SJWC Rate Increase maybe all wet, but CPUC has other "Hot Potatoes" !

We seem to be getting too many 

"Hot Potatoes" 

is CPUC too friendly with the Utilities?

Will the increasing criticism of CPUC delay a decision or prevent the commissioners, from improving the terms that SJWC will get on the Rate Increase (GRC A1201003)?

We are again confronted with an apparent lack of transparency and openness. We are faced with questions of potential professional integrity and whether CPUC is representing Ratepayers in an unbiased manner? What is fair and reasonable for a utility to provide either directly or indirectly through third-parties, to a government agency and it's staff and officers. This includes meals, trips, seminars that are provided to CPUC staff that is supposed, to regulate the utilities, in California? Will these possible "gratuities" have any effect on the decisions of CPUC?

This is without raising the embarrassing questions about using what is typically supposed to be working time to attend international seminars, all expenses paid? Does the "gain" from the "gratuities" need to be declared, for Federal and State taxes? It's about time we need CPUC to lead the state, I believe, in setting higher standards for integrity and ethics.  There should not be a concern on the part of the California's ratepayers that CPUC's decisions and rulings are biased in any fashion and made with awareness that a key important part of CPUC's Mission is to represent the States ratepayers and regulate the utilities.

Do we need to have a Ethics Overview Committee? To review the actions of CPUC? Composed of Ratepayers? Most cities have citizen oversight committees, of the police, why not CPUC?

Some quotes to keep in mind as we hopefully try to create an open, unbiased, transparent CPUC, for the both Ratepayers and the Utilities, of California, click on the quote to visit the source:

California Public Utility Commission 

"The CPUC regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation companies, in addition to authorizing video franchises. Our five Governor-appointed Commissioners, as well as our staff, are dedicated to ensuring that consumers have safe, reliable utility service at reasonable rates, protecting against fraud, and promoting the health of California's economy."

"Working For You: Commissioners and Staff  

The Governor appoints five Commissioners for as President. Commissioners make all policy decisions, usually meeting twice a month to vote on issues noted on a public agenda. 

In order to fulfill its role in overseeing services that are essential to the lives of Californians, the CPUC employs a dedicated staff of analysts, economists, engineers, administrative law judges, accountants, lawyers, safety and professionals. It also has a Division of Ratepayer Advocates, an independent division that represents consumers in CPUC proceedings."

California Public Utility Commission - Office of Ratepayer Advocates (DRA)

ORA'S Mission 

Our statutory mission is to obtain the lowest possible rate for service consistent with reliable and safe service levels.  In fulfilling this goal, ORA also advocates for customer and environmental protections.

U.S. Supreme Court definition that has been repeatedly referenced in past Commission decisions: 

United States Supreme Court 

The United States Supreme Court has broadly defined the revenue requirement of utility companies as being the minimum amount which will enable the company to operate successfully, to maintain its financial integrity, and to compensate its investors for risk assumed. Note 7

 Note 7, D.92366 (1980) 4 CPUC 438; D.86794 (1976) 81 CPUC 53; 

It makes me wonder when confronted with a Utility requesting a 44% increase, reducing to about 39% when ORA pointed out obvious items that needed adjustment, then DRA/ORA recommends a bit more than 10%, the the ALJ's (after over two and a half years) Proposed Decision is roughly 22%. Which is over twice the inflation rate! Please keep in mind the CPUC Commissioners may change the Proposed Decision. 

We the Ratepayers have 30 (less than) 15 days to let CPUC, Public Officials and the Press/TV aware of our concerns.  As well both SJWC and ORA/DRA.

Please send email, as noted in the closing paragraphs,

time is running out, to make your opinion heard!

 If you are concerned about these issues, send email to CPUC at: District 5 United eForm eMail  Simply click on the "eForm eMail" and you will get a page to fill out the information and specify the reason for your opposition to the SJWC Rate Increase, the continuing refusal to open and transparent about their expenses and operations, Express your concern about CPUC's apparent biased position and practices working with the utilities, as well as losing sight of their responsibility to us the Ratepayers. 

Comment by the blogger James Hunter:

"We have a 6 Billion dollar proposed state bill to build infrastructure more dams and reservoirs, hopefully, and we should look hard at items that won't store or directly save water. Lets make sure the bill spends our tax money wisely, we can be sure there will be another drought and being prepared should be our goal! Let's attach a requirement for providing and disclosing public information on all matters concerning CPUC. Let's look at the expenses, travel and gratuities enjoyed by CPUC Commissioners and management.

I'm also opposed to effectively a monopoly utility having ratepayers guaranteeing their profits, in spite of other conditions and especially the "cloak of secrecy" SJW Corp. and other utilities invoke. In the spirit of disclosure, I am a shareholder in SJW Corp., I've owned ten (10) shares for over a year."

