SJWC is requesting $150,000,000 yes SJWC that's $150 million dollars, reference A1508016

A1508016 ACTIVE

August 21, 2015

San Jose Water Company

Application of SAN JOSE WATER COMPANY (U168W), a California corporation, for an order to authorize the issuance and sale of additional debt and equity securities not exceeding the aggregate amount of $150,000,000 and other related requests.

ALJ: Adeniyi A. Ayoade (Assigned Aug 28, 2015) COMMISSIONER: Catherine J.K. Sandoval (Assigned Aug 28, 2015)

San Jose Water Company has certainly “quietly” handled this request to CPUC to raise $150,000,000 for a variety purposes. The SJWC Application is available online from CPUC. In particular it was requested that Public Notice is not necessary, see page 11. Again parts of the application were served to CPUC, but were not published. We continue to see SJWC apparently try to obscure information from the ratepayers or make it difficult to obtain, in my opinion. It should also be noted that the $150.000.000 would pass through apparently, SJW Corp., since SJWC supposedly the recipient of the funding, it raises the concern about the use of the funds for purposes other than SJWC. Note, the comment quoted below "use of proceeds for acquisition of existing water systems"? SJW Corp. using proceeds to buy another water system in California or Texas? I generally get concerned when there's an apparent limited visibility into operations that may affect the use of funds and potentially result in rates being increased, in the future.

This appears to say that there will be no rate increases, oops! Reading carefully it says this doesn’t propose a rate increase, so no notice to customers is required. It seems difficult that spending $150,000,000 will not have an effect on rates, either in the ROE 9.99% calculation or in “guaranteed” 8.08% profit. . . . . It does say that, "above those authorized by prior Commission decisions". Sounds to me that it's a two step strategy, (1) get CPUC approval or have a Full WRAM and the second step is to RAISE RATES! I'd appreciate readers comments on this understanding, of the application verbiage.

The schedule proposed by the applicant, SJWC, is quite aggressive. Presently nothing has been posted on the CPUC website since October 5, 2015 when the ALJ requested a reply within 15 days, oops! that was 10/20/2015 and there has not been a response from SJWC. That's 34 days late apparently, unless this was a confidential response.

I really appreciate that we the ratepayers may be funding the acquisition, of another water company or as the application says "acquisition of existing water systems", with some part of the $150,000,000. Who is the existing water system? Great Oaks Water Company or the remaining part of the City of San Jose  water system?

The ALJ has requested clarification of certain financial estimates in the Ruling dated 10/05/2015, “ADMINISTRATIVE LAW JUDGE’S RULING DIRECTING APPLICANT TO FILE A RESPONSE TO INFORMATION REQUEST WITHIN 15 DAYS”.

So, we find ourselves as ratepayers looking forward to a Happy Thanksgiving and again we’ll be getting the bird. It really seems committing to $150,000,000 that will despite comments “probably” will affect (that means increase) our water rates.  The questions the ALJ posed were focused on where the money was supposed to be spent on, not on whether the requirements were reasonable technically. The CPUC Commissioners already classified the proceedings, “No public review or comment is required for this resolution pursuant to Rule 14.7. “.

The next questions are will the SJWC response to the ALJ Ruling be available, to the public? I own 10 shares of SJW Corp. common stock, as a shareholder (very, very, small) when will I get notice of being diluted by the sale of more stock? I thought we were starting the beginning of a new day of transparency and openness, on the part of CPUC? Oops, Governor Brown vetoed those laws.

A1508016 Proceedings are available from CPUC online.

If you're concerned about how these funds will be used by SJW Corp./SJWC send email to:

Please send email,

 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 currently contested issues 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. 

Please consider pasting the following, or parts you agree with, when you fill in the eForm:

"I am concerned about the $150,000,000 funding package that SJW Corp./SJWC has submitted an application (A1508016) to CPUC, for approval. I'm concerned about the potential effect this may have on increased future water rates, the possibility of these funds being used by SJW Corp. to fund the acquisition of existing water systems, the concern of mixing the funds within the two corporation SJW and the regulated water utility SJWC and the continuing practice making access to information by ratepayers difficult, which is apparently not fully supporting the openness and transparency that CPUC and a majority of elected officials in Sacramento appear to support."

