Apple Valley Hosts Public Hearing April 30 on Apple Valley Ranchos Water Rate Hike Request!

Public Participation Hearing Scheduled as Water Company Owned by Multi-Billion Dollar Investment Firm Proposes Substantial Rate Hikes in Apple Valley

Citizens Urged to Have Their Voices Heard April 30 as Town Discusses Apple Valley Ranchos Water Company’s Proposal to Raise Water Rates – Again

Apple Valley, CA – In less than one week, on Wednesday, April 30, two public participation hearings will be held in Apple Valley to discuss Apple Valley Ranchos Water Company’s (AVR) proposal to raise local water rates – again. The hearings will be hosted by the California Public Utilities Commission, the regulatory agency responsible for reviewing and approving AVR’s rate increases. Customers of AVR are urged to attend one of the two public hearings being held to voice their concerns as the company, now a wholly owned subsidiary of the multi-billion dollar Carlyle Group, has submitted an application to raise rates significantly over the next three years.

“We strongly urge all Apple Valley Ranchos customers to come out in force next week and voice their opinions,” said Apple Valley Mayor Art Bishop. “It will be up to the citizens of Apple Valley to make it known how deeply these rate hikes impact them.”

The following Public Participation Hearings have been scheduled:

Wednesday, April 30 at 1pm and 6pm
Apple Valley Conference Center
14975 Dale Evans Parkway
Apple Valley, CA 92307

During the hearing, customers will have the opportunity to discuss the rate hikes and learn more about AVR’s proposed increases. The company submitted an application with the California Public Utilities Commission in January of this year requesting authorization to substantially raise water rates for customers in Apple Valley over the next three years.

The company is asking for increases of 14.88% in 2015, 8.48% in 2016 and 8.19% in 2017. These rates would be compounding, meaning that the near 9% increase planned for 2016 would be on top of the proposed near 15% increase in 2015. Average users would see their water bills increase dramatically if AVR’s application is granted.

“This is not the first time rates have been raised,” said Mayor Bishop. “Apple Valley Ranchos has proposed, and been granted, rate hikes numerous times during the past decade. The proposed hikes would be difficult for many in Apple Valley to afford.”

The Town of Apple Valley intervened in the process to protect its interest and its residents’ interests, and it has been granted “party status” by the assigned Administrative Law Judge. As an affected party in the rate case, the Town of Apple Valley is strongly urging AVR customers to attend one of these meetings and make their concerns known.

More information on next week’s hearings can be found here Apple Valley Water Company Rate Case and more information on the Town of Apple Valley can be found here www.applevalley.org.

THE FOLLOWING INFORMATION IS IN ADDITION TO THE ABOVE OFFICIAL PRESS RELEASE:

NOTICE OF PUBLIC HEARINGS – WEDNESDAY, APRIL 30, 2014, 1:00 am and 6:00 pm, at the Town of Apple Valley Conference Center. 14975 Dale Evans Parkway, Apple Valley, CA 92307.

Requested Water Rate & Revenue Increases, Apple Valley Ranchos General Rate Case Application 14-01-002.

On Wednesday, April 30, 2014, an Administrative Law Judge from the California Public Utilities Commission (CPUC) in San Francisco will hear public testimony at the Town of Apple Valley Conference Center located at14975 Dale Evans Parkway, Apple Valley. On the same day, the judge will conduct two public hearings at 1:00 pm and 6:00 pm regarding the Apple Valley Ranchos Water Company (AVR) General Rate Case 14-01-002 request for a 31% rate increase and $7.5 million revenue increase during 2015 to 2017. If you oppose another water rate hike, you need to show up at one of the hearings on April 30 and express your opinion. Public comments are often limited to only 2.5 minutes. If you have many issues to present, bring your friends so each can talk about a different impact resulting from higher water bills.

Municipally-owned water companies (including the one in Victorville) are not regulated by the CPUC and can determine how much they will charge customers. Privately-owned utility companies that serve the public, such as Apple Valley Ranchos Water Company, are regulated by the CPUC. Every three years private utility companies can ask the CPUC for permission to raise the water prices they charge customers, and the CPUC always allows them to increase rates. How much more depends upon many factors including how many customers complain.

