AVRWC Town council presentation (October 27, 2015)
I want to provide an update on the Ranchos’ rate increase being proposed by the California Public Utilities Commission for water service for our customers in Apple Valley. Ranchos understands no one wants to pay any more for water service than they should and, we work hard each day to operate and maintain the water system efficiently to ensure we can deliver high-quality water service
Firstly, the CPUC process has been public, truly transparent, comprehensive, and the Town of Apple Valley has been involved each step of the way. The proposed decision by the CPUC for Ranchos’ rates for water service reflects a concerted effort by the CPUC to balance the interests of our customers with the cost of efficiently operating Ranchos during an epic drought, which prompted the Governor to implement a mandatory reduction in water use of 28% for Apple Valley.
The total cost of water service does not go down in proportion to lower water use. This is because the costs to operate and maintain the system that delivers the water to homes and businesses don’t go away because we use less water — they are fixed costs. That means the costs to operate 8,100+ valves and 2,700+ hydrants, collect and test thousands of water quality samples, monitor and set pump and tank levels, read meters, pay bills, keep records for our 20,000+ customers, and fix leaks — i.e. everything needed to keep the system going including investments to improve a capital-intensive water system — all continue. In fact, fixed costs are increasing, primarily due to the need to replace infrastructure. This story is not unique to Apple Valley and is being played out all over California with both government-owned and private water systems.
This proposed decision, scheduled to be finalized in mid-November, means that starting in late November an average household continuing to conserve (using about 9,500 gallons per month) will see rates for water service increase 2.64% or $3.41 per month [sic] or about 10 cents a day [sic] compared to 2014. But households continuing to use about 12,300 gallons or more a month, will see their monthly bills increase $18 or about 60 cents a day. The proposed decision on rates also included a $7.4 million capital investment program for system replacement/renewal for this year.
For the record, the Town’s news release on their website misquoted the proposed decision by the CPUC stating:
The a typical household served by Apple Valley Ranchos will see its water bill go up 28.7 percent — or more than $200 per year — based on normal water usage …
As explained a moment ago, what the CPUC actually said in its proposed decision was that customers who choose to consume water without conserving will see a 28.7% increase in their bill for water service and customers who comply with the conservation goals set by the Governor’s Executive Order, i.e. the
new normal, will only see a 2.64% increase in their bill compared to last year.
Once the PUC’s decision is finalized, Ranchos will be actively communicating with our customers regarding all aspects of the CPUC decision.
— Tony Penna, General Manager of Apple Valley Ranchos Water Company
Webmaster note: According to the CPUC proposed decision, the bill increase for those customers who are conserving would be $3.41 per bill, or $1.71 per month, which works out to roughly $0.06 per day.