James Hunter

Friday, March 27, 2015

"Windfall profits" and Water Rate Increases

The good news is my email request to CPUC Public Advisor got a prompt response. In my posting of Wednesday, March 25, 2015:

Public Hearing 3/24/15, transparency will be tested and are there "windfall" profits excerpt:

  • Water costs increasing caused by the current drought , "will water costs be passed through to ratepayers, without added charges? I have sent, 03/25/2015, a formal request for clarification to the CPUC Public Advisor's Office on the interpretation of :
  • Page 4, (13) Pursuant to Rule 3.2(a)(10), Applicant states that the rate increases proposed in this application do not reflect and pass through to customers only increased costs to Applicant for the services or commodities furnished by it.
Below the CPUC response clarifies that increases in water rates by SCVWD to San Jose Water Company will be, "Water cost increases from SCVWD are pass-through costs with no mark-up by San Jose Water.

============ CPUC Response to Inquiry =======================

Boothe, James A. 

3:29 PM (22 hours ago)

to me
Mr. Hunter,

I am responding to your note to the Commission’s Public Advisor’s Office regarding San Jose Water’s proposed rate increases.  Any cost increases by the SCVWD are in addition to what San Jose Water is requesting in its rate case proceeding.  Water cost increases from SCVWD are pass-through costs with no mark-up by San Jose Water.  As indicated, these requests to increase rates from increased water costs are sought through an Advice Letter.  If you would like to receive a copy of San Jose Water advice letter filings, you can request that your name be added to the service list for these filings by contacting San Jose Water.  Advice letters can be protested.  However, in the case of wholesale water costs from SCVWD, the best means for addressing increased water costs is directly with SCVWD.


James Boothe
Division of Water and Audits
California Public Utilities Commission

Note: My thanks to Mr. Boothe for a quick and complete response. His phone number and email were removed to preserve his privacy and the key section of his reply was highlighted in RED. 

While this clarifies how the drought increased water costs will reach the ratepayer and there should be no opportunity for "windfall profits", the question then remains what are the actual water rates going to be? What are water charges likely to be from Santa Clara Valley Water District water, what will be our rates from San Jose Water Company. A post will be up in 2-3 days and address the water rates and transparency questions.

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