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Bay Point Residents Outraged Over High Water Rates

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(Sean Gallup/Getty Images)

(Sean Gallup/Getty Images)

BAY POINT (CBS 5) — Water is one of the very few things you can’t live without. But what if your neighbors were paying about half what you pay?

Val Mojica of Bay Point lives 15 minutes away from his sister Carmen in Concord. While they drink the exact same water, it comes from two different utilities.

Golden State Water Company is a private, for-profit utility based in Southern California. For Val and his neighbors in Bay Point, it’s the only game in town for water.

“We’re stuck,” said Bay Point resident Donnia Cameron. “Who else are we going to talk to for water, you know?”

The water doesn’t come from Southern California. Golden State Water buys it from the Contra Costa Water District, where Val Mojica’s sister gets his water from.

In the month of August, Val Mojica’s water bill from Golden State was $183. His sister Carmen, who lives in a much larger home with a swimming pool, paid $4 more in August for two times as much water.

“Golden State Water opts to charge us twice the amount that the rest of the county pays,” Val Mojica said, “For the same exact water coming from the same exact place.”

Contra Costa Supervisor Federal Glover said referring to Bay Point, “Highest water rate in the county, for the poorest community in the county.”

“One third of the population of Bay Point is actually below the poverty level,” Val Mojica said.

For 900 cubic feet of water a month, the East Bay Municipal Utility District charges customers around $38. A Contra Costa Water District customer in Pleasant Hill or Walnut Creek would pay around $44. But Golden State Water customers in Bay Point would pay more than $79, and the cost is rising.

“We’re getting the little blue cards in the mail that say we’re going to have a meeting and go ahead and hike your rates,” said Cameron.

“They’re asking now for another increase of 16 percent,” Glover said. That’s on top of a 60 percent increase since 2007.

“It is absolutely insane, and it’s unreasonable,” Val Mojica said.

In a statement to CBS 5, Golden State Water said they appreciate these concerns.

Regarding rates, District Manager Paul Schubert said in the statement, “…factors include sources of the water supply, financing of capital improvement projects, size of operations, and system maintenance expenses.”

They also stress that publicly-owned agencies receive tax revenue and grants that keep prices low.

And as for Golden State’s obligation to shareholders, the company said, it’s simply to provide the best possible water service.

“It’s quite common for customers of a private water utility like Golden State Water are paying twice as high, if not more, than a neighboring water utility that is publicly owned and operated,” said Adam Scow of Food & Water Watch.

But private companies can’t simply name their price. They need approval from the California Public Utilities Commission.

“Year after year after year,” Scow said. “What we’ve seen is the Public Utilities Commission favoring the water utility over protecting the ratepayers.”

“We’ve heard nothing from the PUC. No help, no assistance whatsoever,” Val Mojica said.

Glover said, “We have to question, whose interest is the PUC working in?”

So with another rate hike looming, residents gear up for another fight, hoping for a different result.

Val Mojica said, “It’s a matter of the 99 percenters in Bay Point, who are going to move forward, and make a lot of noise, to Golden State Water, at the PUC and the Governor’s office if necessary.”

In 2010, Golden State Water’s parent company reported a net income of $31 million. CBS 5 asked the Public Utilities Commission for a comment. They encouraged Bay Point residents to attend the next hearing on the proposed rate hike set for later this month.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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8 Comments

James Bouler

I hope you will stay with this story. You have only scratched the surface.
Approximately 15 percent of the people in the State are served by privately owned or investor owned water companies. As Adam Scow pointed out in almost every case rates charged by privately owned or investor owned utilities are considerably higher than those charged by publicly owned utilities.
We here in Larkfield in Sonoma County are facing the same situation with the California American Water Company. The community of Lucedrn in Lake County are in the same boat with American Water Service Company.
I have said for years that we are not being well served by the California Public Utilities Commission. Their procedures favor the utilities and the utilities know how to work the Commission’s staff to the utilities advantage.
The Commission is too prone to allow charges to be added to rates that have nothing to do with the cost of providing water.

November 5, 2011 at 12:22 am | Reply | Report comment

Michael Verdon

Is there a list of water companies and rates for the bay area?

November 5, 2011 at 1:07 am | Reply | Report comment

Val Mojica

Water rates are simply too high. There is no room in this community, in any community for this type of “rip off”. The PUC will not appropriately manage it’s business, then it becomes the function of the people to let the powers that be that charging double the rates for a necessity like water in a community that needs to decide on a daily basis how it will feed it’s children is criminal and that a state organization charged with the responsibility of looking after the “people’s well-being” has been failing in it’s duty for years giving Golden State Water the right to rob from us. It’s outrageous and all legal means must be undertaken to put an end to this tyranny!

November 5, 2011 at 1:20 am | Reply | Report comment

tn

Wow. Val Mojica looks just like this Pacific Bell Yellow Page sales rep I had years ago, only this Val Mojica is over 300 lbs lighter. I thought he has a similar sized wife named Cathy? If it is the same person, the yellow page rates he charged me has come back to bite him in his pants. Good luck to him and the Bay Point residents in seeking more competitive utility rates.

