The California Public Utilities Commission (CPUC) ordered Golden State Water Company to refund $9.5 million to its customers in a decision finalized last week. Claremont residents are among thousands of ratepayers from Region 3 who will get a tiny piece of the profit.

Approximately $400,000 will be refunded to Golden State Water’s estimated 100,000 Region 3 ratepayers. A decision will be made in early 2012 to determine how the refunded money will be shared.

“The settlement reflects our commitment to our customers, who will be the greatest beneficiaries of this agreement, and our recognition of the importance of maintaining positive relations with the CPUC,” said Golden State Water CEO Robert Sprowls in a statement, that also states that “the company disputed many of the conclusions reached by Commission staff, but agreed to settle the case to avoid the uncertainty of a costly legal battle.”

CPUC approved the decision after an extensive review of the company revealed past billing inconsistencies. The CPUC determined that 2 of the water company’s executives based in Northern California had violated “internal bidding procedures” with Richardson Engineering Company, who had been overcharging the company for services, according to documents provided by the CPUC.

A majority of the money—an approximate $8.7 million—will be given to ratepayers within Golden State Water’s Region One.

“This is where the work in question was performed,” said Golden State spokesperson John Dewey.

The money will be given back to customers over the next 3 years with an additional $1 million fine to the CPUC. Throughout the next 10 years Golden State Water Company will also be subject to 3 independent reviews to ensure practices have changed.

“The Commission directed Golden State to view the settlement as a fresh start to vigorously enforce strong and effective internal controls; we understand this direction and will comply,” Mr. Sprowls said.

Though the refunds will hardly change the lofty prices of Claremont’s current water bills, the decision is a step in the right direction, says Hal Hargrave, a leader of the grassroots group Claremonters Against Outrageous Water Rates.

“We are talking cents off a bill. This isn’t even a slap on the hand, but it does validate the fact that we have a public agency here that hasn’t been held accountable, and now they are being held accountable and being exposed,” Mr. Hargrave said. “This just intensifies our fight to continue to expose Golden State Water. We are digging deeper in the trenches now.”

—Beth Hartnett