In response to questions raised by California Water Service’s (Cal Water) customers in Oroville, the water utility recently commissioned an independent study to compare its water bills with those paid by customers of the neighboring government-owned water supplier, South Feather Water & Power Agency (SFWPA). Dr. David Sosa, Ph.D., a Principal at Analysis Group, Inc. (AGI) who conducted the study, identified three factors to take into account for accurate comparison of water rates: revenue sources, capital spending and taxes.
As noted in AGI’s press release, Sosa found, “SFWPA’s rates were heavily subsidized by other revenue sources, whereas Cal Water’s rates covered all of its operating expenses. In addition, Cal Water made substantially higher capital investments than SFWPA in order to maintain service quality. Finally, as a private utility, Cal Water provided additional tax benefits.”
After taking into account the three factors, Sosa concluded Cal Water’s Oroville customers’ monthly residential water bills average $54 compared to SFWPA’s at $64.
Cal Water’s spokesperson Shannon Dean commented in a company press release, “We wanted to provide our customers with a fair, unbiased, and accurate study on a subject as important as water rates. We are committed to providing quality, service, and value to our customers, and this study helps explain how we are accomplishing that goal.”
This study supports AGI’s previous research on the costly nature of water system takeovers covered in an article in the January edition of On Tap.
