By Miguel Gonzalez & Nolan Smith
High Desert Daily
(Apple Valley)– Citing reductions in fixed cost recovery due to declining sales and increasing costs of infrastructure and operations, Apple Valley Ranchos Water Company (AVRWC) will seek to increase rates before the California Public Utilities Commission (CPUC).
If approved, the proposed three-year overall rate increase would add by 2017 an extra 69 cents a day to average bills for typical residential customers.
According to officials at the water company, the rate adjustment, though not popular, is necessary to guarantee water quality and service reliability for AVRWC customers.
“We are a service with operations which primarily have a fixed cost base regardless of how much water our customers use,” AVRWC General Manager, Scott Weldy, told High Desert Daily. “This proposed increase stems in large part from continuous challenges to system reliability and the need to replace aging pipes and other necessary plant for operations. Service reliability and quality of water we deliver to our customers is paramount for us.”
Weldy also explained that the main factors for the adjustment of rates included; ongoing infrastructure investments, such as: pipeline repairs and replacement, delivery systems improvements; operations and maintenance expenses, such as: water treatment, energy, and increased regulatory costs; and reductions in fixed cost recovery due to declining sales. Since January 2011, AVRWC has invested approximately $16.6 million dollars in repairing and replacing pipeline, wells, and needed water infrastructure in Apple Valley.
The petition to increase rates will give customers an opportunity to comment on the subject before the CPUC decides to set rates based on reasonable costs of providing water service. AVRWC does not set water rates; the State of California is responsible for rate setting, and the process by which rates are set, through the CPUC.
Weldy recently made a presentation to the Apple Valley Town Council explaining AVRWC’s position.
Town Mayor Art Bishop said the rate revision is necessary to keep quality of water at its highest “Nobody likes rate increases, but the reality is that the costs of delivering water in California have skyrocketed and those factors have put our town in this situation.”
The increase of water rates is not exclusive to Apple Valley or the High Desert, according to California Water Association Executive Director Jack Hawks. “It’s actually a situation water agencies all across the country are facing. Virtually all utilities are facing cost pressures related to water supply and infrastructure costs,” Hawks said in phone interview.
Weldy said that over the next four years, AVRWC plans to invest $45 million in much needed water infrastructure such as wells, pipes, reservoirs and fire hydrants. “It will help with continuing to offer reliable service in providing everything from drinking water to water for fire protection,” said Weldy, adding that in 2013, AVRWC installed 22,895 feet of pipe.
Apple Valley Ranchos has also participated in aggressive programs designed to conserve water such as the Mojave Water Agency’s Cash for Grass program. “Residents of the Town of Apple Valley are the poster children for conservation. Back in 2007, the average residential customer was using an average of 293 units of water, 100 cubic feet of water is our unit of measurement. In 2013, that’s down to 198 units of water. That is a 32 percent reduction. For Cash for Grass participation, we have now exceeded two and a half million square feet of turf removed, that’s just the folks that participated in the cash for grass program. That’s about 50 football fields.”
Hawks explained that on average general rate cases for utilities are heard every three years. “It is important for utilities to keep costs and rates up to date to avoid larger increases later on. We can expect that over the next 10 years ”
Since 1947, AVRWC has been a part of the High Desert, and growing along with it. From the time the doors opened up to the present, AVRW has grown from a handful of employees to forty-two skilled and highly trained individuals determined to deliver an affordable and wholesome product. These skilled employees are proud members of our community and give back in many ways; as consumers supporting businesses, as homeowners adding to the tax base, and as volunteers assisting various charities.
Weldy explained that without water there can be no growth; or life, for that matter and while it is never pleasant to talk about higher costs of anything; rising fuel and energy prices affect us all and, along with compliance with government oversight, add to the cost of doing business.
To answer questions about the proposed increase, AVRWC will host an informative meeting on April 2 at Apple Valley’s Town Center at 6 pm. “I would encourage all residents to attend this session and get answers. Apple Valley Ranchos has always been a good partner to our town and this will be a good chance for the public to ask questions.”
Weldy said the growing pains faced by the utilities now are necessary to ensure a system of infrastructure that can handle future water management. “Ranchos Water continues to combat aging infrastructure by replacing needed facilities. Every generation plants seeds for today and future generations.”