Cal Am gets okay for rate hike

Pacific Grove resident Katsuri Ragan repurposes water he uses while taking a shower amongst other thing to save water.

“When I wash vegetables I save the water and then use it for the yard,” said Rangan. “It’s the right thing to do.”

But because of his efforts to save water, along with thousands of others on the Monterey Peninsula, he will see a higher bill next year.

“The cost that the commission approved today are necessary costs to run the water system,” said Catherine Stedman, California American Water Manager of External Affairs.

California Public Utilities Commission approved a plan allowing CalAm to collect $39 million in lost revenue due to its customer’s conservation efforts during the drought in 2013-14.

“The cost of running a water system are mostly fixed, said Stedman. “So if people use less water, the cost to deliver the water, to treat the water, to keep the infrastructure in good condition does not go down correspondingly.”

The average single family residential bill will go up by about $20 a month. Forty dollars for commercial and non-residential customers and $9 a month for those who qualify for CalAm’s low income program.

“That is out of the question, $30 per month is too much,” said Rangan. “I pay less than $50 per month right now.”

CalAm said another change on the way is simplifying their complex rate structure.

“For residential customers we’ll stay on a five tiered system,” said Stedman. “But the amount of water allowed at each tier of that rate structure will now be the same for all customers.”

CalAm said the rate change is expected to start March 2017 and it will last for five years.

ORIGINAL STORY: The California Public Utilities Commission ruled Thursday that California American Water can move forward with rate hikes to collect nearly $40 million in lost revenue.

The company’s $39.8 million shortfall was due to water conservation by customers in 2013 and 2014. The company argued that while customers were using less water, its maintenance and infrastructure costs had remained unchanged.

The bottom line: Cal Am customers will pay more for water service over the next five years. The company says the ruling will add about $20 a month to the average single family residential bill and about $40 per month to most commercial and non-residential customer bills.

KION’s Maya Holmes is following the story and will have a complete report tonight at 5 and 6 on KION 5/46.