EXPECT HIGHER WATER BILLS

On January 2, 2014, AVR filed Application 14-01-002 with the CPUC requesting a general rate and revenue increase for the three years 2015 to 2017 and mailed a Notice of Application to customers with their water bills. (See chart below, on this page.)
Presently, there is a $2,541,338 disagreement between AVR and the CPUC about how much increased revenue AVR will be allowed to charge customers. The purpose of the April 30th hearing will be to receive evidence that the Administrative Law Judge (ALJ) will use to base his decision. The ALJ will consider all public comments from the hearing regarding AVR’s proposed application, and those comments will be included in the formal record of this General Rate Case and will become public record. The ALJ will issue a proposed decision to be presented to the five deciding CPUC Commissioners. The Commissioners will issue a final decision that may adopt, amend, or modify all or part of the ALJ’s proposed decision. The final decision may differ from AVR’s original proposed request.

NOTICE OF PUBLIC HEARING, April 30, 2014, According to AVR’s own estimate of “Customer Impact,” if the CPUC approves AVR’s application for general rate increases, an average residential customer, with a 5/8” by 3/4” meter, who continues an average water usage of 33.18 hundred cubic feet (Ccf) every two months, will have to pay more for water. If the customer’s current bi-monthly bill is $130.15, their bill will increase by $17.95 (13.70%) to $148.10 in 2015 and will escalate to $171.97 in 2017. That single-family residential customer will pay at least $107.70 more in 2015 and $250.02 more in 2017 for annual water costs.

In 2015, AVR proposes to increase its water revenue in every one of 10 classes of customers: residential users (15.18% increase), who are the largest source of AVR’s revenue; the Apple Valley Golf Course (18.40% increase); business customers (13.62% increase); industrial customers (14.04%); public authority (16.28%); private fire service (14.92%); public authority irrigation (12.31%); irrigation pressure (15.94%); irrigation gravity (11.45%); and temporary construction (9.81%). When all customer categories are combined, AVR’s total revenue for 2015 increases by 14.97%.

AVR also proposes to continue its three-tiered rate structure that is applicable only to single-family residential customers. Moreover, AVR wants to hike the price differential between the tiers (the water quantity charge) from 10% to 12%. Therefore, when a residential customer exceeds his Tier I allotment of water and shifts to Tier II, he pays 12% more for Tier II and Tier III and Tier IV water instead of only paying 10% more for each higher tier, which is the present penalty charged. On top of these proposed rate increases, AVR also wants to reduce the Tier I water allocation for single-family residences from 13 Ccf to only 12 Ccf.

PRIMARY REASON FOR RATE INCREASES

According to AVR, annual residential water use in 2015 is projected to decrease 14.59%. [Customers are conserving water and 6,000 people have left Apple Valley since 2008.] Projected water sales for 2015-2017 are significantly below those used to develop 2014 water rates. When 2014 water rates are applied to the lower projected water sales for 2015, AVR’s revenues fall below the CPUC authorized 2014 revenues. Consequently, the percentage increase in rates necessary to generate the requested 2015 revenues is significantly higher than the 2.03% increase that would have resulted if sales forecasts had remained at 2014 levels. As AVR water rates continue to escalate, customers will conserve even more water and many people will be forced to move to places where they can afford water. As AVR sells less water, the remaining customers will be saddled with higher bills while they use less and less water.

PUBLIC COMMENTS –

The CPUC would like to hear from you! If you want to comment on, or informally protest AVR’s application, contact the CPUC Public Advisor’s Office, 505 Van Ness Ave., Room 2103, San Francisco, CA 94102. The telephone numbers are: 1-866-849-8390 (toll free); 415-703-2074; 1-866-836-7825 (TTY)

Please reference Apple Valley Ranchos General Rate Case Application No.14-01-002 when sending any written correspondence to the CPUC. All public comments become part of the public correspondence file and public record and are circulated to the assigned ALJ, the Commissioners, and appropriate internal CPUC staff for review.

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