Tens of thousands of California American Water Company customers in the Monterey area could face a rate hike of 16.1 percent beginning Jan. 1, 2027.
On July 1, 2025, the company filed an application with the California Public Utilities Commission (CPUC), requesting to increase rates to fund a range of system improvements. Cal Am is seeking authorization to increase revenues for water service statewide by $63.1 million, or 17.2 percent in 2027; $22.1 million, or 5.1 percent in 2028; and $26 million, or 5.8 percent in 2029.
The proposed increases would be spread across systems in 11 counties across the state that Cal Am serves.
For the Central Division, which includes the Monterey System (serving most of the Monterey peninsula) and eight smaller satellite systems, Cal Am is requesting an increase in revenue of $25.6 million, or 24.4 percent from 2027-2029. Rate increases in 2028 and 2029 will be significantly lower, around 3-4 percent.
Monterey resident Jody Schisel spoke up at a public participation hearing that drew roughly 50 people to a standing-room-only meeting in Sand City on Tuesday, Jan. 13: “As a person who is recently retired on a fixed income, I can assure you my Social Security and my small pension is not going to exceed 22 percent over the next three years, so I will be running a deficit.”
The sentiment was echoed by dozens of residents for the next hour. The CPUC has hosted public hearings throughout the month, with the final hearing on Jan. 28.
Josh Stratton, external affairs manager for Cal Am, said the company’s application includes “approximately $72 million for new and recurring infrastructure projects in the Central Division here in Monterey.” Cited projects include replacing six miles of water mains per year, rehabilitating three water storage tanks per year, and replacing aging tanks, among other things.
Evidentiary hearings, during which an administrative law judge will develop a proposed decision, are scheduled for April.