November 5, 2011 at 8:15 am | Reply | Report comment

Val Mojica

It is me! Who are you?

November 7, 2011 at 12:53 pm | Reply | Report comment

Lisa

Barstow California is facing terrible water hikes by Golden State Water Co. My bill went from $60. every two months to $390. many people here have over $500. dollar water bills and some over a thousand with Golden State Water Company wanting more money. You can read the Division of Rate Payers Advocates to find more information. Write to The Bureau of State Audits to file against the PUC, call Ronald Moore Golden State Water Co. San Dimas office, Call the Turn organization for help or email Turn.org. Call the PUC judges, and the commissioners, to make them hear your voice. Call Connie Conway’s office. Jerry Brown appointed the commissioners to the PUC.

November 7, 2011 at 3:11 pm | Reply | Report comment

Jon

Ojai California, residents in Ojai are paying as much as three times more for water from Golden State than any of the other water district. Write or email the Public Advisors Office of the CPUC. contact your local and state representatives and voice your concerns. A group called OJAI FLOW has been formed to take back our water from Golden State. Golden State knows how to manipulate the system to there advantage. Finanacial facts about American States Water Company owner of GSWC.
Fact #1
2nd Quarter Results 2011 for American States Water Company
Basic and fully diluted earnings from continuing operations were $0.68 per common share for the quarter ended June 30, 2011, a 45% increase as compared to the quarter ended June 30, 2010.
Fact #2
American States 2010 Annual Report
Golden State Water Company continues to be our flagship subsidiary. It accounted for approximately 82 percent of revenues and 81 percent of income from continuing operations.
Fact #3
American States 2010 Annual Report
THE SALE OF CHAPARRAL CITY WATER COMPANY (CCWC)
Unacceptable were the low historical returns on our investment in Chaparral City Water Company our Arizona subsidiary. In light of those returns, we did not have an interest in growing CCWC.
We further concluded that given CCWC’s small size, it made business sense to consider a sale.

Chaparral is a water utility company serving over 13,000 customers. It sold for 35 million dollars. That’s $2700 per customer. Ojai has 2900 customers, if size reflects value how much is our water infrastructure worth? Obviously GSWC is making a lot of money in Ojai otherwise they would be willing to sell our tiny district. It was not profitable to run a water company privately in Arizona. To much regulation they say.
It is very profitable to run a private water utility company in California. The California Public Utility Commission (CPUC) is not doing a very good job of protected customers from rate hikes. Below is how they are doing it.
Fact # 4
American States 2008 Annual Report
Public water policy also affects profitability. In 2008, three members of Golden State Water’s Environmental Quality Department assumed key leadership positions with the California-Nevada Section of the American Water Works Association, giving us a strong voice in crafting state and federal water regulations.

We took strategic steps to ensure our profitability in the years to come. Perhaps the most important was securing the California Public Utilities Commission’s approval of a Water Revenue Adjustment Mechanism, or WRAM. The WRAM allows us to decouple revenues from sales, thereby avoiding the volatility in our earnings caused by drought, unseasonable temperatures, and other factors.

Fact #5

A Rate Structure that Provides the Right Incentives

In August 2008, the California Public Utilities Commission (“CPUC”) issued a final decision which authorized GSWC to implement an increasing block rate design as a means to encourage water conservation in our Region II and III water regions. In addition, GSWC was authorized to establish a Water Revenue Adjustment Mechanism (“WRAM”) and a Modified Cost Balancing Account (“MCBA”) to remove the impact to earnings due to supply mix changes and increased costs of purchased water. In late November 2008, GSWC implemented the increasing block rates, the WRAM and MCBA. As a result, the WRAM and MCBA favorably impacted our 2008 fourth quarter earnings by $0.03 per share that would have previously been lost due to conservation.

There is no risk to this company. They are very good at manipulating the system. They have had this system since 1929. The reason we have all the problems is there lack of infrastructure replacement and commitment to their customers in Ojai. We need to take back control of our water! We need to keep Golden State Water Company from raising rates again.
Ojai is not in this fight alone. Others areas and cities have protested the latest increases. This year there more public participation hearings being held. All because GSWC customers in California are tired of the constant rate increases. The community of Las Osos has banned together to fight GSWC. They have signs in their yards as we do.

Bay Point Golden State Customers get the word out attend the public Participation Hearing in Bay Point on November 29,2011 Let your voices be heard.

November 7, 2011 at 7:10 pm | Reply | Report comment

Val Mojica

TO all our friends. We will be there to voice our opinion in Bay Point. Bay Point is the only town in all of Contra Costa County that gets it’s water supply from GSW. We are a community of 21,000. 1/3 of the residents of bay Point live under the poverty level. I have been in contact with all of our local representatives, and no action has yet to be taken. The Contra Costa Times did a full page story on the issue a few weeks ago and KCBS in San Francisco came out and did an excellent job of reporting on the issue. You can see it here. I am Val Mojica, the person interviewed. If you can give me some direct advice, you can reach me at vm1ca@comcast.net. I and all of our neighbors will be at the 11/29 meeting held here in Bay Point.

November 8, 2011 at 2:14 pm | Reply | Report comment

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