New Op-Ed Highlights Growing Financial Strain on Water Utilities
A newly published op-ed in The Sacramento Bee by Jennifer Lukins, General Manager of Lukins Brothers Water Company, sheds light on an alarming issue impacting California’s water utilities: skyrocketing insurance costs driven by wildfire risks.
For Lukins Brothers Water Company in South Lake Tahoe, these rising costs have had a direct impact on customers. Despite never filing an insurance claim, the company’s premiums jumped by more than 200%, from $56,000 in 2021 to $299,000 in 2023. This forced the company to pass along a $21 monthly increase per customer just to maintain coverage.
Why This Matters for Water Affordability
As California experiences more 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.
Lukins’ op-ed also highlights potential solutions, including Assembly Bill 428, which would allow investor-owned water utilities to join Joint Powers Authorities (JPAs). This approach would pool insurance risk across multiple entities, helping stabilize costs and prevent steep rate hikes for customers.
A Call to Action
Water affordability is a growing concern in California, and policymakers must take action to address hidden cost drivers like insurance that impact both utilities and the communities they serve.
Read the full op-ed in The Sacramento Bee: https://www.sacbee.com/opinion/op-ed/article301865944.html
CWA will continue to advocate for policy solutions that protect both water reliability and affordability for all Californians. Stay tuned for updates on AB 428 and other efforts to address rising operational costs for water providers.
