After a brief overview of the company,
GSWC vice president Patrick Scanlon turned the microphone over to
the people. Few speakers gave their names and the most common complaint
voiced was the meter charge that Golden State bills to customers.
Scanlon explained the Public Utilities Commission sets water rates
based on meter size. Most Ojai customers have 1/2- or 3/4-inch meters
and use about 20 Ccf of water per month, or nearly 15,000 gallons.
Scanlon said that the term meter charge is more of a service charge
in which many fixed costs are supported. “Fixed costs incur
from no water usage at all, such as investing in infrastructure and
paying employees,” said Scanlon.
“The meter charge is not just the meter cost, it’s systemwide:
the pipe coming to the house, all the systems in the ground and the
cost of the equipment we must recover,” said GSWC vice president
of regulatory affairs, Keith Switzer. He said the PUC sets rates based
on meter size ratio, allowing private water companies to recover their
operating costs, which include employee pay and materials.
When asked why other local water providers charge less for both equipment,
such as meters, and water, Scanlon replied, “We are charging
all the cost of operation on our bill that they do not, such as property
taxes. They have supplemental revenues or tax deferrals” to
offset those costs.
One woman said she suspected she knew the reason the rate increase
request was so high. “PUC can set rates anywhere and someone
will negotiate that down and then it will be like, oh great, they
saved us so much money. But that’s baloney.”
Several people complained of poor infrastructure and water quality.
One man said the gate valve procedure to exercise pipes for customer
supply and hydrant efficiency has been inadequately managed. “That’s
one hundred percent correct,” Scanlon agreed. “We have
not maintained equipment as we should have and are working to improve.”
“I’ve lived in southern California for 30 years and Ojai
for the last four years,” said Jeannie Barnett. “I was
very shocked when I got my first water bill, I went to the water company
to see if it was a mistake. The lady very nicely told me they could
turn off my meter.” Barnett added that it is embarrassing when
she has company and the water is brown. “I have to go out and
buy water because of dirty water coming out of the taps.”
“Do you consider the water drinkable?” a young woman asked
Scanlon.
“Yes, it meets and exceeds water quality standards,” replied
Scanlon. “Are you talking about taste and odor?” He said
that 85% of the local water supply comes from five wells. The water
is high in iron and manganese, which can darken the water and add
an unpleasant odor.
Frank Heldman, operations superintendent of Golden State in Ojai,
said that a manganese filtration plant has been in place for approximately
four years and encouraged customers to talk to him if they have a
water quality problem. “All we can do is act on today’s
information. That’s the only way we can improve,” said
Heldman.
“My water bill is the highest utility I have. It’s higher
than my electric bill, my gas bill, or my cable bill, some of them
combined,” one man complained. “You’ve got me in
a bind and now you’re asking me for more money and I don’t
know whether you have me in mind or just your stockholders.”
“Would you be willing to publish in the paper what your shareholders
earn?” a woman asked.
“It’s a matter of public record,” Scanlon replied.
Several speakers, customer Mark Williams offered, “Your financial
reports show per share profits as 98 cents in 2005 and $1.49 in 2006.”
Williams was referring to a March 15 news release for American States
Water Company, of which Golden State is a subsidiary.
“Shareholder investments are paying for improvements,”
Scanlon later said. In the rate application fact sheet handout provided
during the meeting, Golden State referenced as a reason for the rate
proposal the “opportunity to earn a fair rate of return on shareholders’
investment in the Ojai water system.”
Addressing questions regarding water hydrants that were inoperable
for firefighters’ needs in January, Scanlon said that Golden
State would never purposely turn off gate valves to a pipeline. “The
most probable cause was a recent leak,” said Scanlon. “Workers
turned all the valves off and they didn’t get them all turned
back on. We are trying to move forward and we have to check every
valve and every pipe.”
“I don’t hear any concern for people on fixed incomes
or for whether we try to conserve,” one woman commented. She
said that other utilities offered programs to help customers reduce
costs.
“We have a similar type program in our water company that we
have proposed for this area in this applications,” Switzer replied.
Golden State uses this program in its other regions and have requested
to enact in it Ojai with the rate change application. Customers would
qualify for water rate discounts based on income and household size.
Several audience members bypassed the line to speak and instead shouted
out questions and comments from their seats. Others groaned or laughed
at the answers. Many supported the idea of the city exercising eminent
domain, taking the water company and forming a public utility.
“To summarize what you’ve said this evening,” one
woman spoke into the microphone near the end of the meeting, “your
service is unacceptable, your water quality is unacceptable, your
equipment is unacceptable and your rates are outrageous. When our
neighbors are paying 22 dollars a month and my water bill is 300 a
month, rain or shine, whether I’ve used water or not, I’m
outraged.”
Public Utilities Commission officials were not at the March 19 meeting
because, according to PUC public advisor Norm Carter, their commission
has planned a public participation hearing on May 10. That meeting
is at 7 p.m. at the Chaparral Auditorium.
Golden State’s town hall meeting was part of the application
process in which customer information and input is heard. The PUC
meeting will be presided over by a commission administrative law judge,
with rate payer advocates and water company representatives likely
in attendance. They will give brief summaries of the application and
process then proceed to the public commentary. A transcript of the
May meeting will be made available.
“The best public comments are solid facts,” said Carter.
“Nobody wants a rate increase, but concrete arguments are needed.”
Carter suggested the public address issues such as equipment, maintenance
or revenue management as subjects the commission would use in considering
the application.
As far as concerned customers, Carter said, “My best advice
to them is talk to the utility company.” He added that comparison
of rates between water companies is a commonly raised issue to the
PUC. “The majority of water companies in this state are not
regulated by the commission.” The reason for this is the variation
between water companies that can also make a huge difference in rates,
even when they are in the same geographical location.
Carter confirmed that municipal water companies and water districts
are subject to different regulations than private companies, such
as Golden State. A lot depends on how water is procured by each company,
such as whether the water is purchased from a private source or collected
in wells or reservoirs.
For more information about the May 10 meeting, call the public advisor’s
office toll free (866) 849-8391 or email public.advisor.la@cpuc.ca.gov.
Reference the Golden State application number 07-01-013.
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