Drop by drop:
Making sense of your water bill
As Claremont officials are busy working through details of the potential water acquisition—due before the council in closed session Tuesday, October 23—some residents are finding themselves equally occupied attempting to decode the terminology in their water bills.
“We get an email at least once a week with questions on water bills,” said Hal Hargrave of the grassroots organization Claremonters Against Outrageous Water Rates. He noted that questions range from inquiries about acronyms to why billing periods change.
“It’s all very confusing and it’s hard to interpret,” Mr. Hargrave said.
With the details in Claremont’s water bills as varied and numerous as the questions running through residents’ heads, Golden State officials sat down with the COURIER to answer questions surrounding the average water bill. Foothill District Manager Ben Lewis, Community Education Manager John Dewey and Julia Rivas, customer service representative for the city of Claremont, participated in the discussion.
Recognizing the confusion surrounding the topic of water, officials say your water bill’s latest format—now 4 pages long and updated with more detail—is based on the rationale that “more is better.”
“The whole idea is to give the customer a lot of information right away…their history of usage and their current usage,” Mr. Lewis said.
The first page is a summary of the monthly statement. The second page gives information about the California Public Utilities Commission and an explanation of some of the basic terms like CCF, the standard measurement of water. The third page breaks down the charges in greater detail, and the last page explains the reasons behind these charges.
Switching up rate schedules
A bill may be broken up into 2 different rate schedules if something occurred during the pay period to change the price of the CCF. This was the case during the August 15 to September 18 billing period, when an August 27 decision by the CPUC reduced the rates by less than one percent. Consequently, the water bill for that pay period was broken into 2 parts in order for GSW to begin charging customers at the modified rate, according to Ms. Rivas.
“It can happen when there is a change in the rates, or say this customer moved in on September 1… we would break it up for any customer who has had a change in their billing cycle,” she said.
Counting water by the numbers
It all comes down to the CCF, or standard measurement of water. Monthly payments are based on how many CCFs, or cubic feet, of water are used per household. One CCF or one unit is equal to 748 gallons of water.
“When we say a customer used 20 units in a given pay period, we mean they used 20 times 748 gallons, or 1500 gallons of water,” Mr. Lewis explained.
Each customer has a water meter that calculates monthly usage in these units. Each pay period may vary in length—the typical pay period is about a month, but could run as long as 34 days, according to Ms. Rivas. This was the case for the service period August 15 to September 18, which took Labor Day weekend into account.
Each month, a Golden State official reads the meter and subtracts the number of CCFs displayed on the meter from the number of CCFs recorded in the last pay period in order to determine how much was used for the current billing period.
Just as the amount of water used varies from one customer to another, the size of a water meter varies depending on how much water is typically consumed.
“The more the customer uses, the larger the meter,” Ms. Rivas said.
A household that uses more water requires a larger meter. Water meters range in size, but for a typical residence they are either 3-quarter-inch, one inch or five-eighths of an inch. Smaller and larger meters also exist, but a majority of Claremont residents (53 percent) have a one-inch meter, according to Mr. Dewey.
The American Water Works Association (AWWA) determines the standards for meter size, according to Mr. Lewis. However, in recent years, as guidelines have become more relaxed, there has been a growing demand and allowance for switching to smaller meters in an effort to cut costs, Ms. Rivas said. Smaller meters accrue fewer service charges and require fewer resources to maintain, lessening the overall cost.
Regardless of whether or not a resident requests to change meters or not, the California Public Utility Commission (CPUC) requires that meters be replaced within an allotted time. Meters smaller than one inch must be switched out within 20 years. One-inch meters are good for a maximum of 15 years. Larger meters expire after 10 years. While the GSW rep will knock on the door to let customers know their water will be shut off for about 30 minutes during work and will leave notice of the repair on the door, no other notice is required.
For a variety of reasons—whether upon request, because of an expiration date or due to a break in the meter—more than 800 meters within the city of Claremont have been replaced in the past several years, according to Mr. Dewey. In 2009, 474 were replaced, followed by 66 in 2010 and 270 in 2011.
With company costs come surcharges
Meter costs are just one of the factors that determine a customer’s service charge. Other factors include operating costs, which can include fixing infrastructure or general payroll.
“It’s how we recover a percentage of our fixed costs, whether you take water or not,” Mr. Lewis said. “It’s the things we do on a day-to-day basis. We still have to read the meters, we still have to provide service to you on a daily basis, so that’s where the service charge comes in.”