CPUC Public Advisor public.advisor@cpuc.ca.gov  Reference San Jose Water Company (SJWC) A1508016.The Public Adviser will insure your email will be sent to all the appropriate CPUC staff members and commissioners. 

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

• Scott Herhold, San Jose Mercury News, sherhold@mercurynews.com
• Paul Rodgers, San Jose Mercury News, progers@mercurynews.com
• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com

California Drought 2011 to ???? - Fact and Fiction

How bad can the drought get? An alternate history of the "California Drought" of 2011....... is a fiction account of what could happen, in a worst case drought scenario. The book is an example of a new genre, "Apocalyptic Climate Fiction".  The big question that science can't answer is "California entering a long term drought?". Did the Anasazi civilization disappear, in the southwest, during the period 1200-1300 AD because of a mega-drought?

It becomes clear that droughts are not new to California, historically we get a severe drought every 10-20 years. The Assessment Report: Causes and Predictability of the 2011-14 California Drought" is a factual analysis prepared by NOAA (National Oceanic and Atmospheric Administration). It looks at some of the root causes, keep in mind our current 2011-? drought, is a result of many issues and factors. (links for both books are in the right column)

When the population and industry were less than a million people the rainfall was generally adequate near the major rivers, now the state population is 38.8 million and rising. Where will the water and electricity come from? A Newsweek article on 7/1/2015 covered the California Drought very well. 

We are also caught in a loss of 10% of the State's power generation as our Sierra snowpack has slowly disappeared since 2011 and two major nuclear plants are not in service or running well below normal output. The results in a potential issue of drought, but of a power shortage.

Hydroelectric power allows the state to pump the water from the rivers into the aqueducts, reservoirs and subsurface water banks and out for use. The combination of no snowpack, below average rainfall and decreasing available Hydroelectric power means Southern California is increasingly hard pressed in both areas water and electricity. 

Where is the water going? Lots of misleading information is available and published. The pie chart shows that in reality those "nasty" farmers do use water, but they are only 40% of the problem and city folks are 10%.

The state needs to put some programs to make in easier to reduce agricultural water use, rather than field flooding. Increasing the cost of water to farmers, controlling the groundwater pumping and financial support for drip irrigation and other lower water use methods of farming make sense. Do you realize those ships bring Asian goods to the California ports sometimes carry hay and alfalfa back to feed cows, for the dairy industry in Japan and China. Does it make sense to ship fodder 6,000-7,000 miles? Especially since growing both use a lot of water. Can't we find other products to load those empty ships going to Asia with?

The other 50% of the available water is controlled by the Federal Government and the State (in part because of the ecology lobby and special interests). Run off is required to insure the bay, delta and rivers remain healthy. There are also requirements to support endangered species, spawning and environmental conditions for salmon and smelt.

What causes droughts in the US western states? Population is a factor, climate change very likely, SST (Sea Surface Temperature) very likely (buy and read the NOAA Report), how efficiently we use and save the available water. We hear the California TV weather folks talk about "El Nino", the map shows a major  El Nino event is underway, in 2015. An unanswered question is what causes changes in SST? A NOAA report is available on SST may be downloaded.  The water temperatures dramatically increase and the whales and predators (sharks and Orcas) follow the small fish inshore and further north,  as you notice in the news reports. There has been roughly a 1%+ annual decline in the number of diatoms, since 1998.  Diatoms are the start of the food chain in our oceans and when they die they capture CO₂ and hold it in the sediments.   

Will a very strong El Nino guarantee rain this winter, maybe. The odds are improving that we will have a wet winter, but we will still have a deficit of water because of the past several dry years.We need to do more to conserve and store water and generate more renewable electric power.

