www.sacbee.com/2010/08/13/2955919/cal-am-seeks-permission-to-increase.html

Loretta Kalb

Sacramento Bee

lkalb@sacbee.com

Published Friday, Aug. 13, 2010

About 180,000 customers of California American Water in the Sacramento area face a 40.4 percent rate hike through 2014, under the company's proposal filed with state utilities regulators.

The proposed water rate increases would require customers in Isleton, portions of Rancho Cordova and Citrus Heights and in unincorporated areas to pay an additional $17.8 million over a three-year period.

If Cal Am's proposal before the California Public Utilities Commission is approved in late 2011, the increases would come on top of rate hikes totaling 24.3 percent in 2010.

Cal Am also provides water to communities throughout the state, and its total rate hike request is $58 million.

A company spokesman said the increases are tied to infrastructure improvements needed in the Sacramento area along with an aggressive meter retrofit program.

"We're talking (in some instances) about recovering costs that were incurred as early as 2007 and that will be incurred as late as 2014 with these rate increases," said spokesman Evan Jacobs.

He said the funds support multimillion-dollar projects for Sacramento, including the ongoing upgrade of the water distribution system and construction of large water tanks, "improving the system reliability, fire protection and water pressure."

On Monday, the independent Division of Ratepayer Advocates of the PUC filed a protest, expressing concern over the "sheer magnitude of the rate increases" proposed statewide.

"In light of the poor state of the economy, California's increasing unemployment rate, and the reality that Cal Am's last rate increases for Larkfield, Los Angeles and Sacramento were authorized (effective this year), the proposed rate increases will impose unacceptable rate shock upon Cal Am's customers," the filing said.

Cal Am's proposal would push the company's monthly water rates in Sacramento to around $60 a month by 2014.

The current monthly rate of $43.57 already reflects the 24.3 percent increase for this year.

The latest rate hike proposal would push the current bill to $52.74 in 2012 for the typical residential metered customer using 1,700 cubic feet of water.

The next year, the monthly rate for the typical metered customers would grow to about $56. And in 2014, that monthly residential bill would rise to nearly $60.

Unmetered customers, expected to number fewer than half Cal Am's water user base in Sacramento by 2012, would pay slightly more under the proposal.

Stephen Owens, utilities engineer for PUC's independent advocates, said the division examines rate proposals "to make sure that the customers are getting safe, reliable, efficient service for the least cost possible."

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