You can also send an email to CPUC Public Advisor public.advisor@cpuc.ca.gov  The Public Adviser will insure your email will be sent to all the appropriate CPUC staff members.

Other people to drop an email (note) and express your opinion are:

• Scott Herhold, San Jose Mercury News, sherhold@mercurynews.com

• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com

CPUC may vote on August 14th, SJWC Rate increase!

The earliest the CPUC can rule is 14 August 2014, at the scheduled CPUC Business Meeting. We (ratepayers) won't know until the earliest 4 August if it will be on the agenda. Below is the notification on the CPUC website and the entire proposed decision:

"TO PARTIES OF RECORD IN APPLICATION 12-01-003: This is the proposed decision of Administrative Law Judge Wilson. Until and unless the Commission hears the item and votes to approve it, the proposed decision has no legal effect. This item may be heard, at the earliest, at the Commission’s August 14, 2014 Business Meeting. To confirm when the item will be heard, please see the Business Meeting agenda, which is posted on the Commission’s website 10 days before each Business Meeting."

Parties of record may file comments on the proposed decision as provided in Rule 14.3
of the Commission’s Rules of Practice and Procedure.

The public (ratepayers) can attend the business meeting and speak, as well CPUC may discuss and decide privately, then announce the results and possible changes to the proposed decision. See the procedures at: 

Guide to the Commission Meeting and Meeting Agenda

We still have potential issues with the GRC:

1. The rate increase, of 22%, is more than twice the inflation rate and it's obvious SJWC will use the drought and our conservation to charge more for less water, to protect their profits.This was confirmed in a statement by John Tang, Director of Government Relations at San Jose Water Company, 
   
   "The company will seek reimbursement for its lost profits, which will require a temporary rate increase, he said. In 2009, similar conservation measures at the end of the last drought cost the company $5.6 million in lost water sales, and it temporarily raised rates by 2.5 percent for one year to recover them." Read the entire article at the website."
2. SJWC is still using the corporate "cloak of secrecy" provided by being a 100% wholly owned subsidiary of SJW Corp., to prevent ratepayers from seeing what is happening and what they are spending. For example in a recent interview, by KTVU 2,  John Tang and a recent Homeserv USA solicitation was shown, it was stated that over 12,000 SJWC had signed up for the insurance. If so that's $4.95 x 12 = $59.40 annually per customer or $712,800 annual premiums and SJWC probably gets $71,280 at least presently.
3. SJWC is continuing to try to de-couple water sales (revenues) from the cost of operations, the proposed decision denies the de-coupling. In a previous post to this blog I quoted:
   
   "Furthermore, the results of these programs, including the advantages and disadvantages to water utilities and their customers, has not been fully analyzed, so that the Commission can determine which sales risk mechanism best serves the interests of utilities and their customers. As the current dry years persist, and the need for conservation of water resources continues, the Commission will consider in SJWC’s next GRC, if not before, whether SJWC’s current Monterey-Style WRAM is a useful water conservation mechanism that balances the risks of lost or increasing sales between the utility and its customers."
   
   I concluded that we are in a holding pattern and CPUC could decide to allow SJWC to use a, full WRAM (Water Revenue Adjustment Mechanism), to guarantee it's revenues and profits, in spite of potentially inefficient operations, fixed costs not being controlled, over building the infrastructure (filtering plants, pipelines, wells. reservoirs, etc.) all are part of the base rate that determines, "How much we pay and the more we pay for our water!". (I need to do a post showing how SJWC profit is determined--that's really a visit to OZ, in my opinion.)

We the Ratepayers have 30 (less than) 16 days to let CPUC, Public Officials and the Press/TV aware of our concerns.  As well both SJWC and ORA/DRA.

Please send email, as noted in the closing paragraphs,

time is running out, to make your opinion heard!

 If you are concerned about these issues, send email to CPUC at: District 5 United eForm eMail  Simply click on the "eForm eMail" and you will get a page to fill out the information and specify the reason for your opposition to the SJWC Rate Increase, the continuing refusal to disclose what SJWC gets for supporting Homeserv USA and continuing requests to de-couple their revenue from the requirement to do business efficiently and your concern about their lack of openness and transparency. 

A comment to readers, I'm in favor of water conservation, my concern is the potential misuse and profiting of any water utility from the drought. California goes through periodic droughts and our state wide water system is inadequate for our population. We have a 6 Billion dollar proposed state bill to build infrastructure more dams and reservoirs, hopefully, and we should look hard at items that won't store or directly save water. Lets make sure the bill spends our tax money wisely, we can be sure there will be another drought and being prepared should be our goal!

