California legislation aimed at educating water utility rate payers

A new piece of legislation signed by Governor Jerry Brown in California amends the Public Utilities Code to codify existing CPUC regulatory requirements for transactions between water utilities and their affiliates...

SAN FRANCISCO, CA, Sept. 12, 2012 -- A new piece of legislation signed by Governor Jerry Brown in California amends the Public Utilities Code to codify existing CPUC regulatory requirements for transactions between water utilities and their affiliates.

Senate Bill (SB) 1364 was signed on Aug. 29, 2012, and takes effect Jan. 1, 2013. It applies to regulated water utilities with 2,000 or more service connections (covering more than 99 percent of all customers served by regulated utilities).

Of particular significance to customers, though, SB 1364 requires water utilities to identify estimated rate impacts on various customer classes (residential, commercial, etc.) in their existing public notices about rate applications to the CPUC, and it authorizes the CPUC to require these utilities to inform customers about the outcome of general rate case (GRC) applications.

As a point of clarification, some published reports on the CPUC's customer noticing procedures erroneously asserted that water utilities could notice proposed rate increases without disclosing the cost of some capital projects being considered by the utility. In fact, all proposed capital projects' projected costs are included in proposed rate increases outlined in public notices to customers.

Through the revisions made by SB 1364, individual customers are provided a more comprehensive understanding of the GRC process and the true impact of water rate increases.

By requiring water utilities to inform customers about estimated rate impacts according to customer class, and by giving the CPUC authority to have these utilities inform their customers about the outcome of general rate cases, this new law adds a welcome degree of transparency and accountability to the ratemaking process.

The California Water Association (CWA), which represents approximately 125 investor-owned public water utilities regulated by the California Public Utilities Commission (CPUC), welcomed the enactment of the bill, which codifies activities that many investor-owned water companies already undertake as a result of current CPUC requirements or on a voluntary basis. CWA worked with Senator Huff throughout the legislative session on Senate Bill 1364 and said it's pleased with the outcome.

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