Keeping Water Affordable

April 13, 2021
As the coronavirus pandemic raged on, utilizes and their ratepayers felt the economic squeeze. For the San Francisco Public Utility Commission, the pandemic was a call to step up for their customers in their time of need.

At the San Francisco Public Utilities Commission, we have always viewed resiliency as one of the cornerstones of our agency.

The ability to prepare, plan, and adapt for an ever-changing future guides our decisions to invest strategically in seismic infrastructure and maintenance programs. It is the basis for our fiscal discipline and sustainable budget planning. It embodies the determination and adaptability of our 2,400 employees.

While resiliency underscores the entire mission of our agency, we had no idea just how much the past year would put that creed to the test not just for us, but for our customers. Beyond the unimaginable toll on human life and health, many of the area’s residents lost their jobs or wages from the pandemic’s economic fallout. They are faced with the impossible choice of putting food on their table and buying medications, or keeping their water running. Like our agency, their resiliency is being pushed to the limit.

At the SFPUC, we believe that no one should ever be presented with those terrible decisions, so we took immediate action to help our customers.

In March 2020, we announced a suspension of utility shutoffs due to late or non-payments from residences and businesses. This initiative, which was planned in coordination with San Francisco Mayor London N. Breed, also included the postponement of liens and collections, and waiving of late fees and penalties.

While this undertaking provided some respite for local customers, we knew more action was needed. In May, we implemented an emergency expansion of our Customer Assistance Program (CAP), which provides financial aid to eligible customers.

Under the emergency provisions of the CAP, residential customers receive a 35 percent discount off their monthly wastewater bills and 15 percent off their water bills. The program was made available to customers who were financially impacted as a result of COVID-19 and had a pre-pandemic household income under 200 percent of the San Francisco Area median income, a significant expansion of eligibility from our pre-pandemic assistance program.

To date, more than 5,400 residential customers have benefited from the initiative. Those customers have saved a monthly average of $53 on their water and sewer bills.

Following the residential emergency program, the SFPUC launched a new program that provided 20 percent discounts off water and wastewater bills for eligible businesses and non-governmental organizations which demonstrated loss of income related to the pandemic and the subsequent shelter-in-place restrictions applied in San Francisco. The program was made available to all nonprofits and businesses with fewer than 50 employees.

So far, more than 620 nonprofit organizations and small businesses have benefited, receiving an average monthly savings of $183.

We take great pride in being able to extend a helping hand to our customers struggling to cope with this terrible pandemic. But we must be realistic about the limitations we face. These financial assistance programs are not sustainable — not for the SFPUC or for the hundreds of other utilities across the nation facing similar situations.

For years, water utilities like the SFPUC have sounded the alarm about affordability issues facing our customers. The pandemic has only deepened our concerns. Hundreds of thousands of families throughout America are one missed paycheck or medical emergency away from financial hardship.

It would be rash for the SFPUC to immediately resume utility shutoffs, or to saddle our customers with onerous debts and back payments that they will never be able to pay. Yet we cannot maintain these assistance programs and defer payments without external funds because we have fiduciary obligations to balance our budget and are limited by legal restrictions. In California, for example, utilities are prohibited from using ratepayer revenue to fund low-income assistance programs.

We need to find a solution that supports our most vulnerable customers while still protecting the SFPUC’s financial health. This situation is not unique to San Francisco, which is why we are advocating at the federal level for both emergency assistance and long-term funding solutions to the affordability issues facing our customers. Those advocacy efforts include securing federal funding in COVID-19 relief and recovery bills for emergency assistance for ratepayers and a new, permanent program to subsidize low-income customers of water and wastewater utilities. We are also are engaging with other utilities locally and at the state level to pilot alternative payment options.

Equally important, we are advocating for increased federal investment in water utility infrastructure to ensure that water rates remain affordable for all ratepayers. The most salient lesson from our industry’s climbing rates in recent years is that our customers cannot on their own support the capital investments necessary and legally mandated to maintain reliable, safe, and equitable service for all our customers. We need meaningful federal investment and partnership, similar to other core infrastructure sectors such as transportation.

This pandemic has highlighted just how perilous the financial straits are for our organizations and for our customers. The California State Water Resources Control Board just released the results of a far-ranging survey, and its findings are staggering.

According to the report, California households face over $600 million in household water debt, with some 1.6 million homes — roughly 12 percent of all state residents — dealing with an average of $500 in arrears. The findings show clear racial inequities, with households of color bearing the brunt of this debt. More than 130 smaller utilities across the state will need federal help in the next six months if they are to survive.

It is clear that we need a solution now. We have to find an answer that will mitigate the financial burden of debt for our customers while also providing stable, long term funding sources for America’s water and wastewater utilities.

We are a resilient agency and we are honored to serve customers with essential utility service. But for us and our peer utilities to tackle this issue, we are going to need the help of the federal government. We are hopeful that the new presidential administration, working in partnership with Congress will bring about new opportunities to address the affordability crisis.

Financial relief and recovery packages aimed at addressing the pandemic should include emergency assistance specifically dedicated for water utilities to relieve customer debt accrued during the pandemic. Future stimulus legislation should create and fund a permanent low-income rate assistance program and greatly increase funding levels for critical water infrastructure financing programs such as the Clean Water State Revolving Fund (SRF), Drinking Water SRF and the Water infrastructure Finance and Innovation Act (WIFIA) program.

This pandemic has presented an obstacle like nothing we have seen before, but this isn’t the first time our industry has banded together to meet a challenge. We encourage all water and wastewater utilities to contact their Congressional delegation to make the case for increased federal support and to share key data about the fiscal impact of COVID-19 and the need for funding to assist low-income customers.

We need to speak with one voice to make the case that intervention is needed, not only to maintain our services and operations, but so that our customers never have to question whether they can afford to keep their water on. Their resilience has been stretched to the breaking point, and help is needed. We look forward to working with our fellow utilities on this effort in the coming months and years. WW

About the Author: Michael Carlin is the acting general manager of the San Francisco Public Utilities Commission. In this capacity, he provides leadership and management of the agency’s public policies and strategic initiatives, assets and resources, and all operational, administrative, and financial functions of the agency. Appointed as the Deputy General Manager and Chief Operating Officer in 2009, He supervises the agency’s efforts in capital planning, emergency response, asset management, and other functions across the three business lines — water, power and wastewater.

About the Author

Michael Carlin | Deputy General Manager

Michael Carlin was appointed as the Deputy General Manager and Chief Operating Officer in 2009. In that role Michael supervises the agency’s efforts in capital planning, emergency response, asset management, and other functions across the three business lines – water, power and wastewater. Prior to this position, Michael served as the Assistant General Manager for Water where he led the effort to diversify the water supply portfolio. He continues in that role leading many of the environmental initiatives including addressing the impact of climate change on the organization.

He joined the PUC in 1996 as the Water Resources Planning Manager where he led the effort to develop comprehensive capital plans. That effort led to the establishment and execution of the Water System Improvement Program. Prior to joining the City, Michael worked for more than a decade at the San Francisco Regional Water Board where he was the Planning Chief. Michael is a native San Franciscan and continues to live in the City today.

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