Marysville Appeal Democrat: Proposal by Cal Water to consolidate Marysville district with three others (inc. Chico) could slow Marysville rate hikes (by spreading their rates among Chico users!)

19 Jul

Cal Water consolidation could slow Marysville rate hikes

By Eric Vodden/ evodden@appealdemocrat.com | Posted: Wednesday, July 15, 2015 7:38 pm

A proposal by California Water Service to consolidate the company’s Marysville district with three others would reduce water rate increases starting in 2017, Cal Water officials said.

The water rate for a typical metered residential customer in the city would increase $2.53 a month from the current $39.21 a month under a plan to consolidate districts in Marysville, Chico, Willows and Oroville. That would compare to an $8.66 a month rate hike without combining the four company service areas.

“This is a good thing for Marysville if we can accomplish it,” said Lee Seidel, manager for the Cal Water district in Marysville.

Seidel explained that the lower number of rate payers and lack of growth in Marysville limits the ability to spread over a wider base the costs of needed system improvements. Instead, under a consolidated structure those costs would be spread over the four affected Cal Water districts.

“It would not only be a lower rate (increase) immediately, but a spreading of costs across a larger customer base,” Seidel said.

Additionally, the PUC and state Legislature have encouraged water utilities to consolidate water systems regionally to increase efficiency and spread costs, officials said.

The three-year rate proposal to the state Public Utilities Commission for 2017-19 comes just short of a year after the PUC approved a new Cal Water rate structure for 2014-16. State utilities are required every three years to file new proposed rate structures with the PUC, an 18-month process to complete.

Cal Water officials said increases in Marysville are needed to replace more than 5,000 feet of aging water lines, complete the state-required conversion of flat-rate customers to meters and install new computer servers and software. They also would pay for upgrading electrical systems at a pump station and replacing a panel board at another, officials said.

The PUC decision last August came more than two years after Cal Water applied for its 2014-16 rate adjustment. Approved was a 10.16 percent increase for 2014 with inflationary increases of from 1 percent to 5 percent in 2015 and 2016.

The decision followed a public campaign waged by a group of Marysville opponents that included campaign-style front-yard signs and opposition from some public agencies.

Marysville City Councilman Bill Simmons, prior to being appointed to the council in February, was at the forefront of last year’s public opposition to the rate increase. He said Wednesday he does not yet know enough about the particulars of the new rate case to comment.

Cal Water’s proposal to consolidate would result in a 72-cent per month Marysville district increase in 2018 and $1.03 hike in 2019. Without the consolidation, increases in 2018 would be $2.04 in 2018 and 48 cents in 2019.

It will ultimately be up to the PUC to decide whether to accept the consolidated plan that would benefit Marysville ratepayers but not necessarily those in other districts. Chico’s rates are currently the lowest of the four affected Cal Water districts.

The idea is that the consolidated rate structure, planned to be phased in over several years, would result in the four districts paying the same rate. An indexed rate increase would initially be proposed in Marysville.

Though Marysville still has just short of 900 unmetered residential customers, the 2017-19 proposal doesn’t address their flat-rate charges. It is planned that all Cal Water residential customers in the city will be converted to meters by the end of 2016, prior to 2017 rates taking effect, Seidel said.

California Water Service, required by the state to file proposed general rate cases every three years, is seeking increases in Marysville for 2017-19.

One proposal is for rates based on a phased-in consolidation of the company’s Marysville, Chico, Willows and Oroville districts.

The other would be separately for Marysville.

Monthly increases proposed for a typical metered residential customer would be:

Consolidated

Current 2017 2018 2019

$39.21 $41.74 $42.45 $43.49

Not consolidated

Current 2017 2018 2019

$39.21 $47.87 $49.91 $50.38

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