Many questions, too few answers


Published on Thursday, February 25, 2010 1:29 PM PST

Cathy Perfect
Kern Valley Sun

Representatives from the California Public Utilities Commission came to Kernville Thursday to hear public comment on California Water Service Company’s proposed rate increases. They got an earful.

Cal Water customers were notified last year of the company’s application requesting rate increases in each of its service areas (24 districts, 460,000 customers statewide) totaling more than $70 million, or 16.75 percent, effective next January. Cal Water, the largest water company in the state, is also asking for a $24 million increase in 2012 and another $24 million 2013.

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Accusations of “corporate piggishness” by Nancy Szepfalvi, of Squirrel Valley, resonated with the crowd of more than 100 upset and angry Valley residents packed into the Kernville Chamber of Commerce building.

Ed Bird, of Bodfish, called Cal Water’s request for a 16.75 percent increase, reportedly calculated using inflation factors provided by the CPUC, deceptive and disingenuous.

Noting that many Kern Valley residents are living on fixed incomes, Bird cautioned the commission, “to be mindful that the Social Security Administration has determined that current inflation is zero. There has been no increase in our (Social Security) benefits, yet you’re claiming these rate increases are based on inflation.” He asked again, “So what are the factors – other than inflation – that you’re using to justify these increases?”

There are a number of items factored in the application, said John Foth, a Cal Water Engineering Manager. “There are utility plant improvements, pipes, and wells. (Meeting the new) arsenic standards is the biggest expense factor in the rate increase.”

Several people questioned the “barely honest” wording in Cal Water’s rate increase notice. Foth addressed the comments by noting that 16.75 percent is the “average” increase; 460,00 customers paying $70 million more for service. Cal Water’s application calls for a 36.5 percent increase for the Kern River Valley District.

The DAR (Division of Ratepayer Advocates), “an independent arm of the CPUC created by the Legislature to represent the interests of ratepayers” is recommending a smaller increase of 20.9 percent.

“This is a travesty,” said George Dew, of Kernville. “The state of the economy is horrible; the state is broke. The DAR and Cal Water – what a bunch of weasels.”

A copy of Cal Water’s application and further information may be obtained from your local Cal Water office, 7138 Lake Isabella Blvd., Lake Isabella, 760-379-5336. Or contact the company’s headquarters at 1720 North First St., San Jose, CA, 95112-4598, 408-367-8200.

Comments

36 comment(s)

    Richard wrote on Mar 12, 2010 8:48 AM:

    " Unfortunately for us I think the PUC was sleeping again. In any case Domingez bought out the old Wofford Heights Quail Valley water company and many others around the lake. Domingez was the deal breaker in that they started adding connections. I don't know of any commitment by Domingez to upgrade any of the valley facilities before Cal Water bought or merged them.
    The old companies refused to add connections because they did not want to see water bills skyrocket. Only the land developers won because they didn't have to drill a well for each new building site. "

    Truth wrote on Mar 11, 2010 5:19 PM:

    " So Richard, who was the governing agency that allowed that action so that we the public have to suffer huge rates, when the company itself would have had to clean up the system (cost to them) BEFORE purchasing connections? Sounds like someone paid off an environmental agency so that the governing agency let the whole thing slide right by.....? "

    Richard wrote on Mar 10, 2010 4:06 PM:

    " Its not that I feel any company should not get a reasonable return in profit on their operations to pass on to their stockholders. Rather its the shifty way the opened the Pandora's box on valley water connections without first having the required facilities up and running first! either by issuing Corperate Bonds or borrowing funds against existing income and assets prior to selling new connections. Had they done so their profits would have been much smaller, our water would comply with the new standards, and we would be paying the same price as the folks in Bakersfield today! "

    Whatever wrote on Mar 10, 2010 10:01 AM:

    " Cal-Water the largest subsidary of a publically traded company called the California Water Service Group. Their net income for 2008 (2009 financial haven't been released) 39,905,000. For those of you who may not be familiar with financials, net-income is whats left after the bills have been paid. Basically its their profit for the year. Their profits have continuously climbed for at least the last five years. Cal-Water knows that we are going to keep buying water no matter the cost and they have found a new way to increase their profits. Look at their annuals yourself @
    ir.calwatergroup.com/phoenix.zhtml?c=108851&p=irol-reportsannual "

