Proposed water rate hike raises concerns (February 23, 2014)

APPLE VALLEY • A local water company has filed a request with the California Public Utilities Commission to raise its rates incrementally over the next three years.

If the move is approved by a CPUC administrative law judge, Apple Valley Ranchos Water Company would increase its rates 14.88 percent in 2015, then 8.48 percent in 2016 and 8.19 percent in 2017, according to a notice sent out by Apple Valley Ranchos.

The increase stems from a projected 14.59 percent decrease in water sales for 2015-17. Ranchos says revenue increases are necessary to recover operating costs and the cost of capital on its investment used to provide water service to more than 65,000 customers within its 50-square-mile service area.

After recently receiving a letter about the proposed increase, Councilman Scott Nassif said he’s concerned and will probably discuss the issue during Tuesday night’s council meeting.

Every three years, they propose an increase, which have been pretty substantial, Nassif said. How come the other cities aren’t dealing with multiple increases?

In 2011, the CPUC ruled that Ranchos could raise its rates by 3.8 percent effective Jan. 1, 2012 after the company’s request for a three-year incremental rate increase stalled. The rate increase was given by the CPUC based on the cost of living increase.

The original increase requests were 20 percent beginning in 2012: 14.4 percent the first year, 2.3 percent in 2013 and 3.3 percent in 2014.

Scott Weldy, general manager of Apple Valley Ranchos, said the CPUC finally gave the water agency a rate increase of 14.7 percent in 2012, 1.18 percent in 2013 and 2.23 percent in 2014.

From 2007 to 2013 our customer consumption dropped just shy of 32 percent, Weldy said. Can you imagine a business surviving if they took that kind of hit?

Weldy said effective conservation of water has contributed to the company’s drop in residential revenue, which helps pay for improvements to the water system.

As Ranchos continues to encourage water conservation to its customers, the mailed notice said Ranchos must continue to pay the fixed costs of operating the water system, regardless of the amount of water sales. Ranchos says a rate increase would allow it to improve its water infrastructure.

Over the next four years, we need to focus on some $40 million in improvements, which includes main replacement and improvements, and water storage in northern Apple Valley near the airport, Weldy said.

Apple Valley Councilwoman Barb Stanton said she’s not happy about the constant wave of proposed rate increases by AVR.

It’s an almost 30 percent increase over the next three years, which is a totally unacceptable situation for our town, Stanton said. We must control our destiny, but how can we when we’re being held captive by a private company?

Stanton said increased water rates will have potential residents, developers and business owners looking for greener pastures, which are watered by more affordable water.

There is a point when you are chasing people out of town, and we are getting close to that, Nassif said. I don’t have an answer, but this is not healthy for the people of Apple Valley.

After receiving his rate notice, Norm Parker, 72, said he’s not bothered by the proposed increase.

I’ve seen prices go up with food, gas, medicine, health care and even haircuts — but everybody needs water, Parker said as he walked his dog near Lions Park on Friday. I’m more concerned about the cost of fuel going up. It’s been too low for too long.

Town spokeswoman Kathie Martin said Ranchos has scheduled a public information meeting at 6 p.m. April 2 at the Town Conference Center.

The rate increase application will be reviewed by he CPUC formal administrative law process. The CPUC may schedule formal public evidentiary hearings where the formal parties are subject to cross-examination before a judge.

Those wishing to comment on, or informally protest, the rate increase application can contact the CPUC public adviser’s office.

Written public comments can be emailed to [email protected], or sent by mail to Public Adviser’s Office 505 Van Ness Avenue, Room 2103, San Francisco, CA 94102. Call can be made to the PAO at 866-849-8390 or at 415-703-2074.

Information and exhibits on the proposed rate increase are available for review at the Ranchos office at 21760 Ottawa Road. Please call the agency for more information at 760-247-6484.

Source: Rene Ray De La Cruz, Daily Press