I'm also opposed to effectively a monopoly utility having ratepayers guaranteeing their profits, in spite of other conditions and especially the "cloak of secrecy" SJWC invokes. In the spirit of disclosure, I am a shareholder in SJW Corp., I've owned ten (10) shares for over a year.

You can also send an email to CPUC Public Advisor public.advisor@cpuc.ca.gov  The Public Adviser will insure your email will be sent to all the appropriate CPUC staff members.

Other people to drop an email (note) and express your opinion are:

• Scott Herhold, San Jose Mercury News, sherhold@mercurynews.com

• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com

SJWC "Proposed" Decision 22% on Rate Increase (A1201003)

ALJ Wilson filed a Proposed Decision on A.12-01-003, filing date 7/11/2014, 12:08 PM. The document with Appendixes is 153 pages long so the information in the post will be updated over several days.

Summary
San Jose Water Company (SJWC) is authorized to increase rates by amounts designed to increase revenue by $22,063,000 or 9.79% in its test year 2013, $11,579,000 or 4.72% in 2014, and $15,356,000 or 6.02% in 2015. As a result of the revenue increase granted by this decision, the monthly bill for the average SJWC residential customers using 1500 cubic feet (CCF)1 of water with a 5/8” by 3/4” meter would increase by $7.96 or 20.8% to $46.20 from $38.24 for the test year 2013. 

The initial topics, this Blog covers, will be the size of the rate  increase, Proposed Decision 
Summary page 2:

Year	SJWC Request	ORA/DRA Recommendation	ALJ Proposed
2013	21.51% (1) 18.56%	.05%	9.79%
2014	4.87%	3.73%	4.72%
2015	12.59%	5.56%	6.02%
Total	39.98% (2)	8.67%	22%

Note 1, reference Proposed Decision, page 8, Section 5.1, during the course of  discussions

SJWC and ORA agreed to use 18.56%

Note 2, percentage increase is compounded

It looks like SJWC got roughly 58% of the original adjusted request. For the year 2013 the 9.79% after adjustments based on interim increases, as well as 2014, will appear on the ratepayers monthly bill as a surcharge or credit, for previous periods that were not billed in accordance with the final CPUC Decision.

The second topic is the WRAM/MCBA, SJWC requested a full decoupling of revenue (profits) from operations/revenues. This is the "conserve, use less water and pay more for what you use".

Several sections of the Proposed Decision, page 118, Section 70:

29.3. Discussion The Commission does not adopt SJWC’s proposed change in its current Monterey-Style WRAM at this time. SJWC is correct that its current revenue decoupling mechanism (Monterey-Style WRAM) does not fully protect the utility against reduced sales, although it is also true that SJWC benefits through increased revenues from its Monterey Style WRAM when sales are increasing. While the Commission seeks to reduce risks both to water utilities and their customers from changes in sales through appropriate revenue and sales mechanisms which may help in conservation efforts, ORA is correct that similar mechanisms used by other water utilities were achieved through negotiated settlements which reflected many other considerations before these were adopted. Furthermore, the results of these programs, including the advantages and disadvantages to water utilities and their customers, has not been fully analyzed, so that the Commission can determine which sales risk mechanism best serves the interests of utilities and their customers. As the current dry years persist, and the need for conservation of water resources continues, the Commission will consider in SJWC’s next GRC, if not before, whether SJWC’s current Monterey-Style WRAM is a useful water conservation mechanism that balances the risks of lost or increasing sales between the utility and its customers. 

70. SJWC’s current Monterey-Style WRAM does not fully protect SJWC against reduced water sales. However, SJWC’s Monterey-Style WRAM also allows SJWC to benefit when sales increase. 

71. It is uncertain whether SJWCs’ Monterey-Style WRAM, rather than those WRAMs used by other water utilities, is an adequate mechanism to encourage conservation and whether it serves and balances the interests of the utility and its customers due to increased or decreased sales.

Basically this is a "holding pattern" there doesn't appear there is a decision, rather let's wait and see if the drought continues, how the other utilities that have revenue decoupling do over more time. SJWC did file an advise letter #456 and did get the MCRAMA, Mandatory Conservation Revenue Adjustment, to track the revenue impact of mandatory conservation.

I also haven't found any specific reference to how much SJWC is being paid by Homeserv USA and where the proceeds are going. ORA did oppose and recommend:

25.2. ORA ORA estimates gross revenue derived from NTP&S activities that are allocated to ratepayers to be $576,943 for the Test Year 2013, plus an additional $100,000 per provisions of Rules X.C.5 and X.C.6 of D.10-10-019

At least SJWC appears to be accounting for NTP&S activities and ORA/DRA is aware. Which ones are still an open question? Homeserv USA is not mentioned.

