Sacramento, Calif. – As concerns over water affordability mount, the California Water Association applauds Governor Gavin Newsom for signing AB 428 into law. The measure addresses the hidden cost drivers of insurance that impact utilities and the communities they serve. The bill will allow water corporations, mutual water companies and public water agencies to collaborate on insurance through the formation of joint powers agreements (JPAs), rather than securing it individually. As enacted, this law will reduce risk, lower costs, create administrative efficiencies and stronger financial security – benefits that can be passed down to ratepayers.
Authored by Assemblymember Blanca Rubio, AB 428 received broad bipartisan support for its commonsense approach to including water corporations, or investor-owned utilities, in already-established practices for developing JPAs to pool insurance resources.
“The California Water Association applauds the enactment of Assembly Bill 428 for its ability to create cost savings and expanded insurance coverage that directly benefits California’s water customers,” said Executive Director Jennifer Capitolo.
“As California experiences more emergencies – extreme wildfires, floods, and droughts – insurers are reassessing risk and raising premiums for utilities statewide. This pattern threatens water affordability for communities across the state, especially for smaller utilities that lack the financial buffer of larger systems. We look forward to working with our partners to implement this measure as a means to improve water affordability.”
Once enacted, the public utilities regulated by the California Public Utilities Commission (CPUC) will be able to outline cost savings associated with JPAs and demonstrate how the savings are used to benefit ratepayers in their annual reports.
“With the cost of everything rising in California, families are understandably concerned about their water bills,” said Assemblywoman Blanca Rubio. “Assembly Bill 428 addresses that concern by lowering skyrocketing insurance costs for utilities and ensuring those savings are directly passed on to customers in the form of lower bills.”
CWA has been advancing an affordability framework to address this and many other cost-saving initiatives for California ratepayers. AB 428’s focus on affordability aligns with our mission to balance investments in operations and infrastructure with affordability for customers. Access to water is a fundamental human right, and we are proud to support legislation that safeguards affordable, safe, clean and reliable water for all.
