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San Jose Water Hike Punishes Thrifty Customers

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San Jose Water Hike Punishes Thrifty Customers

San Jose Water Hike Punishes Thrifty Customers
May 17
14:41 2019

Ecology is hard, apparently, for the people managing the water supply for greater San Jose, south of San Francisco, California. The water utility, along with others in the San Francisco Bay Area, raised their rates during the prolonged droughts and preached using less H2O to reduce water consumption in the area.

Consumers complied. Now, the same San Jose public utility wants to add a new fee for underconsumption.

In a page taken straight from the “Darned if You Do, Darned if You Don’t” Manual, many San Jose residents are steamed over a small $2 fee that their local San Jose Water Company (SJWC) is calling a “surcharge” for following their own corporate directive in recent years past for their customers to stop using so much tap water.

Bay Area residents complied, replacing water-guzzling grass lawns with drought-tolerant xeriscape landscaping. People showered instead of filling a bathtub to save water. Overall, household water consumption in the San Jose area plunged by about 20 percent.

In return for the community’s collective rally to the cause of water conservation, the water company sent every customer a letter dated March 29, 2019, which stated that, in order to recover the 2018 budgeted revenue shortfall ($9,020,346), the California Public Utilities Commission would allow SJWC to pad their customers’ bills with “a 12-month quantity based surcharge of $0.1960 per ccf on all potable water usage.”

California has a long history of droughts – they go with the territory. The four-year period between fall 2011 and fall 2015 was the driest since record-keeping began in 1895. 2014 and 2015 were the two hottest years in the state’s recorded history.

Precipitation in 2016 was average in northern California (the source of most of the state’s water supply) but insufficient to resolve the severe water deficit. In January 2014, Governor Brown declared a statewide drought emergency and established an interagency drought response team. The state legislature authorized $3 billion of revenue, raised mainly from the sale of voter-approved bonds, for drought relief and improving water management.

The California Public Utilities Commission (PUC) sets the rate that the water company can charge its customers, based on estimated water consumption. During the drought years before 2016, this plan worked out economically for SJWC. But during the wetter year of 2016, residents continued their habitual, everyday water thrift.

The water company admitted that both Mother Nature and human nature had outfoxed them by providing more water than the hydro-engineers over at the local waterworks had reckoned on. The San Jose utility monopoly is claiming a $9 million deficit because they set their per-gallon price too low.

Speaking for SJWC, Jayme Ackemann explained how this budget imbalance arose:

“We don’t sell the amount of water that was projected because people are changing their behavior and using less water. And because of that, unfortunately, we can’t cover our costs.”

It is unfortunate, indeed, but not for San Jose Water Company which simply divided the $9 million among all its customers and came up with a $2 “surcharge” to shirk their poor forecasting outcomes, manage the state watershed, and improve water management.

One San Jose resident expressed the prevailing frustration and confusion felt by many families:

“You know we ask our family our kids to be careful with the water usage, and now to hear that we’re gonna have to pay extra for doing that doesn’t seem to fair.”

In November 2018, SJWC announced an approved rate increase of 4.55 percent for 2019 billings, which went into effect in January this year. Last fall, the water company stated that their action would reduce rate uncertainty for customers – presumably, in the form of another rate hike.

San Jose residents had until April 18 to protest the surcharge through April 18. The rate was approved and the new surcharge will take effect on customer bills starting July 1, 2019.

This is not the first time San Jose Water Company has been involved in consumer complaints. On Friday, September 14, 2018, the Mercury News reported:

“On Friday, the California Public Utilities Commission (CPUC) announced that it had opened an investigation into the company’s billing practices after a staff report suggested that for at least 30 years, San Jose Water failed to pro-rate bills when a change in service charges went into effect in the middle of a billing cycle. Instead of pro-rating the bill, the company allegedly charged customers the new, higher service fee for the entire cycle. The company also allegedly double-billed customers some $5 million when it switched from billing service charges in advance to billing them in arrears.”

Rita Benton co-founded the Water Rate Advocates for Transparency, Equity and Sustainability group, which filed billing complaints that resulted in the current CPUC inquiry. Benton said the group was already sending protest letters in response to SJWC’s latest proposed financial punishment:

“They already increased rates, they’re already getting more than they should be getting, and now they’re claiming it’s because of conservation? That’s ridiculous.”

Perhaps if San Jose Water Company can’t cover its cost, it should declare bankruptcy like any other corporation and let the new contractor bidding begin.

Why not replace incompetent mismanagement with excellent performance, California?

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