Roughly 30 percent of the total costs accumulated are put into the service charge and allocated to customers. How much a customer pays depends on the meter. Those with larger meters are going to pay more than those with smaller meters. A customer with a three-quarter-inch meter will pay about $23.15 per pay period, while the typical Claremont user with a one-inch meter will pay about $38.55. This difference was determined by a 2006 CPUC decision, with the idea that those with larger meters usually use more water, according to Mr. Dewey.
Another typical surcharge relates to the California Alternate Rate for Water (CARW) program. About 9840 people in Golden State Water’s Region 3 are a part of CARW, which grants the recipient up to $8 off each water bill. Those 9840 people make up roughly 10 percent of Region 3 customers, according to Mr. Dewey. Those customers who are a part of the program will have a credit in their bill. Those who do not qualify for the deduction are paying for those who do with a charge listed as “CARW Prog Adm Surcharge.” This fee is charged on a monthly basis.
Navigating the tiers
Ratepayers are charged for water usage based on a 3-tiered system in an attempt to encourage customers to conserve based on laws enacted by the CPUC, according to Mr. Lewis, who noted that the purpose of the tiered water system is to reduce outside water usage.
“About 60 to 70 percent of water is used outside the home,” he said.
In the 3-tiered system, Tier One provides the cheapest water rates, while Tier 3 is the most expensive. For the first 13 CCFs (9742 gallons), a customer is charged at the lowest rate, Tier One.
“The 13 CCF is based on the average winter usage,” Mr. Lewis said.
From 14 to 21 CCFs, the customer pays based on the Tier 2 rates, which are 15 percent higher than Tier One. Once the Tier 2 maximum has been exceeded, customers will be charged an additional 15 percent for every unit of water above 22 CCFs.
“It’s to help encourage customers to conserve where they can,” Ms. Rivas said.
Calculating WRAM and associated acronyms
The combined Water Revenue Adjustment Mechanism (WRAM) and Modified Cost Balancing Account (MCBA) charge is based on the difference between the company’s revenues and costs. The WRAM represents the revenue coming in and the MCBA represents the total cost for purchasing water, the power that pumps the water and the pumping tax.
The WRAM/MCBA credit and surcharge was created in 2009 as a means of making sure that the company had enough money from its ratepayers to continue business, according to Golden State Water. With state legislation mandating that water companies cut back their customers’ usage, Golden State officials say they needed to find a way to recover any potential losses.
“We wanted to make sure we had a way of keeping ourselves whole to cover our fixed costs,” Mr. Dewey said.
Every March, Golden State reviews whether the company’s projected costs for that year align with the revenue it ended up receiving. If Golden State’s revenues exceeded their costs, the extra money is given back to the customer in the form of a WRAM/MCBA credit. If they lost revenue, it comes up on the bill as a WRAM/MCBA surcharge, which is charged on a monthly basis until the full amount is paid back. The 2010 WRAM/MCBA surcharge is expected to sunset in March 2013. The 2011 charge will remain until November 2013.
Ratepayers will also notice a “2010 shortfall surcharge” on their water bills. Because of an 11-month delay in the process of getting requested rate increases from the CPUC for 2010-2012, Golden State Water was granted permission to make up for the loss of revenues with a surcharge that will sunset this December.
“We were essentially under-collecting for that first 11 months from what the CPUC said we could ultimately collect,” Mr. Dewey said.
Taxes and exemptions
Additional fees include a monthly CPUC fee and a city tax. While not all the fees and surcharges are avoidable, the city of Claremont does offer an exemption from the city tax for select Claremont residents who qualify. Individuals are eligible based on income level and the number of persons within the household. The maximum annual income for a household of one person requesting an exemption is no more than $29,550. For a household of 2 persons, the income must be no higher than $33,750. More detailed information can be obtained by calling 399-5453. Applications for the Utility User Tax Exemption and Sanitation/Sewer Fee Discount can be picked up at City Hall, 207 N. Harvard Ave.
Water bills may change again as Golden State Water pushes for another rate increase for 2013-2015. A settlement reached over the summer between the water company and ratepayer advocacy groups ended in an increase of 15.1 percent in 2013, with a 2 percent increase planned for 2014 and 1.8 percent to take effect in 2015. If approved by the CPUC, the rates will take effect this January.