Many folks want to believe that man's effect on the environment is the only cause? Historically we have had little ice age (1700's) and remember the sun happens to provide the light and heat for us. Can man effect the climate yes, the question is how much?

A lot of controversy centers around, "What is causing the worldwide temperature to go up"?  Basically it is increasing and several factors are causing it, CO₂ emissions caused by vehicles, power plants (especially coal fired), other greenhouse gases, particles of solids in the upper atmosphere (volcanos, coal burning, clearing forests by burning, aircraft burning jet fuel at high altitudes). Take your pick, "whatever lights your fire". (pun intended) The reality is all probably contribute to global warming. 

What can we do? Lots of people are looking at the issues and the economic impacts of solutions. We will not make a mistake by reducing the emission of greenhouse gases and particulates, but we are only a small part of the globe, a lot of other countries affect our weather and the air we breath.. We are coming up on a couple of key decisions that will be made by CPUC. The first is the issue of net metering for solar installations. This can economically remove the incentives for conversion to one of the key renewable power sources for ratepayers, both residential and companies. All three three major power companies in California want to get a cut of the savings ratepayers are getting by using solar power. This may at first look a water related issue, think, " we use electricity to move the water through California's canal, reservoirs and aqueducts". If we have to use power from traditional power plants we use water (good old steam), if their coal (worst), oil (better) or gas (best) you generate electricity and particles of soot and CO₂. The more hybrid or all electric vehicles can use solar residential power to re-charge, reducing emissions.

This all falls apart if the big three electric companies get their foot in the door and hand on our wallets. There is a place and potential profits for their shareholders, based on solutions that will not damage the current solar industry and the ratepayers interests, both financial and ecological. 

Many have expressed we are at the critical point and climate change will continue to accelerate. The graph above is definitely a concern. Can we solve China's use of massive amounts of coal to produce power? unlikely. Can we protect our solar industry from the efforts of the three major electric companies? Can we make it worse by shipping poor quality coal to China? yes. (Port of Oakland)

The simple reality is we live in a very narrow strip of land from San Francisco to San Diego that is considered a "mediterranean climate", 50-60% of the state is marginal to semi-desert. This is maintained and made extremely useful agricultural acreage through the statewide water systems.

We are dependent on the infrastructure investments made Federal and State, in projects to capture runoff from the yearly cycle and wet season winters, many years ago. We have failed to create sufficient added capacity and infrastructure to survive an extended drought, with the current population (38+ million), agricultural demands and the environmental requirements. 

What are the options we have? Let's separate them by chronological availability:

