City Council to Discuss San Jose Water Company’s Overbilling

The investor-owned water company that serves about half of Santa Clara County owes a fortune to ratepayers. The question is: how much?

San Jose Water Company admitted to overbilling customers for the past few years and offered to pay back $1.8 million. But a group of concerned citizens say that’s not nearly enough, arguing that the total may come to $13 million or more.

As state regulators investigate the company, the city of San Jose—the water company’s single largest customer—is trying to figure out its stake in the fight. The City Council on Tuesday will consider how to participate in the probe led by the California Public Utilities Commission (CPUC).

Rita Benton, who leads a grassroots group called WRATES—short for Water Rate Advocates for Transparency, Equity and Sustainability—uncovered the over-billing earlier this year. After confronting the water company, which was lobbying the state for yet another rate increase, Benton took the matter to the CPUC.

Once the state launched its inquiry, WRATES members began asking their respective elected officials to help them advocate on behalf of ratepayers. San Jose Councilman Don Rocha responded with a memo to the city’s Rules and Open Government Committee in August. Rocha’s memo directed staff to find out whether San Jose should keep a closer eye on the water company’s billing and assiduous rate increases.

Rocha’s directive has since been translated into a staff recommendation from Environmental Services director Kerrie Romanow, who wants the city to find out how much it has paid San Jose Water in the past six years. That information could then help the city decide how much to involve itself in the rate increases and whether it should take “a more proactive role” in advocating for rate-paying residents.

San Jose Water has repeatedly defended its billing practices as transparent and well regulated by the CPUC, which is tasked with approving each rate hike and drought surcharge. But in the eyes of WRATES, the transparency is undermined by the complexity of the company’s billing practices.

Through their own independent analysis, Benton and fellow WRATES founder Ginny Hoerger say they found that San Jose Water upped its rates by 73 percent since 2014. And though the company formally asks the CPUC to approve rate its hikes every three years in closely scrutinized deliberations, about half of all cost increases end up getting signed off by relatively perfunctory petitions called “advice letters.”

WRATES also found out that San Jose Water charges more than any other retailer that buys water from the Santa Clara Valley Water District, the South Bay’s largest wholesaler.

Because the water company is a subsidiary of a corporation called SJW Group, it’s tough to keep track of its finances. What’s clear from records filed with the U.S. Securities and Exchange Commission, however, is that the company has churned out record profits, with a stock gain of 89 percent in 2016.

San Jose Water Company customer Michael Metz called the utility’s rate hikes “rapacious” and “profit-optimizing.”

“SJ Council people,” he wrote in a letter, “we ask you to please help us, the victims of one of the few remaining private water companies in the United States. … Please help us fight them in any way you can.”

Even, he added, if that means putting the company under public, municipal control.

More from the San Jose City Council agenda for September 12, 2017:

  • More than a decade after forming its Sunshine Reform Task Force, the city fails to consistently meet disclosure requirements of reporting public subsidies greater than $1 million. That’s according to a new audit, which took a close look at how well the city responds to public records requests, posts calendar information online and holds lobbyists and elected officials accountable.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to jenniferw@metronews.com or follow her on Twitter at @jennwadsworth.

6 Comments

  1. San Jose Water Company has long demonstrated an inclination toward flimflammerry as evidenced by their partnership with Home Emergency Insurance Solutions. Allowing that company to disguise their pipe insurance solicitations as official SJWC correspondence in return for kickbacks demonstrates a real lack of respect for their customers. Not surprised to learn that they’ve been ripping us off too.
    Now if Benton and Hoerger would randomly choose any City supported nonprofit at which to direct their attention…

  2. Hmmm, Monopoly!
    Let’s see my last water bill here for 2 months $212. At my brothers house in Arizona that same amount of water would cost $86. Why yes I think SJWC is ripping us off with the help of the city and water district, just like everything the government has it’s sticky little fingers in.
    Can you spell Monopoly, like one party system.
    Can you belive this, 40 years ago my water bill was $9 a month right here in SJ.

    Thanks Jennifer you’re making my point these days.
    Maybe we need to privatize government, bring in some competition. Pick the good old boys you want to run your town.
    Angry Gun.

  3. Hold on to your wallet more. More water rate increase on the way for you and your neighbors. The water bill is mostly due the purchase price San Jose Water company pays to buy it from the Santa Clara Valley Water district. The water your get is coming from their rinconanda water plant. The reconstruction cost for that plant has quadrupled in the past 5 years because of mismanagement and contractor graft and consultant bilking the incompetent staff. Then you get the bill for repair to anderson dam where consultants have also bilked the water district in the millions. The water district is going to borrow $400 million to buy pacheco reservoir for local water supply. On September 12, the water board heard it will cost $12 million for their share to build the boondongle called California Water fix. Who do you think is going to pay for all these stuff? You. So, San Jose Water will just on the bill to you suckers. You should audit water district and san jose water. water district is sitting a pile of $500 million reserve and they are coming to you soon to ask for rate increase. hold on to your wallet.

  4. Every month they write me and tell me I use more than average and more then my neighbors, which is their way to substantiate the very high bills they send to me.
    I don’t trust the water company and believe they know they will be sued one day and have to pay a penalty and believe they have a war chest for that eventuality, but they will still have made a tidy profit from overcharging all of us for many years past.
    It would be great if they were absorbed by a private company who would be more responsible, plan better for times when we have lots of rain and droughts etc and provide a better service for the money we pay for the water we use.
    Maybe then we can start to learn again to trust the water company.

  5. Did anyone complaining that our water supply should be privatized READ the article or look up SJWC? It is a PRIVATE company, traded on the New York Stock Exchange with a market cap over $1Billion. A basic public good shouldn’t be privatized for shareholders to maximize profits.

  6. My water bill increased from 220$ to 570$ for the past 2 months. We were out of the country. I thought this was only me, maybe a water leak?, until I started reading on nextdoor many people in Almaden have the same problem. My neighbor’s bill more than doubled to 480$. What’s going on !!?