James Hunter

Sunday, October 16, 2016

SJWC is really green (profits), our yards are brown................

We are at the beginning of the 6th year of drought. Seems odd as I look out my office window at the very light rain falling from a series of storm fronts, at my landscaping and grass. Hopefully some of the dead spots and shrubs will make an effort to turn green again.

Which raises several questions regarding the "financial" performance of SJW Corp. who wholly owns San Jose Water Company. A Yahoo Financial article caught my attention several weeks ago, I encourage readers to read the original article and form their opinion. Click to read.

Several things really drew my attention:
"SJW Corp. offers excellent investment opportunity for investors due to its proven business model and a viable capital program, which drives rate base and earnings growth. The company is benefiting from a constructive regulatory environment, with mechanisms in place to provide protection for sales lost due to the ongoing drought and mandatory water conservation rules."
I wonder what a "constructive regulatory environment" means, to us the ratepayers/customers  We may possibly have seen a "constructive regulatory environment", between CPUC and PG&E and this resulted in enacting more stringent rules for CPUC's relationships with the utilities. Does this also apply to the water utilities?

SJW Corporation stock has about doubled during the drought, in part because their profits are guaranteed by the last two rate cases. Their dividends have increased to shareholders and have had a surprisingly good earnings performance, I'll leave it up to my readers to guess where the money came from, just a pointed hint, "you and I".
"The company has reported a positive earnings surprise in two out of the last four quarters, resulting in an average positive surprise of 47.57%." 
 Based on some of the stock analysts, some indications are the operations could be more efficient compared to peer group of water utilities. Since there was a reference to a "constructive regulatory environment" it worth watching closely to see what this may mean to ratepayers.

My next posting will look at the impact of drought on the water rates and look closely at what ratepayers/customers might do to control their water costs. Meanwhile let's all hope for a wet rain season, but also plan for the drought to continue.


  1. Mr. Hunter, thank you for this blog and your efforts. Monopolistic companies such as SJWC, especially involving a public and essential resource such as water should not be allowed to regulate themselves.

    Santa Clara County is intentionally failing to enforce local zoning, drainage, planning ordinances as well as State and Federal fire/clean water acts.

    San Jose Water is building a new water tank next to our home which has blocked our view.  SJW has destroyed a private road and even moved the road/easement between two of their tanks/parcels.   SJW is not exempt from ordinances. SJW's only exemption is from a grading permit.    

    SJW was required by law to go through design review, somehow they were able to skip the process. 

    SJW is violating Clean Water Act - storm water run off. EPA-Federal violations.

    I find it unconscionable that a corporation charged with providing us clean drinking water is obtaining substantial rates increases to address failing infrastructure on 1 hand and then is polluting water and potentially receiving funding to treat self-inflicted pollutants on the other.

    On top of rate increases SJW's position is that surrounding neighbors should pay for the damage to surrounding properties re: drainage issues and fire safety created by SJW's substantial additions to impervious surfaces and County's lack of code enforcement.

    SJW is required to improve a private road to meet fire standards:

    1273.00. Intent
    Road and street networks, whether public or private, unless exempted under section 1270.02(e), shall provide for
    safe access for emergency wildland fire equipment and civilian evacuation concurrently, and shall provide
    unobstructed traffic circulation during a wildfire emergency consistent with Sections 1273.00 through 1273.11.

    1273.01. Road Width All roads shall be constructed to provide a minimum of two ten (10) foot traffic lanes, not including shoulder and striping. These traffic lanes shall provide for two-way traffic flow to support emergency vehicle and civilian egress,unless other standards are provided in this article, or additional requirements are mandated by local jurisdictions or local subdivision requirements.

    1273.02. Roadway Surface
    Roadways shall be designed and maintained to support the imposed load of fire apparatus weighing at least
    75,000 pounds and provide an aggregate base. Project proponent shall provide engineering specifications to
    support design, if requested by the local authority having jurisdiction.

    1273.03. Roadway Grades
    The grade for all roads, streets, private lanes and driveways shall not exceed 16 percent.

    1273.04. Roadway Radius
    (a) No roadway shall have a horizontal inside radius of curvature of less than 50 feet and additional surface width
    of 4 feet shall be added to curves of 50-100 feet radius; 2 feet to those from 100-200 feet.
    (b) The length of vertical curves in roadways, exclusive of gutters, ditches, and drainage structures designed to
    hold or divert water, shall be not less than 100 feet.

    1273.05. Roadway Turnarounds

    Properties are located in the state responsibility area for fire safety (in urban service area - feet outside of Los Gatos town limits). I will contact dept of forestry and EPA to see if they are going to do something about this.

    Mr. Hunter, please email me: I am certain we can help stop the abuses. If your readers have additional evidence of abuses I can be reached at michaelsblomquist at gmail

  2. I appreciate comments, both agree and disagree with me, as they tell me me efforts are not in vain.

    The blog has had over 33,500 visitors.

    My next posting will probably focus on the drought surcharges, that were continued to be applied based on SCVWD recommendations. Apparently over 80% of the state discontinued the surcharges (need to verify). A topic of continuing concern, of customers, is the Home Emergency Insurance Solutions. While $5 month isn't too bad, what is really covered? The pipe from the meter customer side to the demarcation/entry into your house water piping. All the other water utilities have published the agreement they have with HEIS, except SJWC.

    Oh well another day another windmill................."Don Quixote"