•  Conservation, the present program addresses 10% of the available annual water usage, consumers in urban areas our 20% reduction actually only affects 2% of the available water. We have publicly owned utilities making an 8%+ profit, in a financial environment with inflation at 3% or less annually. We have an ugly list of compromises made by agencies with companies they were supposed to "regulate" and protect the interests of ratepayers/consumers. We are now paying for the agencies failures to protect consumer rights and guarantee the monies were properly spent effectively on infrastructure.The current conservation programs depend on consumers making investments that won't be even a break-even over a short period of time, since as we conserve the utilities claimed fixed costs will cause rates to increase. The cost of an acre foot when purchased from the local water district is also "automatically" passed through to consumers using an "Advise Letter" supposed to be for a non-controversial subject, with 20 days from issue to object for a limited number of reasons and no other review........consumers have little voice and visibility in the process. A hard look should also be made into the business practices and efficiency of the State's water districts.
• Storm rains may be significant this winter, but a lot is simply allowed to drain off into the ocean, unless it falls into a watershed of a reservoir. Capturing more of this and using to replenish the underground aquifers (storage for future use) seems to be one of the shorter term potential programs that we need to look at.  
• Recycling water both urban consumer and farmers is the next likely area of a long-term conservation benefits. Restoring the depleted aquifers, underground storage, is a mandatory requirement, using recycled water is a good point to start. Protection of the water bank storage is also required. We don't know who is or has pumped effluent from fracking and drilling into critical underground areas. The State of California has an agency chartered to do this EPA has expressed concerns with the data collected and the management of the companies drilling wells and using surfaces ponds.
• Agricultural water requirements are 40% of the available water, the only short term solution is to charge farmers a higher price per acre foot, they pay a very low rate per acre foot, and accept that some acreage will be left fallow for food production. We are finding the price per acre foot has gone from $100-$150 to $1200 or more. Mainly farmers with Senior Water Rights have let acreage go unwatered and sold the water to the highest bidder. Which raises the issue of senior water rights and the legal morass of making any changes. The best compromise is to offer support to farmers to conserve water and provide fincial support to modernize their use of water and continue to make an effort to resolve the senior rights issues as Australia has.
• We will be faced with CPUC making a decision shortly that could either increase or decrease the rate of installation of consumer solar power systems. The three major California electric companies are in the long term confronted with a financial problem they have an existing infrastructure that they want us to pay for as long as possible. They want to get every cent possible from us to pay for existing facilities to satisfy their shareholders, by charging us a monthly solar fee for their infrastructure. The question is how much is fair to the consumer/ratepayers? We will be paying for the "friendship" between the regulators and the regulated companies, for many years. Another post as this is another complex set of issues, but if they get a fee for their infrastructure how long should it be for? Reviewed every three years?
• Longer term 5 years plus we have increased reservoir, underground water bank storage, recycling and salt water distillation. Lots of potential solutions and many questions all have a "significant political" component. All will finally come back to how much will you pay!

SJWC transcript 8/19/15 Status Conference (WRAM, Bonuses, Conservation, Freedom of Information)

The following is the CPUC transcript for the GRC A1501002 8/19/2015:

August 31, 2015

TRANSCRIPT

REPORTING SECTION

8/19/15 Status Conference; Vol. 5; Pages 448-464.

Click for access to the PDF file of the transcript

The transcript indicates open issues regarding the time periods between the Governor's Drought Executive Order, issues concerning the actual water sales by SJWC during the periods and the likely "bounce back" increase in water use after the expiration of the drought controls and surcharges (penalties). The objective is to prevent a large surcharge from accumulating and be billed to ratepayers after the drought controls are rescinded or expire, a good objective.

We still have significant pending contested issues, as documented in my posting to this blog, before a settlement (a proposal) can be submitted to the CPUC Commission for a decision.

You should note that the transcript indicates that SJWC customers reduced water consumption by over 35%, 5% over the 30% reduction imposed by an agreement of SCVWD (Santa Clara Water District), SJWC and the City of San Jose, in response to the State Water Board required 20%.

I would argue that the current revenue protection that is in place for SJWC is adequate, while SJWC will argue that a full decoupling of sales and revenue is required to protect them and allow them to continue to pursue conservation measures. Hmm, we the customers exceeded expectations beyond both the State and the SCVWD requirements.  I don't recall any new efforts by SJWC to promote water conservation.

I'm sure the SJWC managers and officers deserve annual bonuses based on motivating SJWC customers to exceed conservation expectations, LOL. Hmm it could at best be argued that their contribution was a "speedy" implementation of DS1 and DS2 drought surcharges, in time to be included in the first water bill after the the Governor's Executive Order was effective. I seem to remember SJWC saying it would take weeks if not months to make changes to their billing software.........some changes are apparently easier to make than others  (;->) (an emoticon). You should also note that SJWC was prepared in 1992 tocalculate water savings based on each customer's prior usage.

An issue of Public Information, the transcript cost me $34.00 to get a copy. Interestingly it existed as both an Adobe PDF and an MS-Word file and was sent to me within a day of my request, I also received a hardcopy of the transcript. Yet it can't be downloaded from the CPUC GRC A1501002 docket/documents available online on the CPUC website? I know for a fact that Adobe PDF files can be password locked to prevent modification. So I have to assume that CPUC wants to limit access to information that should be easily provide at no charge. If you send email to the CPUC Public Advisor they will forward your request to the CPUC ALJ Division – Reporting Section who are helpful. I wonder if the legislation in process in Sacramento have any effect on making the transcripts downloadable and free?

