James Hunter

Tuesday, May 31, 2016

SJWC $8.08 Million Tax Windfall. or "We got it and don't want to share it with those nasty ratepayers!"

To be fair they didn't specifically say "nasty" ratepayers. It's obvious that SJWC feels they've found a legal loophole that will allow them to keep the $8 million and not credit the ratepayers, any of the windfall tax refund and by the way pay SJWC Management  a bonus, paid for by ratepayers, for increasing the value of their shareholder investment. (Please note, I own 10 shares of SJW stock, so I can attend annual meetings.)

 The link below (finally up after being down about 3 days) is again available:


My personal view is this is not a case of retroactive rate-making, this is a simple case of greed. SJWC is protected by lots of rules that guarantee them both a profit and a return on shareholder investments. The "system" is and has been very generous, due to previous years of CPUC tendencies to be supportive of all utilities they are supposed to regulate. There seems to be a failing on the part of SJWC and CPUC (Water Division), in this case. SJWC is proactive in requesting action in a timely manner when their "profits" are endangered, but the $8 million tax windfall was apparently not brought to the attention of CPUC, nor did CPUC raise the issue with SJWC, instead SJWC felt that nothing should be paid back to the ratepayers! If in fact the tax action occurred before the next three rate case cycle. SJWC has roughly 225,000 ratepayers, if a simple distribution was 8 million / 225 K = ~$36 credit per ratepayer, a fair pro rata distribution should be based on actual water usage per ratepayer and no credit to WRAP participants who get rates subsidized by full charge ratepayers.

Another point is the SJWC staffing we are already paying for highly paid executives whose objective and mission is to maximize the water rates we pay, this is somewhat obscured by the NTP&S (Non Tariffed Product & Services) for profit business that should be separated from the tariffed (regulated) portion of SJWC business, really hard to do if the folks are part of the SJWC employees our water bills pay for. SJWC requested 33 new staff positions, in the Proposed Decision (PD) 6 positions are recommended.

It's interesting some the other SJWC issues like WRAM that would establish a Water Rate Adjustment Mechanism, to guarantee their profit, independent of how efficient the SJWC is operated. The goal of SJWC is obviously to have ratepayers bear the burden of their potential inefficiency and as much risk and financial burdens, as possible.

While SJWC is at it let's get the ratepayers to pay our Executive and Managers Bonuses! Who does SJWC actually work for? Surprise the shareholders in theory own the company and the management operates to increase the value of the stock and increase the dividends paid to "surprise" shareholders.

CPUC and especially ORA (Office of Ratepayer Advocates) both should work to insure, in the case of SJWC, safe, reliable water service at a fair and reasonable cost to ratepayers. Sometimes the actual mission can be lost in the rhetoric and previously the suspected close relationships, between utilities and regulators.

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