State law requires electric and gas companies to post their petitions for rate changes—so-called advice letters submitted to the California Public Utilities Commission—online for public review. A new bill would extend that mandate to water utilities as well.
SB 959 authored by state Sen. Jim Beall (D-San Jose) came in response to demands from Silicon Valley water customers for greater transparency. Now, the San Jose City Council will vote on whether to formally support Beall’s bill, which would require water corporations with 10,000 or more service connections to keep an online archive of all pending, approved or rejected advice letters.
A grassroots activist group called WRATES—short for Water Rate Advocates for Transparency, Equity and Sustainability—has been pushing for stronger accountability measures like SB 959. Rita Benton, one of the group’s founders, said that while the bill is a step in the right direction, it doesn’t go far enough.
But at least it will help customers keep better track of all the billing hikes that the San Jose Water Company—an investor-owned utility that serves most of Santa Clara County—tries to pass off on customers between its triennial rate increases. Currently, the water company keeps advice letters online for only a month, so it’s hard to get a clear picture of historic rate increases. Click here to take a look at the company’s advice letter archive, which this time includes an advice letter to actually lower rates by $5.83 million.
When WRATES was just getting off the ground last year, organizers had to submit formal records requests for hard copies of the advice letters with help from the city of Saratoga. Those documents helped the group come up with the most accurate estimate to date of billing hikes by the private water company, which upped the cost to customers by 73 percent from 2014 to last year partly because of all the advice letters it submitted to the CPUC between its general rate increase petitions.
In 2017 alone, WRATES determined that the CPUC approved four advice letters that allowed San Jose Water to up customer costs by about 12 percent. Click here to check out the advice letter archive compiled by WRATES.
More from the San Jose City Council agenda for April 10, 2018:
- The owners of a Shell gas station at the northwest corner of Berryessa Road and Lundy Avenue want to expand it by adding a new drive-through car wash, a new 3,200-square-foot convenience store and a separate 2,490-square-foot retail building. The Planning Commission unanimously recommended that the council approve the proposal, which, according to the city, won’t need an environmental review.
- San Jose’s Parks, Recreation and Neighborhood Services Department seeks $3.75 million to hire five consulting firms to help manage some of its 150 capital projects funded by $300 million in parkland fees paid by developers. The consulting firms will help the parks department come up with plans and studies for its capital improvement projects through 2023.
WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260
San Jose Water encourages greater transparency, which is why we have a long-standing practice of posting all pending Advice Letters online. But this story does not accurately reflect the purpose of an Advice Letter.
You state the following, ” Those documents helped the group come up with the most accurate estimate to date of billing hikes by the private water company, which upped the cost to customers by 73 percent from 2014 to last year partly because of all the advice letters it submitted to the CPUC between its general rate increase petitions.”
However, Advice Letters are used as the mechanism for implementing rate changes that have been previously approved by the CPUC as part of our General Rate Case. The process water utilities are required to follow starts with the submission and eventual approval of a General Rate Case, which includes proposed rate adjustments. Once the GRC is approved, a water utility is then required to file an Advice Letter, to implement the rate increase proposed as part of the GRC. The letters aren’t intended to circumvent the process but are an integral component of the process for thoroughly considering any proposed adjustment. In addition to this use, Advice Letters are also required when circumstances beyond our control impact our rates. For example, our water wholesaler Santa Clara Valley Water District implements its rate increases at the beginning of their July fiscal year. Those rate increases are then passed through without mark-up. To receive permission to make this change we must communicate the SCVWD’s proposed rate increase and its impact on customer rates using another Advice Letter.
As always, we encourage you to reach out to us in the development of your story to help you better understand the process the CPUC requires regulated utilities follow in implementing their decisions.
Jayme Ackemann
San Jose Water