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VIEWPOINT: GSW’s new proposal introduces new local rate design

by Denise Kruger, senior vice president of regulated utilities at Golden State Water Company

Golden State Water Company recently submitted its 2014 General Rate Case (GRC) to determine rates for 2016 to 2018 with the California Public Utilities Commission (CPUC), a filing that is required every three years for regulated utilities.

The good news for Claremont residential customers is that our proposal will lower bills in 2016, maintain lower bills than current totals in 2017, and encourages high-water-use customers to use water wisely during the state’s worst drought in recent history.

The GRC filing launches an 18-month process where the CPUC and Office of Ratepayer Advocates will scrutinize Golden State Water’s proposal. The filing details all the costs associated with providing quality, reliable water service and how those costs would be recovered through rates. The proposal further analyzes the estimated bill impact for all customers.

Golden State Water must show evidence to support all projected expenses and infrastructure investments. This process, which is open to the public, includes community meetings, evidentiary hearings, the opportunity to protest and an administrative law judge’s review, and is arguably the most extensive and transparent ratemaking process for any provider. 

The GRC proposal reflects Golden State Water’s effort to encourage water-use efficiency, reduce costs and rates, and deliberately reflects the compromise agreement we reached with the Claremont Affordable Water Advocates (CAWA). The agreement is specific, detailed and defines a blueprint of “best practices” that residents and Golden State Water believe is an unprecedented collaboration to benefit current and future generations of Claremont residents.

Here are the details:

We are reducing the rates in the first three tiers, where a vast majority of customers fall, while also introducing a fourth tier rate for customers that use more than 33,660 gallons or 45 ccf per month. Under the proposed rate structure, average residential customers using 15,708 gallons or 21 ccf will save about $19 a year without changing any habits.

Secondly, we are committed to a significant local conservation education program that enhances Claremont’s tradition of being an environmentally-friendly community. Conserving our most precious natural resource is critical for our environment and will help customers lower their water bills.

The compromise agreement also calls for Golden State Water to continue to propose the lowest possible water supply costs through a regional planning approach. The breakdown results in lower costs to Claremont residents due to the high volume of water Claremont uses compared to other cities in the region, and reflects a more favorable cost ratio of groundwater to imported water.

Finally, the compromise agreement provides greater local control for residents and direct involvement in the ratemaking process. CAWA will file for intervener status in the GRC, which Golden State Water has agreed to support, and they will be able to review and oppose any specific expense or proposal that they do not feel is appropriate.

The modest increase in bill totals that customers would see in 2018 is necessary due to the $12.2 million in planned upgrades and replacement of key elements of Claremont’s water system to ensure the delivery of clean, safe and reliable drinking water. We are investing $4.1 million in 2014 alone, and have invested approximately $20 million over the past 14 years. These investments will ensure that the water needs of future generations of Claremont residents, schools and businesses will be met.

At the same time, we are also working to reduce our expenses and passing along those savings to customers. For example, at the time of the last GRC, Golden State Water had eleven officers. Since that time, the company has reduced its executive ranks by eliminating two officer positions: an executive vice president and a vice president. The company has also reduced its workforce in other areas in a manner that does not impact water service. Our goal is to reduce costs, wherever possible, without cutting corners or sacrificing quality with regard to your water service.

Learn more about the GRC proposal and what you can do to lower water usage at www.gswater.com/claremont.

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