Calif. American Water applies for rate increase to fund infrastructure improvements

The new rates would take effect January 1, 2018, pending approval by the California Public Utilities Commission.

May 3rd, 2016
Content Dam Ww Online Articles 2016 05 Drinking Water Glass

CORONADO, CA, May 3, 2016 -- California American Water has filed a proposed application to set new rates in each of its service areas for 2018 through 2020. The new rates would take effect January 1, 2018, pending approval by the California Public Utilities Commission.

This application is seeking to raise revenue by approximately $50 million over three years, beginning with a $34.7 million increase proposed for January 1, 2018. This increase is based on 2016 authorized revenues calculated at current rates. The average increase on January 1, 2018 for all customers is just pennies per day and amounts to an approximately 16 percent increase in revenue for the company. Specific increases for each service area or the “rate design” will be addressed in a later filing.

The request seeks $125 million for infrastructure improvements over the period. The request for the increase will assist in funding system and infrastructure improvements which will help maintain high-quality water service. As part of the request, the increase will renew and replace water treatment facilities, pumps and pipelines.

“The process of our rate case is meticulous and fully transparent. It is driven by the needs of our customers as well as our need to upgrade and maintain our infrastructures,” said Rob MacLean, President of California American Water. “We want to continue to provide customers excellent value for their water service and maintain our systems to provide high-quality water service.”

These capital investments, which include upgrades to the water distribution system, water treatment facilities, storage tanks and pumping stations, are necessary to maintain and improve water quality, reliability, fire protection and customer service for the six districts served by California American Water.

The company will continue a commitment to conservation or tiered rates, which will reward customers who conserve water with lower rates. The company will continue to fund infrastructure improvements to maintain quality service to its customers and address the need to replace and upgrade water infrastructure.

As part of its conservation campaign, the company will continue its comprehensive programs in each of its service areas that offer customers a wide range of water-saving rebates and devices.

“We encourage everyone to take advantage of our conservation programs to reduce their water use and lower their water bill,” MacLean said. “In each district we offer free water use audits, free water-saving devices and rebates on water efficient appliances. We also offer a low-income program for qualifying customers who may need assistance with their bill.”

The increased rates proposed in the rate petition are a request only. The CPUC will make the final decision regarding the actual increase. The CPUC will hold Public Participation Hearings on this request to get input from customers and the public. California American Water will notify customers of the time, date and location once the hearings are set. Rates will remain unchanged until this request undergoes extensive public scrutiny by the CPUC. This process will include extensive independent review and public evidentiary hearings. The process is expected to conclude in late 2017, with new rates taking effect by January 1, 2018.

About California American Water
California American Water, a subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and/or wastewater services to more than 615,000 people. Founded in 1886, American Water (NYSE: AWK) is the largest and most geographically diversified publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs 6,800 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found at www.amwater.com.

More in Drinking Water