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Golden State Water will say anything for a profit

by Claremont Mayor Larry Schroeder

We applaud the COURIER’s attempt to educate Claremont residents on their water bills. As your recent article, “Drop by Drop,” correctly points out, water bills in Claremont are not only difficult to understand but they also include additional charges on high water users, as well as charges for those who choose to conserve.

In other words, the private water company who services Claremont, Golden State Water, can’t lose. We get charged additional fees whether we use or save water.

While we agree it’s challenging to understand Golden State Water’s (GSW) billing system and numerous fee schemes, it is, however, very easy to understand that Claremont water customers are being over-charged for water service merely to keep a private water company awash with our money.

Since your article, GSW has attempted to blame Claremont residents for the high cost of water in our city.  In their opinion piece printed in the Inland Valley Bulletin, an executive with GSW claims that residents in Claremont use more water than do residents in neighboring cities and urge our residents to conserve. But what GSW chose to omit was that when Claremont residents conserve water, they are charged with what is known as a Water Revenue Adjustment Mechanism (WRAM) fee. GSW has once again proven they will say, or in this case not say, just about anything to keep their profits rolling in.

Unlike municipally-owned and operated water systems in California, private water companies like GSW are guaranteed profits for their shareholders by law. In fact, GSW touts to its shareholders that they have provided continual profits to Wall Street for the last 57 years. 

But not only are shareholders benefitting at the expense of Claremont water users, according to Bloomberg Businessweek, the person in charge of overseeing GSW ’s operations in Claremont, Robert Sprowls, receives nearly $1.6 million in annual compensation.

But their abuse doesn’t stop there. Eva Tang, who serves as GSW’s chief financial officer, receives over $900,000 annually. In addition to its executive staff, GSW has a board of directors that also receives compensation, most of them receiving in excess of $100,000 for service on the board. The cost for these salaries and expenditures are directly passed onto ratepayers.

So while residents attempt to make sense of their water bills, one thing is certain: Money from Claremont ratepayers is flowing like water to GSW. And Golden State is still not satisfied. Pending before the California Public Utilities Commission (PUC) is an application to grant them an additional rate increase of 24.54 percent in 2013.

The city of Claremont is opposing GSW’s rate increase application before the PUC.

By the end of the year, water ratepayers will know the outcome of the PUC’s decision regarding GSW’s application for more ratepayer money. Sadly, experience tells us the PUC will likely grant them a rate increase.

Regardless, the Claremont City Council is not sitting idly by, hoping the PUC will reject GSW’s latest request. As part of our ongoing efforts to bring fairness to the water rates in Claremont, the city council is pursuing other options.

In January 2012, city council held a public meeting on water issues and appropriated $200,000 to conduct a water acquisition study. The city’s consultants have toured the system, studied financial records and appraised the system. The consulting team will present the feasibility study to the city council at a special closed session meeting on October 23. The city will identify and examine multiple options to fund and operate the system, should it decide to end GSW’s monopoly and pursue acquiring the water system.

We encourage residents to visit the city’s website for updates as we work to bring fairness to our residents’ water rates.

 

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