FYI, the transcript download is hosted on my free account at Google, really time consuming and expensive, to make the transcript available, "right". The file can be downloaded, but the copy hosted on Google cannot be modified by the public.

8 week schedule slip? SJWC 2016, 2017, 2018 - RATE CASE AND INCREASE

The original Plan Schedule has "slipped" from a planned June 15, 2015 Mandatory Conference, to August 19, 2015. It's understandable that there would be a slip due to drought related actions that were required, as well as some difficult negotiation on several topics.

Click to view schedule, Exhibit A

SJWC has already requested and received approval for interim rates, starting on January 1, 2016, An encouraging item is SJWC requested current rate plus an optional inflation increase by month. Obviously they'll charge the difference between inflation and the likely 8-10% annual increase for 2016 when CPUC commissioners approve the resolution to the rate case.

The contested issues still are open as I posted, on this blog.

SJWC Requested Item	Status	Blogger Comment
WRAM full de-coupling of revenue and sales	Contested as of 9/18/15	PG&E got an ERAM, guarantees revenue independent of sales. Over the past 25 years have PG&E customers benefited?
WRAM contingent conservation programs	Contested as of 9/18/15	The proposed rate is 2,000 toilets a year, there are over 1 million toilets in SJWC system. Are you going to live long enough to get a free low flow toilet?
Staffing requests for 33 new staff positions	Contested as of 9/18/15	Since it appears that SJWC is delivering less water, has available man-hours(6 staff full-time) to use for NTP&S, do they really need 33 more staff people that we would pay for or would they be used for NTP&S?
Bonuses for Officers and Managers	Contested as of 9/18/15	Who should pay?You ( SJWC customers) or Shareholders? Shareholders set goals for their benefit, not SJWC customers.
Non-Tariffed Products and Services (“NTP&S”)	Tentative Agreement	Tentative Agreement, Appendix A Relates to staffing request, above.
Other financial items have contingent agreements or are pending and contested	Pending  as of 9/18/2015	Pending resolution of contested Items

I also have a previous post to this blog discussing the items above in more detail.

Please send email,

 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 currently contested issues 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. 

Please consider pasting the following, or parts you agree with, when you fill in the eForm:

"I OPPOSE SJWC paying management and officers bonuses with money included in our water rates, bonuses benefit shareholders, shareholders should pay the bonuses. I oppose a WRAM separating revenues from sales, I oppose using regulated staff for unregulated projects with insufficient controls, reporting and evaluation of the risk/reward for ratepayers. I oppose a major staffing increase of 33 positions, an almost 10% staff increase. I oppose proposals by SJWC that discriminate against seniors or other classes of SJWC ratepayers. Reference San Jose Water Company (SJWC) GRC 1501002."

You can also send an email to express your opinion on who should pay the bonuses you or the shareholders:

CPUC Public Advisor public.advisor@cpuc.ca.gov  Reference San Jose Water Company (SJWC) GRC 1501002.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
• Paul Rodgers, San Jose Mercury News, progers@mercurynews.com
• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com

Homeserve USA may be getting gas!

Homeserve USA (aka Homeserv, HomeEmergency Solutions, HEIS, etc.) seems to have gotten into the gas insurance line business. I noticed that Homeserve USA had posted a wealth of pages that are indexed by Google, this tends to push pages or posts by other parties to page 2 and 3. Only about 5-8% of folks doing a search look past page 1 of the search results.

I found several articles in the LA Times addressing, " Homeserve gas issue".

• SoCal Gas, third-party insurer should disclose their sweetheart deal, February 23, 2015. The following is an excerpt from the article:

"This financial relationship should be disclosed to consumers. In fact, any sweetheart deal between a utility and a third party should be made clear to consumers, and the California Public Utilities Commission should make sure such marketing affiliations are completely transparent. 

