Golden State pushes back over rate hike settlement

The local water fight continues, as groups remain at odds over recent allegations.

 In its reply comments submitted to the Public Utilities Commission, Golden State Water, the Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN) allege that numerous cities including Claremont did not fully participate in the settlement process that led to the early August water rate settlement with Golden State Water Company.

In its statement, GSW claims that Claremont did not participate farther than the mandatory negotiations meeting held on April 16 and “therefore did not take the opportunity to provide input into the settlement agreement reached by the settling parties.” They further assert that Ojai was the only city to fully participate in negotiations.

“The city [of Claremont] has been absent, so the suggestion that they are frustrated  [with the settlement] is a little surprising to us,” said Golden State Water spokesperson Mitch Zak earlier this month. “The city chose not to participate in the settlement process in a meaningful way.”

Claremont administrators feel the quick settlement undermines city efforts in the case.

“The settlement between the DRA and Golden State Water is disappointing and frustrating,” said City Manager Tony Ramos in a previous statement. “The ratepayers deserve full consideration of the evidence and this process has been cut off by the settlement.”

The back-and-forth paper trail between Golden State Water and the city of Claremont among others began last month following a settlement agreement filed with the California Public Utilities Commission. The settlement agreed on proposed water rate increases of 15.1 percent in 2013, 2 percent in 2014 and 1.8 percent in 2015. Golden State Water initially sought a 24 percent rate increase for Region 3 in 2012, followed by moderate increases in 2014 and 2015.

Following a press release where the city stated its frustration with the settlement, Golden State responded with its assertions that Claremont had been missing-in-action at meetings during the process. What has followed since has been a series of published comments, with Golden State defending its stance and the city asserting its participation.

“I just can’t even begin to speculate why Golden State continues to say this,” said Claremont’s City Attorney Sonia Carvalho. “I’m absolutely perplexed because we participated.”

The city’s participation was documented in a timeline given out to staff and council members, among others, according to attorney Jason Ackerman. According to the documents, Claremont officials were present at settlement negotiations beginning April 16 and ending April 24. Much of the correspondence on Claremont’s part, along with others, took place via telephone, says Mr. Ackerman, “to accommodate participants from different regions within the state.”

In addition, testimony from Claremont Councilmember Sam Pedroza and Mayor Larry Schroeder was submitted as part of the written record, as documented in the Settlement Conference Report.

However, according to Mr. Ackers, the city was not informed as to when the agencies would meet to finalize the settlement. It was not until the evidentiary hearings began on May 4 that “we learned for the first time that Golden State had settled nearly all issues with DRA and TURN,” Mr. Ackerman said, adding, “We were not made aware of the terms of the settlement until June.”

While Golden State officials maintain that settlement meetings were held in Los Angeles with plenty of opportunity for the cities’ participation, Mr. Ackerman says there was never a chance for the cities to sit down in person with the other organizations during settlement negotiations.

“Golden State scheduled the settlement meetings as telephonic meetings from day-one,” Mr. Ackerman said. “I can assure you that the location from where those calls originated was not negotiated by the cities we represent.”

These specific concerns of the cities “have no merit,” according to Golden State Water, the DRA and TURN.

“The settling parties have negotiated in good faith and agreed to a level of expenses and capital additions that significantly reduces the originally requested increase in rates,” states the document.

GSW previously requested combined capital budgets of $226.7 million for 3 regions during the years 2012 to 2014. The current request in the settlement totals $172.5 million, a reduction of $54.2 million from the original request.

However, the city of Claremont disputes the settlement, based in part on a previous request of $4 million by GSW to construct the Johnson’s Pasture reservoir, which was never constructed.

Testimony of Kevin Switzer on behalf of GSW purports that Claremont had requested only $1.7 million for the Johnson’s Pasture reservoir, according to the Joint Settlement Agreement, and that because the project was never completed, the cost is not reflected in the capitol budget portion of the Settlement Agreement.

The dispute over the capitol budget stems from comments submitted to the PUC by Claremont Mayor Larry Schroeder,

Residents may be left feeling like it’s a “done deal,” however, Denise Kruger, Golden State’s senior vice president of regulated utilities, claims that the current settlement doesn’t cut off review or previous efforts by the public to participate.

“All of those comments are part of the record and taken into consideration,” Ms. Kruger said.

—Beth Hartnett


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