Utilities Commission approves water rate hike

The California Public Utilities Commission recently approved new conservation rate designs for California American Water customers in Thousand Oaks, Newbury Park and Camarillo. The new rates are designed to encourage conservation by increasing the cost per unit of water as consumption increases.

The new rate structure is a result of cooperative negotiations between California American Water, the utilities commission's Division of Ratepayer Advocates and other parties.

The commission deemed the plan a pilot program and will examine it to determine the effectiveness of the new rate structure in a future general case rate. "The tiered rate structure wilbenefit customers who conserve water," said California American Water president Kent Turner"The increasing costs based on consumption encourage high volume water users to examine their consumption and take advantage of the conservation programs and rebates we offer our customers."

The model represents a departure from the single-rate structure commonly used in the past. The effect of the new structure isn't expected to change overall revenues that California American Water receives because the amount of the fixed meter charge will be decreased for all customers.

The usage charge of residential customers is broken up into three tiers based on their water usage. The customers in the lowest use tier will see a slightly higher charge for each unit of water and therefore an overall decrease in their bill due to the meter charge decreasing.

Customers in the highest use tier will see an increase in their rates as a result of higher charges for each unit of water.

The plan will enable California American Water to continue to fund infrastructure investment projects while promoting conservation.

The three tiers are based on historical average water usage in each community. As customers' water usage increases above historical averages so do the charges for each additional unit of water. Tier two water usage will be charged 15 percent more than tier one, and tier three water usage will increase charges 25 percent over tier one charges.

For more information, visit www.amwater.com.