I’ve been working on my protest letter to the CPUC. I always start by gathering information, below is my notes mess.  I think I’ve got enough peanut butter and jelly, time to mash it all into a sandwich.

I was talking to an old friend, a guy who’s owned a popular business in town for years, and who bought an old apartment house for his home.  Sure he’s got a water bill. But he had no idea, expressed real shock – Cal Water pays dividends to their investors. In fact, their shares became so valuable back in about 2011 that they did what is known as a “stock split” – they divided their shares all in half, not only because they wanted to have more shares to sell, and therefore raise the price through demand, but because the individual share price was “ either too high or are beyond the price levels of similar companies in their sector.”  See below.

I was just looking over the list of Cal Water salaries – their “low” salaries are over $70,000/year. And, so far as I can tell – go ahead and chime in if I am wrong Jenny – Cal Water employees pay little or nothing toward their pensions or benefits. 

So, if Cal Water really needs money for infrastructure improvement, as they say, I would say it’s in the best interest of the investors and the employees if they both come together to find the money between themselves before they turn on the ratepayers again. They are about to kill their Golden Goose. Cities all over the state are talking about eminent domaining their water companies, including Marysville.

https://www.facebook.com/permalink.php?story_fbid=483886418437712&id=176321489194208

I’ll be working the notes below into a letter to the CPUC when I can  get to it. I’ll post it here when it’s done.

• public advisor’s office
• name and contact info, 
• proceeding info,
• grounds for protest
• effect of application on protestants – higher rates for water lead to degradation landscaping, lowering of property values, onerous costs for removal of dead trees,  and higher energy bills

1. despite lowering our consumption, our bills have doubled, even tripled. 
2. degradation of landscaping and property values
3. degradation of rental value 
4. dying trees cause a safety hazard and will cost thousands of dollars to remove safely
5. loss of protection from sun means higher energy bills for ourselves and our tenants

• reasons why application may not be justified – employee costs and investor dividends are too high to justify increasing rates

1. Employee costs.  Notice from 2013:  “Based on water usage patterns in your area that have decreased significantly since Cal Water’s last filing, if the CPUC approves Cal Water’s proposed application, rates would increase the typical residential customer’s monthly bill by $9.37, or 29.4%, in 2014; followed by additional increases of $1.76, or 4.3% in 2015; and $1.83, or 4.3%, in 2016. Most costs of operating the water system are fixed, regardless of the level of usage. With lower water usage in your area, rates then have to be increased to cover the fixed costs.”“Cal Water is proposing this change in rates due to  the following factors:
   • Cal Water is requesting $556,000 to retain the same level of employee health care, pensions, and retiree health care benefits for General Office personnel, the costs of which have increased faster than inflation.
   • Cal Water is requesting $423,000 to retain for district personnel the same level of employee benefits described above
   • Cal Water is requesting $415,000 for the allocation of General Office operation expenses
   • Cal Water is requesting $395,000 to retain quality employees in the district
   • Cal Water is requesting $163,000 for water infrastructure improvements between 2013 and 2016

   “Approval of the proposed rates would allow Cal Water to continue to maintain the system of water supply sources, pipes , tanks, fire hydrants, and equipment needed to provide safe and reliable water service.”

2. salaries – http://www.salarylist.com/company/California-Water-Service-Salary.htm

• http://ir.calwatergroup.com/Stockholder-Tools/Dividend-History  –  shows a “stock split” in 2011 
• from Investopedia –  http://www.investopedia.com/ask/answers/113.asp#ixzz3o6eCR8q2   – “A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.A stock split can also result in a stock price increase following the decrease immediately after the split. Since many small investors think the stock is now more affordable and buy the stock, they end up boosting demand and drive up prices. Another reason for the price increase is that a stock split provides a signal to the market that the company’s share price has been increasing and people assume this growth will continue in the future, and again, lift demand and prices.”
•  http://www.nasdaq.com/symbol/cwt/dividend-history
• http://www.wyattresearch.com/article/best-utility-stock/

Tags: Cal Water employee costs, Cal Water rate hike, Cal Water salaries, Cal Water stockholder dividends