    Richard wrote on Mar 10, 2010 9:06 AM:

    " Not so easily done friend, the mentioned private water companies were grandfathered in decades ago. NEW water companies or those that take grandfathered water companies out of status must comply with current regulations BEFORE selling connections. Thats the gist of the problem, Cal Water bought the valley water companies and began selling connections without the necessary infracture in place. Thats why before Cal Water stepped in the little water companies wouldn't or couldn't sell connections. My brother-in-law, had to drill a well and put in a tank and pump before he could get a permit for a new home. "

    Whatever wrote on Mar 9, 2010 11:34 PM:

    " Here is what I don't get my friend pays a flat rate fee of $25 per month, just outside of Bakersfield. I pay Cal-Water over a $100 most months and much more in summer. I'm already sweating my bill most months and now they want to raise it more. And not just a little more but these are pretty significant raises. I would like a look at their financials to see if they are struggling as bad as they claim. "

    Buy out Cal Water wrote on Mar 7, 2010 8:31 PM:

    " Richard - if you think that you could do it so much better, offer to buy 200 or fewer connections from Cal Water and then sell the water for $26 a month. Go for it. "

    Richard wrote on Mar 6, 2010 4:38 PM:

    " I will say it again, Cal Water created these needed improvements when the bought out the valley water companies. A good example was the quail valley water association in Wofford Heights. It was grandfathered in with its existing connetions, at about $26 a month for unmetered water. Domingez water bought the company and immediately started selling connections with no facilities to meet the public drinking water requirements from a grandfathered ag use of less than 200 connections to a public water supply. Cal Water Stepped in and bought them and continued to sell connections with no facilities in place. "

    Richard wrote on Mar 4, 2010 7:18 PM:

    " The "Water" did change, basically its the same water that man has been drinking, livestock drinking and used in farming in the valley sense the Indians first settled here. What changed was the amount of both toxins allowed in a public water supply sold for human consumption. Previously those level were considered safe for decades. Currently those levels are still considered safe for farming and livestock uses. The privately owned rural water companes with less than 200 connections were grandfathered into the private Ag (farming) water regulations, currently still in use for much of the farming in the valley. "

    Fix the Water wrote on Mar 3, 2010 11:55 PM:

    " Drinking arsenic and uranium laden water is just plain dumb. Watering plants with it is dumb too. It gets into the air.

    Even if a bunch of little bum-eff companies wouldn't have had to remove the nasties from our water, it still NEEDED to be done. It is the RIGHT thing to do.

    Otherwise, I guess we just abandon the Valley. "

    Richard wrote on Mar 3, 2010 5:27 PM:

    " Quite true, under normal business situations undertaken by services supplying such things as water that come under review by the California Public Utilites Commission. However in this case Cal Water and the companies it bought in the Kern River Valley were locked in by agreement not to exceed their existing connections, a legal agreement that kept them from having to meet new changes in the regulations. When the successor companies took over the valley water companies they did not have the infructure in place to meet the regulations that were required to sell new hookups, they created this problem completely. "

    Capitalization Rules wrote on Mar 3, 2010 1:24 PM:

    " Asset capitalization is controled by the CPUC. PERIOD. They CPUC rate cases grant either A&G/Expense or Capital funds. If you don't know anything about regulatory accounting, then research it prior to posting nonesense. "

    Richard wrote on Mar 2, 2010 11:00 PM:

    " Simply put Cal Water is selling water connections without proper capalization of its infracture and not following good business practices of either taking out long term Capital Improvement loans or Corperate Bond Issues to fund those required Capital Improvments to meet government Requirements, but rather passing them on as short term operationg costs to their existing custermers so that they will not have to properly capatilize long there long term costs (to the detriment of their obsense profits) or to adversely effect their long term cash flow by charging off the costs of long term Capital Improvments for new connections. "

    Richard wrote on Mar 2, 2010 10:51 PM:

    " Cal Water reminds me alot of the problems the City of Los Angeles had in the late 1990s period when they were rebuilding their own sewer system. They offered the costal cities an upsized connector sewer to the Hyperion main plant nearby. BUT the connects per home for residental sites depending on flow would be between $10,000 and much more to be payable in a lump sum or over 20 years plus interest.
    Needless to say that connector never got built.
    So how much did Cal Water sell connections for without and existing ability to meet water quality standards? "

    To Kooky wrote on Mar 2, 2010 10:41 AM:

    " Sorry to disappoint you but I do a lot of housework. I use a lot of water for cleaning. "

    Kooky Postings wrote on Mar 1, 2010 9:06 AM:

    " California Water is a publicly traded company. It's on the NYSE. The largest owners are all American investment funds, probably full of 401k holdings. This gernam talk is just kooky. And Metropolitan, aka MWD, is a quasi state agency chartered by legislation in California. It seems like at least one poster doesn't do much homework. "

    Penny wrote on Mar 1, 2010 8:46 AM:

    " Yes I have a comment on Cal Water. I'm
    on a fix income so between paying electric and propame bill which I don't complain about. Cal Water is out of comtrol. Are they trying to drain us dry? I can't water my roses anymore or other plants that I have. I'm so angry with Cal Water they are getting rich while we are getting poorer. Thanks for hearing me. "

    Truth wrote on Feb 28, 2010 1:35 PM:

    " So, Observer, you really think you have the power "to put me away?".....better watch the threats, don't you know that is against the law? And don't you know that kind of talk is not allowed here? Looks like your comments have been overlooked, they do not follow the guidelines of this blog. Goodbye. "

    Truth wrote on Feb 28, 2010 12:02 AM:

    " To Observer: You should practice what you preach or as you suggest to me: prescribe your own medicine. You seem to be so offended when I talk about liberals, gosh, you must have a real problem reading any newspaper these days too; there is lots of talk about liberals and conservatives at this time; but as you said, you and others discuss me a great deal. Gee, I am flattered, but then again, maybe you are just distracted/angry because I tell the truth? "

    Observer wrote on Feb 27, 2010 7:35 PM:

    " Truth, you are a TRUE abomination and should be ashamed of your quickness to categorize people and their opinions. I really am curious why you are so bitter and hateful. Many here on this website have commented or been perplexed by your rhetoric. Please get on new medications and seek much needed help. Perhaps those whom you call friends up here will pitch in and give you a hand to help in this regard. We really need their assistance to put you away or get much needed help. "

    To Truth wrote on Feb 27, 2010 6:24 PM:

    " Wow! I don't know who you think I am. I just thought people should know about this. I'm not a liberal or conservative and wasn't being political. "

    Richard wrote on Feb 27, 2010 6:24 PM:

    " True enough about existing up to standard water companies, however Cal Water Boughtout Domingez and several other valley water companies that were existing under a grandfathering agreement with the State and Federal Water regulations. All of these small indenpendent water companies existed with less than 200 connections and wree exempt from meeting all new standards. Except the successor companies sold and made new connections above the exempt limits. Problem is that Cal Water did not have facilities in place to supply the now voided exemptions to supply the new customers.
    This problem was entirely created by Cal Water. "

    Truth wrote on Feb 27, 2010 6:10 PM:

    " If you are who I think you are, there is no reason for me to inform you; you will continue to dispute anything I write, so, like I had to, do your own research. It may be difficult for a liberal to obtain information because you must know where to look, but I think you can find it if you really care and are not just challenging everything I say. "

    To Truth wrote on Feb 27, 2010 12:29 PM:

    " Are you sure ALL the water companies in California have been sold to Germany? That's quite the all-inclusive statement. My guess is that a lot have been, but because of the seriousness of California's water situation, are there any articles or reports you can share with us? People need to know about this. "

    Truth wrote on Feb 26, 2010 10:36 PM:

    " All the water companys in California including Metropolitan were sold to German companys because the state or Feds owed them billions and had no way of paying for it, so now, "Tom Taxpayer," you are paying for what the government has given away....we who live in America are all suckers! All ports of call in America are now owned by the Chinese!
    How do you like "them apples?" And Obomb is giving even more away because of our banks....oh brother, woe is us! "

    Free Cheese wrote on Feb 26, 2010 12:27 AM:

    " Cut the Valley off must be a Cal Water employee.
    No wonder he/she can afford 2 wells. What a jerk!!
    Why do you assume that anyone is getting FREE government cheese, or is on SSI, and whatever SS is that you wrote.
    I feel sorry for your neighbors! "

    Bob wrote on Feb 25, 2010 8:34 AM:

    " I moved here from New Mexico last year.
    It now looks like that was a mistake.....the water bill in New Mexico was $20...to $35 a month...thats with all the plants and a green lawn.
    You could wash your car, flush your toliet, take a shower, etc..
    If you can't afford your water bill then you can't use the water...so all the plants die and then the fire season starts.....you can see where thats going.

    Cal Water is a curse, its also destroying the local area..it would be hard to sell and move on with a huge water bill. "

    Connection Fees wrote on Feb 25, 2010 7:42 AM:

    " In my experience as a housing developer, connection fees are only to cover the cost of new distribution piping related to new housing. They would never cover things like water purification, reverse osmosis, treatment, etc. That goes into day to day costs. "

    Nice Photo wrote on Feb 24, 2010 10:49 PM:

    " While it is a clever photo, it'll probably cost us money, since now the judge is probably royally POed for being razzed by his fellow judges back in San Francisco. I'm not sure this was a very good idea. "

    Richard wrote on Feb 24, 2010 10:33 PM:

    " Simple question never answered by Cal Water. What is the average connection fee for each new connection in the Kern River valley, all utilities have to have a rate based on the cost to supply the added connections. Many urban areas have a $10,000 connection fee based on the cost to create a product that complys with federal and state requirements. Cal water has been receiving connection fee's for hundreds of new connections each year for the last 5 or 6 years sense they bought out Domingez and several other private companies, where's the money? "

    proud citizen wrote on Feb 24, 2010 6:45 PM:

    " we need more people like those who stood up for all of us at this so-called meeting. Maybe the judge was sleeping because he knows that the increase will go through reguardless of what we say or do, no bother staying awake for our "whining". And just who does money bags think he/she is (Cut the valley off)? Maybe you should start your own water company, sounds like you would be good at ripping us off without any thought about it like cal water! "

    Local One wrote on Feb 24, 2010 1:36 PM:

    " "cut off" Some people don't have the option of having thier own wells. And, where is the proof that Cal water has removed heavy metals or toxins? It's definitely NOT in the water! So now let's discuss free gov. cheese. If you are a citizen and pay taxes, there is no free gov. cheese, you pay for these types of regulations to be enforced. You also contribute to the salary of Administrative Law Judge Bruce DeBerry to fall asleep during your 'whinning'
    Let's use smaller co. up here if they work better. "

    Nancy Walker wrote on Feb 24, 2010 12:27 PM:

    " Ohmygod! What a perfect catch! A wonderful example of our government hard at work for our survival!!! I've posted this article to every internet site I could find! Way to go SUN "

    Mac wrote on Feb 24, 2010 11:41 AM:

    " What is strange to me is how smaller water companies in the valley can provide service for so much less than Cal Water. Are they not bound by the same clean water acts? "

    Stan Silvers wrote on Feb 24, 2010 9:41 AM:

    " Make that free government cheese swiss for me, extra hole please. I think the use of the word "whining" was very improperly used, how about changing it to.. voicing a most vigorous COMPLAINT. To think a local resident is voicing his complaint against his fellow residents in our valley, not against the water company. As for his crack, "Cal Water should ABANDON the valley"..great, let's get another water company in here, and let Mr/Mrs Cut the valley off start the potation and I will be the first to sign. Hey, you got two wells, why not share your water?? "

    Cut the Valley Off wrote on Feb 24, 2010 1:26 AM:

    " I'm tired of the whining. You put your big hands out to take the money from the FEDS in SSI, SS and other entitlements. But when it comes to paying the piper for the same FEDS creating a clean water act and forcing Cal Water to remove the heavy metals and toxins, you CRY LIKE LITTLE BABIES.

    Cal Water should ABANDON the valley. I've got 2 wells and I pay my Edison and Atchison bills. And I don't WHINE.

    Do you want some free government cheese with that WHINE? "

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