The next steps are:

The application and recommendation then go to an administrative law judge, in this case Seaneen M. Wilson. Once Wilson has announced her decision, the public has 30 days to comment before the CPUC votes. However, the CPUC can decide to allow an additional 30 days for comment, according to Christopher Chow, public information officer for the CPUC in San Francisco.

We the Rayepayers have 30 (actually only) 21days to let CPUC, Public Officials and the Press/TV aware of our concerns.  As well both SJWC and ORA/DRA 

 If you are concerned about these issues, send email to CPUC at: District 5 United eForm eMail  Simply click on the "eForm eMail" and you will get a page to fill out the information and specify the reason for your opposition to the SJWC Rate Increase and continuing requests to de-couple their revenue from the requirement to do business efficiently and your concern about lack of openness and transparency, as well as concerned that we are not being informed in a timely manner, of the status the water reduction recommended or mandatory!

You can also send an email to CPUC Public Advisor public.advisor@cpuc.ca.gov  The Public Adviser will insure your email will be sent to all the appropriate CPUC staff members.

Other people to drop an email (note) and express your opinion are:

• Scott Herhold, San Jose Mercury News, sherhold@mercurynews.com

• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com

SJWC Rate Increase (A1201003) A "HOT" Potato?

SJWC Rate Increase another
"HOT POTATO" for CPUC and
it's President Michael Peevey

Has Public Opinion and what has been reported, on TV and by the Press, created a very high ratepayer awareness of the San Jose Water Company requested Rate Increase and a very large number of letters and emails, to CPUC, in opposition. I know this Blog has had over 10,000 visits, since May 2013.

Where does GRC A1201003, the SJWC Rate Increase stand today?

The last action reported on the CPUC website was on April 14, 2014, EX PARTE presentation by San Jose Water Company, "On April 9, 2014, Palle Jensen, Senior Vice President of Regulatory Affairs for San Jose Water Company (SJWC), and Martin Mattes of Nossaman LLP, attorneys for SJWC, met with Ditas Katague, Chief of Staff for Commissioner Catherine Sandoval, in a conference room on the 4th floor of the Commission's offices at 505 Van Ness Avenue, in San Francisco, California. The meeting lasted about 25 minutes. No documents were provided in connection with this oral ex parte communication.  Actually the last statement on the CPUC website posting was "incorrect" SJWC submitted the request to CPUC and subsequently documented the meeting including a minimum of details.

Further information about this is available at the CPUC website at: http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M089/K640/89640856.PDF. This Blog also covers the meeting at: http://sjwc-rate-increase.blogspot.com/p/sjwc-asks-for-cpuc-to-take-action.html.

Is SJWC is laying the ground work to documenting a potential claim for losses or damages due to the delay in CPUC making a decision or is CPUC and SJWC simply waiting for the "POTATO to cool off", ratepayers loosing interest?

It seems that CPUC is caught between a rock (hopefully DRA/ORA recommendation of about 10%) and a hard spot (the ratepayers strong resistance to 44%). Apparently no one at CPUC really wants to rule on the SJWC rate increase, since the ratepayers are really upset-guaranteeing bad press for the CPUC person and CPUC.

I'm very "peeved" (click for definition-pun intended) at the glacial like slowness of the deliberations, of CPUC. I'm also unhappy with the somewhat outrageous amount SJWC requested, a 44% rate increase. It's apparent that the well paid and large regulatory affairs staff, at SJWC, apparently has also been very busy. 

Once CPUC makes and publishes a "decision", ratepayers or SJWC, have only 30 days I believe, to challenge the decision. I'm sure it's unlikely both will be pleased with the CPUC decision. We should keep in mind that the entire GRC (General Rate Increase) process will start again late this fall for the next SJWC Rate Increase.

I'm having a "peeve" (click for definition-pun intended) and I hope you are as well, if so please:

If you are concerned about these issues, send email to CPUC at:District 5 United eForm eMail  Simply click on the "eForm eMail" and you will get a page to fill out the information and specify the reason for your opposition to the SJWC continuing requests to de-couple their revenue from the requirement to do business efficiently and your concern about lack of openness and transparency, as well as concerned that we are not being informed in a timely manner, of the status the water reduction recommended or mandatory!

You can also send an email to CPUC Public Advisor public.advisor@cpuc.ca.gov  The Public Adviser will insure your email will be sent to all the appropriate CPUC staff members.

Other people to drop an email (note) and express your opinion are:

• Scott Herhold, San Jose Mercury News, sherhold@mercurynews.com

• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com