Better still, utilities should be barred from peddling third-party services to customers. If they see value in repair insurance, they should simply educate customers about the possible risks to homes and provide the names of all available insurers."

• Water Service Line Repairs Insurance a SCAM! The following is an excerpt from an older article, Newport, RI: (older article, but interesting viewpoint)

"Asking The Newport Water Division division of the City of Newport's Department of Utilities ; “How many water service line repairs did you complete in 2012? In the last 5 years? In the last 10 years?"

I believe this insurance company is preying on the elderly in Newport and Aquidneck Island
Yes, Newport's water service is OLD! (Started in 1876)...but the water service lines that connect your home to the water main are not in need of any emergency repairs!"

•  No, SoCal Gas Does Not Endorse that Insurance Mailer Despite the Logo, excerpt from article:

"The statement to shareholders by British-based Home Emergency Insurance Solutions (HEIS) about its sweetheart deals with utilities sounded like a personal invitation addressed to David Lazarus at the Los Angeles Times: “In the U.S.A., we have been proactively working with local attorneys general and media commentators . . . to minimize the risk of any negative media commentary.”

Lazarus mentioned that as background in his piece about Southern California Gas Company’s business arrangement with HomeServe USA, the official name of the Connecticut-based subsidiary that markets its insurance policies through direct mail."

The profits must be significant to fund the continuing mass mail campaign, royalty payments to utilities and pay for the repairs to gas and water pipes.................................

SJWC Requested 22% Rate Increase 2016, 2017, 2018 GRC A1501002

The following is the list of some of the more visible contested Items, in SJWC Rate Increase Request (GRC A1501002) and their current status, as of 9/7/2015. The proposed rate increase is about 22% over the years 2016, 2017 and 2018. The overall increase seems excessive since inflation historically has been running very low, annually 3%, or less.

SJWC Requested Item	Status	Blogger Comment
WRAM full de-coupling of revenue and sales	Contested as of 9/18/15	PG&E got an ERAM, guarantees revenue independent of sales. Over the past 25 years have PG&E customers benefited?
WRAM contingent conservation programs	Contested as of 9/18/15	The proposed rate is 2,000 toilets a year, there are over 1 million toilets in SJWC system. Are you going to live long enough to get a free low flow toilet?
Staffing requests for 33 new staff positions	Contested as of 9/18/15	Since it appears that SJWC is delivering less water, has available man-hours(6 staff full-time) to use for NTP&S, do they really need 33 more staff people that we would pay for or would they be used for NTP&S?
Bonuses for Officers and Managers	Contested as of 9/18/15	Who should pay?You ( SJWC customers) or Shareholders? Shareholders set goals for their benefit, not SJWC customers.
Non-Tariffed Products and Services (“NTP&S”)	Tentative Agreement	Tentative Agreement, Appendix A Relates to staffing request, above.
Other financial items have contingent agreements or are pending and contested	Pending  as of 9/18/2015	Pending resolution of contested Items

I also have a previous post to this blog discussing the items above in more detail.

I also have a previous post to this blog discussing the items above in more detail.

Please send email,

 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 currently contested issues 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. 

Please consider pasting the following when you fill in the eForm:

"I OPPOSE SJWC paying management and officers bonuses with money included in our water rates, bonuses benefit shareholders, shareholders should pay the bonuses. I oppose a WRAM separating revenues from sales, I oppose using regulated staff for unregulated projects with insufficient controls, reporting and evaluation of the risk/reward for ratepayers. I oppose proposals by SJWC that discriminate against seniors or other classes of SJWC ratepayers. Reference San Jose Water Company (SJWC) GRC 1501002."

You can also send an email to express your opinion on who should pay the bonuses you or the shareholders:

CPUC Public Advisor public.advisor@cpuc.ca.gov  Reference San Jose Water Company (SJWC) GRC 1501002.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
• Paul Rodgers, San Jose Mercury News, progers@mercurynews.com
• Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com