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.
- Replacing the San Jose Police Department’s 16-year-old helicopter will cost about $4.7 million, if the council approves a proposal to buy a new on from police Chief Eddie Garcia.
- The city dismissed 40 illegal fireworks citations after media reports pointed out that they may have been issued with little evidence or due process.
WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260