they want us to pay for the water we did not use. It would raise our water bills each year on top of Cal Am's rate increases.
CPUC Judge Rambo's proposed decision eliminates WRSP (WRAM) and other conservation surcharges. Cal Am is lobbying hard to change his decision.
The public needs to support the proposed decision as written without any changes. Please post your comment on the CPUC website at https://apps.cpuc.ca.gov/apex/f?p=401:56::::RP,57,RIR:P5_PROCEEDING_SELECT:A2207001
What’s going on here?
Remember the $64 million in WRAM surcharges for the water we didn’t use? We’re still paying it off on our water bills. It’s the WRAM/MCBA surcharge on your bill.
The CPUC discontinued WRAM, but now Cal Am and it friends are trying to bring it back under a new name WRSP (Water Revenue Sustainability Plan). Cal Am argues that it promotes conservation. It doesn’t. How could charging us for water after we’ve used it promote conservation?
In 2020 the CPUC ruled that WRAM (Water Revenue Adjustment Mechanism) surcharges must be discontinued. They had ten years of data showing that WRAM did not promote conservation and that Cal Am and other investor-owned water utilities were using the surcharges to exceed their authorized profit.
These surcharges allow Cal Am to forecast the amount of water they “expect” will be needed. Then if our actual use is less, they collect unearned revenue on the estimated use rather than the actual water used. This is how they charge us for water we didn’t use.
When the CPUC said no more WRAM the investor-owned water utilities cried poor us and went to the State legislature to overrule the CPUC. The law now says the CPUC must “consider” WRSP in every rate case.
Last week, in a brave move CPUC Administrative Law Judge Rambo issued his proposed decision in Cal Am’s General Rate Case. His decision eliminates WRSP and other conservation surcharges. But his proposed decision must be adopted by a vote of the CPUC commissioners.
Cal Am and its allies are lobbying hard to get the CPUC commissioners to change the judge’s decision in their favor.
The public can protest and counter Cal Am’s lobbying by commenting on the CPUC website in support of Judge Rambo’s decision.
Please urge the Commissioners to stand by their 2020 ruling and deny Cal Am’s WRSP and ACAM conservation surcharges. Ask the commissioners to support the proposed decision as written without any changes.
Post your comment: https://apps.cpuc.ca.gov/apex/f?p=401:56:0::NO:RP,57,RIR:P5_PROCEEDING_SELECT:A2207001
Show the CPUC the public supports Judge Rambo's decision as written.
Talking points for comments:
• Please support the proposed decision as written without any changes.
• Ratepayers are already on the hook for $20 million in WRAM surcharges statewide.
• Monterey Peninsula ratepayers already conserve water due to the extreme costs Cal Am charges.
• The CPUC proved that WRSP/ WRAM surcharges do not promote conservation.
• Cal Am should set rates every 3 years and not be allowed to raise them between rates cases.
• Utilities should set the cost of water up front so we know what we will pay, not after we’ve used the water.
• Cal Am already has a 10.3 % profit. Conservation surcharges allow them to exceed that.
• If less water is used than forecasted the utilities should get better at forecasting, not charge us for water we didn’t use.
• Buzz words like conservation, social justice and low income are just cover for surcharges that increase utility profits.
• Thank you, Judge Rambo, for supporting ratepayers in your decision.
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