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.
(3) comments
Hi Walter,
Just to clarify. Monterey One only sells water wholesale to Monterey Peninsula Water Management District (MPWMD) and they in turn sell it to Cal Am with no mark up.
Monterey One began injecting excess water into the Seaside Basin in November. This new water (2,250 acre feet a year) from the expansion of Pure Water Monterey is not needed for current residents and business and can be used for growth – new housing, new businesses and jobs. But to use it the CDO (Cease and Desist Order) must be modified and the moratorium on new water meters lifted.
MPWMD has asked the State Water Resources Control Board to modify the CDO and lift the moratorium. In December, Cal Am asked the State Water Board to deny MPWMD's request. This would block our community from using this new water for growth. But we would still have to pay for the water.
Why would Cal Am oppose using this water? Because within a few years it would prove that Cal Am's expensive and profitable desal plant in Marina is no longer needed.
Let's hope the State Water Board sees through Cal Am and responds to the needs of the Peninsula.
Melodie Chrislock
Public Water Now
All Peninsula Cal Am ratepayers will face rate increases as of Jan. 2027. It's not too late to comment to the CPUC. A short comment in opposition is all that’s needed but you can say more if you’d like. The number of comments matters. See what your neighbors have posted.
POST WRITTEN COMMENTS HERE:
https://apps.cpuc.ca.gov/apex/f?p=401:56::::RP,57,RIR:P5_PROCEEDING_SELECT:A2507003
Support the Public Advocates Office recommendations. They are fighting these rate increases on our behalf. Here’s the link to the Jan. 23 Public Advocates Office report: https://www.publicadvocates.cpuc.ca.gov/water/general-rate-cases/cal-american-water-company-grc-a2507003
Melodie Chrislock
Public Water Now
Maybe buy water from Monterey One Water and save everyone a lot of money? They've already done a lot to improve the water situation, and will have excess water.
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