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Sunday, February 17 , 2019, 3:26 pm | Partly Cloudy 56º


Golden State Water Customers Protest Proposed Rate Increases at Santa Maria Meeting

Orcutt resident Ishmael Martinez objects to proposed Golden State Water Co. rate increases during a California Public Utilities Commission meeting Tuesday in Santa Maria. Click to view larger
Orcutt resident Ishmael Martinez objects to proposed Golden State Water Co. rate increases during a California Public Utilities Commission meeting Tuesday in Santa Maria. (April Charlton / Noozhawk photo)

Golden State Water Co. customers packed Shepard Hall at the Santa Maria Public Library Tuesday night to voice their collective dismay with a proposal to raise their rates by nearly 20 percent starting next year.

The Santa Maria service area targeted for the rate increase includes Orcutt, Sisquoc and other areas of unincorporated northern Santa Barbara County, as well as Los Osos and the Edna Valley area in neighboring San Luis Obispo County.

If approved by the California Public Utilities Commission, the average water bill for residents served by the private water company would increase by an average $10.45 a month for individuals in the Orcutt area and $9.81 for Los Osos customers.

The proposed increase would be phased in over three years, with increases of 19.15-percent planned for 2019, another 3.1-percent in 2020 and a 3.89-percent hike in 2021.

More than 40 community members attended the meeting and most of them told administrative law judge Gerald Kelly, who presided over the hearing, the proposed rate hike was cost prohibitive and equated to a pay increase for Golden State Water Co. executives.

Golden State Water filed an application with the CPUC in July 2017 to increase rates for all of its service areas in the state beginning Jan. 1, 2019.

The CPUC is responsible for determining whether the proposed rate hike is fair to consumers. A decision is expected to be announced in December.

Golden State Water said in its application that of the additional $55 million the rate increase is expected to generate, $2 million of it will be used for performance compensation for company executives, and that’s not sitting well with customers.

“Company salary is the performance compensation,” said customer Gerald Trimble, who also balked at a plan to use $650,000 of the expected revenue for a system that allows customers to pay bills by credit card. 

“We are talking about profit here for Golden State Water,” Los Osos resident Peter Bressler echoed, calling the proposed rate hike exorbitant and unaffordable.

“We shouldn’t be looking at rate increases. We should be looking at rollbacks.”

Bressler said any increases should be passed on to the company’s shareholders and not its customers, who were hit with a rate increase this past year that was approved in July 2014 but didn’t go into effect until April 2017.

“It amounts to a denial of service,” Bressler added.

Golden State Water Co. Regulatory Affairs Manager Jon Pierotti said the company bases its rate increases on the needs of customers in a specific area, such as the Santa Maria service area, where revenue from the proposed rate hike is slated for infrastructure.

California Public Utilities Commission administrative law judge Gerald Kelly listens to public testimony during a Santa Maria meeting Tuesday. Click to view larger
California Public Utilities Commission administrative law judge Gerald Kelly listens to public testimony during a Santa Maria meeting Tuesday. (April Charlton / Noozhawk photo)

Around $23 million of the rate increase revenues would be used for capital improvements to the water system, Pierotti said, including $6.5 million for aging pipelines and $12 million for water supply.

He added that, as the company upgrades its infrastructure, the amount of federal income tax it must pay also increases.

“These are two of the more significant factors that have contributed to the rate increase,” Pierotti told the packed room.

Edna Valley resident Doug Stevens acknowledged Golden State Water has made strides in water reliability in the last decade, but said water costs at his 2,100-square-foot home he shares with his wife are getting to high to bear.

“I’m just dying with my water costs,” Stevens said, noting his bills have increased during times of conservation. “It’s really unbelievable. It’s eating our house alive.”

He, too, believes there are better ways for Golden State Water to generate revenues than implementing high rate increases, and urged the CPUC to require the water company to study other options before granting a rate hike.

“You can’t simply continue to pass the burden to we, the consumer,” Stevens said, adding residents in Edna Valley that have acre or more of land can legally drill wells for water supply, which many are considering as water rates continue to skyrocket.

Orcutt newcomer Ishmael Martinez was the last speaker of the night and said he may not be able to afford the proposed rate hike, and feels rates are already too high, especially when he’s conserving as much water as possible.

“My whole lawn is gone. I don’t have a front lawn and I am getting rid of my back lawn because of the water prices,” Martinez said. “Me and my neighbors are trying to conserve water and it’s just getting expensive. The prices on the water are just outrageous.”

He also believes Fourth District County Supervisor Peter Adam, who represents Orcutt on the Board of Supervisors, should be representing his constituents in front of the CPUC. 

Kelly, the administrative law judge, will consider public testimony from meetings and mailed comments, when deciding whether the rate increase can go forward, he said. He will also consider legal briefs expected to be submitted during evidentiary hearings slated for mid-May in Los Angeles.

The Office of Ratepayer Advocates, an independent arm of the CPUC created by the legislature to represent the interests of ratepayers, will also evaluate Golden State Water’s application, making its own recommendation later this month. That recommendation may differ from the commission’s opinion.

Visit the Office of Ratepayer Advocates' website here to view its reports, including its upcoming recommendation for the proposed Golden State Water rate hike.

Individuals who didn’t attend Tuesday’s hearing can still submit written comments to: CPUC Public Advisor, 505 Van Ness Ave., San Francisco, CA 94102, or via email to [email protected] Refer to proceeding number A.17-07-010 on all correspondence. 

Golden State Water’s rate increase application to the CPUC can be viewed online here.

Noozhawk contributing writer April Charlton can be reached at [email protected]. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkSociety, @NoozhawkNews and @NoozhawkBiz. Become a fan of Noozhawk on Facebook.

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