Latest Cal Water rate case includes proposal to merge water districts – that will be really bad for Chico

8 Jul

Thanks very much to the folks at Marysville for Reasonable Water Rates for staying on top of Cal Water’s incessant vampire demands. I have tried to get information online and have made various phone calls but come up with years old news and endless recordings referring me to other numbers with endless recordings referring me to other numbers. The Marysville  people have actually filed a formal complaint to the CPUC – that’s a lot of paperwork, not to mention, mileage on your car, hours spent on the phone, etc. 

I do not have a copy of the latest rate case, but here’s a report from Marysville. I’ve highlighted information that should give Chicoans a jolt. 

From the folks at Marysville for Reasonable Water Rates Facebook site:


Let’s start out with a little history lesson. Cal Water rates have no where to go but up and up!! In 2011 Cal Water raised water rates in Marysville 53%. Cal Water filed a General Rate Increase and wanted an additional 47%. At the end of the day, after a Formal Complaint was filed with CPUC, and Marysville fought back, we saw an approx. 11% increase. Now Cal Water wants an additional 20% increase. 53% + 11% + 20% = 84% increase in 5 years!! HOLY MOLY!! Not to mention the WRAM surcharge etc.

There are a couple of things that jump out at you in the General Rate Case application that Cal Water filed last week. They want to consolidate operations and rate-making with Marysville, Chico, Oroville and Willows districts. If the consolidation is approved by the almighty CPUC, Marysville rates would increase by approx. 26%. Hold that thought!!! Think about it!! Does that seem to be in the best interest of Marysville? NO!

The GRC states that Cal Water will use 108.3% for infrastructure. Now everyone needs to keep their cell phones handy and snap a picture if you see Cal Water replacing any pipes under Marysville streets.

And to add insult to injury, we included the salaries of the top executives for Cal Water. YOU are paying for those. Including the $500,000 incentive award for the CEO. HOLY COW!! Just think of how many water pipes they could replace with that.


Are you going to sit there and say nothing about consolidating with other cities (most of which have higher water rates)? Are w going to file another Formal Complaint? Is it time to take the signs out of storage and unite?


1.8%- 2018
1.0%- 2019

The Application
The CPUC requires Cal Water to submit GRC applications every three years to ensure that water rates accurately reflect the cost of providing water service. As part of its GRC, Cal Water has proposed consolidating operations and rate-making for its Chico, Marysville, Oroville, and Willows Districts to improve affordability and develop administrative efficiencies.

With Consolidation – If this consolidation is approved by the CPUC as proposed, Cal Water requests revenue increases for the consolidated district of $6,545,081, or 20.3%, for 2017, $676,337, or 1.7%, for 2018 and $960,412, or 2.4%, for 2019. With consolidation, the total revenue increase over the three years would be $8,181,830 or 25.4%.

Without Consolidation – If consolidation is not approved, Cal Water requests revenue increases for its Marysville District of $593,654, or 16.3%, for 2017, $77,574, or 1.8%, for 2018 and $41,081, or 1.0%, for 2019. Without consolidation, the total revenue increase over the three years would be $712,309 or 19.6%.

Cal Water has been providing water to California communities for nearly 90 years, and many of the facilities used for water service have reached the end of their useful lives. For the Marysville District, Cal Water’s requested increase reflects some of the following components:
_ 3.9% of the increase is for projected water supply costs
_ 108.3% of the increase is for water infrastructure improvements
_ -12.2% of the increase is for projected operation and maintenance expenses

The following table shows the base salaries for each executive for 2013, 2014, and 2015:
These increases are intended to compensate the individuals for job performance and overall leadership while being within the “competitive range” of the market data for target total cash compensation for similar positions (“competitive range” is described in more detail above and below).
Martin A Kropelnicki $ 640,000 700,000 $ 770,000
Thomas F. Smegal 360,000 381,600 390,000
Francis S. Ferraro 409,000 423,315 432,000
Lynne P.McGhee 235,000 243,000 265,000
Paul G. Townsley 310,000 325,000 335,000

CEO Pay Overview
Mr. Kropelnicki, the Group’s CEO since September 1, 2013, made significant contributions to the Group’s performance in 2014. Based on the 2014 performance objectives. granted Mr. Kropelnicki an equity incentive award with a value of $500,000 for 2014. With a 2014 base salary of $700,000 and his $175,000 short-term incentive compensation bonus (representing a payout of 100% of target for 2014), his total compensation for 2014 was $2,812,657 (as reported in the Summary Compensation Table), which is higher than his 2013 compensation of $968,383 (which included compensation prior to his appointment as CEO). Mr. Kropelnicki became the Group’s CEO on September 1, 2013, and, as such, his 2013 compensation primarily was for his service and contributions.

While all of the above is shocking, the proposal to merge districts is what Chico should be concerned about.

The reason it would be bad to consolidate districts is that Chico enjoys far lower costs than any of the surrounding towns. The rate increases these towns have seen dwarf ours by a mile. The water company knows places like Oroville and Marysville aren’t going to take it much longer, not to mention, their increases have already been declared onerous and excessive by the appropriate state boards and agencies. Local government officials up and down the state have chimed in that the water companies are taking rude advantage of their constituents in the more rural areas, so the water companies are looking to spread the pain.

If you think our rates have been unfair in past, just get ready for a jack boot to the rear-end Chico.

I’ll ask, when will Chicoans be ready to take some signs down to the Cal Water Office on Dr. Martin Luther King Drive? I have old Measure J signs, they are still perfectly good. I am not above turning them inside out and stenciling “Cal Water Employees pay your own benefits” on them and handing them out to anybody who will post them next to their meter box.

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