CLEARLAKE — The City of Clearlake has sent a letter opposing a rate increase proposed by Golden State Water Company (GSWC). The council”s letter is to be filed with the California Public Utilities Commission (CPUC) as a comment.
GSWC has submitted a request for rate increase for cost of capital for 2009, 2010 and 2011. The proposal would increase the average customer”s rate from $68.95 to $71.91, or by 4.3 percent. If the request is approved, the rates in each GSWC service territory will be increased to reflect the proposed cost of capital beginning on Jan. 1, 2009.
The council has assessed that the proposal is excessive and that denying the proposed rate increase is in the public”s interest.
The City of Clearlake does not govern operations of the local water providers. Councilmember Roy Simons said that he didn”t think that the council should be involved with the proposal being requested by the water company.
Councilmember Judy Thein disagreed. “Although we have no control over it, we should show our support of our citizens,” she said.
GSWC has filed two applications for rate increases since May. One application was a general rate filing. The general rate filing pertains to service territory in Southern California. Due to new rules established by the CPUC the water company was required to separate its general filing application from its cost of capital application. According to John Dewey, GSWC community education manager, rate payers in Clearlake were sent a notice of the general rate filing because the application identifies covering costs for the general office headquarters located in San Dimas. However, if approved, the general rate filing is not expected to directly affect customers in the Clearlake area.
The other application, which the council deems to be excessive, concerns an increase for to authorize cost of capital.
“We believe that this request is in line with what other utilities are receiving for cost of capital,” Dewey said. “We reinvest $1 for every $3 of revenue throughout our service areas to improve water systems, pay off debt and provide shareholders with a fair return on investments.”
Dewey continued, “This helps the company maintain a good credit rating and borrow money at lower costs. If approved, this will help us maintain a solid financial foundation to insure that we can maximize water quality and conservation.”
According to Dewey, since 2005 GSWC has spent more than $1.6 million on capital improvements to its distribution system in Clearlake and its treatment plant in Sonoma. “We are taking a leadership role by aggressively investing in infrastructure improvements to provide safe and reliable water service,” Dewey said. “The Clearlake drought conditions make it imperative that we do all we can to protect water supplies and encourage our customers to conserve.”
Dewey said that GSWC welcomes comments from the public in regard to the proposal. Rate payers may send their comments to the CPUC”s Public Advisor”s Office at 505 Van Ness Avenue, Room 2103, San Francisco, CA 94102. The office may be contact via telephone at (866) 849-8390 (toll free) or (415) 703-2074; TTY (866) 836-7825 (toll free) or (415) 703-5282; or by e-mail at public.advisor@cpuc.ca.gov.
Contact Denise Rockenstein at drockenstein@clearlakeobserver.com.
