The cost of water may soon increase for some local residents and businesses.

California American Water, a private firm that serves 18,600 customers in Newbury Park and some areas of Thousand Oaks, has filed a request for a rate increase with the California Public Utilities Commission.

In a letter recently mailed to customers, Cal Am cited higher rates from its supplier, the Calleguas Municipal Water District, as the reason for the rate hike.

Customers would see a 10.8 percent increase in their bills for 2006, totaling nearly $2 million in revenue for the company. If approved, the increase would be effective this month.

The company is also seeking recovery of nearly $900,000 in undercollected purchased water and power expense, according to the letter, due to higher rates in 2005 from Calleguas and Southern California Edison. A surcharge would be added to bills for two years to recover those costs.

A public franchise agreement with Cal Am, approved last month by the city council, gives the company sole right-of-way to provide water service.

The agreement is part of a 2004 settlement made by the city with Cal Am that included the negotiation of a new franchise agreement. The city, along with others in the state, unsuccessfully tried to block a merger before the Public Utilities Commission between Cal Am and a Germanbased corporation. The city was able to negotiate a rate decrease and Cal Am did institute a rate cut of about 6.3 percent that took effect in January 2005. According to the letter mailed out, "The revenue increases requested . . . will recover only the added costs. . . . These requests will not increase operating income to Cal Am."

--Sophia Fischer