Caution: rising water rates

Back in September 2001, while most of the country’s attention was focused elsewhere, the California Water Service Company filed a request with the California Public Utilities Commission seeking to raise the water rates of Chico residents by more than 36 percent over the next four years.

The question now is: Does anybody care?

That’s what the few residents who have come out against the proposal are wondering. At a sparsely attended public meeting held Jan. 9, only a handful of people showed up to speak against higher rates.

Although there has been a lack of publicity surrounding the issue—some residents at the meeting criticized the water company for sending out announcements only a few days before the only locally scheduled meeting—it could also be that Chicoans simply don’t mind paying a little more for water—about $80 a year for the average family, if the increase is granted.

The company says it needs the extra $1.8 million the increase would generate to cover the rising cost of providing service. Mark Lightcap, Cal Water district manager, said the higher cost of electricity used to pump groundwater out of the 67 wells that provide water for Cal Water’s 24,000 local customers was hurting the company financially.

“The cost of power has put a real dent in our earnings,” Lightcap said. “A third of this [increase] is PG&E, and we don’t earn a penny on that.”

Lightcap said CPUC rules tie power costs to water prices, so that when the cost of electricity goes up or down, water prices must follow the fluctuations dollar for dollar.

Another large chunk of the increase will pay for construction costs for the company’s new headquarters on Whitman Avenue.

Built to replace and consolidate the two, overcrowded buildings the company now operates out of off The Esplanade, the new structure cost $2.8 million and accounts for almost 15 percent of the proposed increase, Lightcap said.

“There’s no problem showing the need for it,” he said. “In our customer service building, there’s files stored up to the ceiling in the men’s bathroom, [and] our operating center building has been contaminated by mold, so we can’t use that.”

The company also insists the need for increased testing and treatment procedures, mandated by new state and federal laws, has driven up operating costs.

Even those who have been vocal in their opposition to the increase don’t begrudge the company a few more dollars a month. Dave Murray, who spoke against the hike at a recent public meeting, said a small increase was probably justified, but shelling out over 20 percent more for water over the next year alone just doesn’t seem right.

“I’m sure they deserve certain raises, but the amount they’re asking for is just incredible, in my opinion,” Murray said, noting that, although Cal Water hasn’t raised rates in eight years, it’s now asking for the maximum increase that state law allows.

“There’s a lot of people on fixed incomes, and it’ll be hard on a lot of people,” he said, “especially in a time of recession.”

Another reason for the lack of organized opposition to Cal Water’s proposal may be that hardly anyone, Cal Water executives included, actually believes the company will get the full amount it is asking for.

While the CPUC itself does not comment on pending decisions, Sung Han, who works as a public advocate in a separate branch of the CPUC, told those at the public meeting that Cal Water probably would not get the full increase.

Lightcap is also quick to point out that, even if the increase does go through, Chicoans would still be paying competitive rates for water, compared to some neighboring counties. In Sacramento, where water is provided through a city utility, residents pay between $12 and $20 per month, depending on the size of their household. But in parts of Yuba county, residents now pay almost $30 a month, and the company that provides the water says it will probably try to raise rates again in the future.

According to the CPUC, Cal Water is hardly the only utility in California asking for higher rates to offset the cost of electricity. In an e-mail response to a reporter’s questions, CPUC spokeswoman Sherri Inouye said, “The Commission anticipates that all of its water utilities that pump groundwater will eventually raise rates. If the request is reasonable and the utility is not overearning its rate of return, these costs will flow through into rates.”

The CPUC will begin to evaluate Cal Water’s request in early February and will probably make a decision by this fall. Public comments can still be made by e-mailing the commission at