Rishi Kumar was very concerned to find San Jose Water Company’s (SJWC) profit balloon in a drought year, from a baseline of $22M to $52M - see the table below - based on surcharges, while citizens conserved water. The water bills had skyrocketed. Later, Rishi’s frustration grew when San Jose Water filed for another surcharge due to “undercollection” as their customers had conserved water in a drought. Many such citizen complaints turned Rishi into a water activist. So far, Rishi has led efforts to either reject, reduce or suspend 9 San Jose Water rate increase proposals.
Rishi Kumar has challenged a profitable-powerful San Jose Water Company with their many water rate increase proposals. He is the only elected leader from 6 Silicon Valley cities leading charge since 2016; so far, 9 water rates have been pushed back successfully for a million residents.
Rishi’s engagement with SJWC’s water rate hike issue began in August 2016 with hosting a community meeting between citizens, San Jose Water Company and Santa Clara Valley Water District, when a spike in water bill was first observed. Rishi’s modus operandi to push back SJWC’s rate increases was soon established; file protests directed at the California Public Utility Commission (CPUC) - the decision making authority - for every rate increase proposal that was presented. A water information page (www.RishiKumar.com/water) was established for this explicit purpose. A simple protest framework had been established - a winning formula - that was replicated again and again, A mobile app was rolled out in the Apple and Android platform to make protests easier, sending thousands of protest letters to CPUC and Office of Rate Payers Advocate (ORA). Here is the story so far.
With the growing population of Silicon Valley, availability of water has become a source of concern. Communities of Saratoga, Monte Sereno, Los Gatos, Campbell and San Jose are experiencing significant angst due to the increasing water bills first created during the drought years (2013-2016) with surcharges (penalties) in place. Below are the mechanics of the push back against San Jose Water Company's rate increases that Rishi has led, collaborating with some of the other elected leaders. For the news coverage, click here.
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Subject: Against Advice Letter 596
Dear President Reynolds and commissioners,
Thank you for your continued dedication and efforts in thoroughly assessing the rate filings from San Jose Water and taking decisive action by rejecting or suspending numerous requests in recent years. Your vigilance is greatly appreciated.
Today, I kindly ask for your support once more in rejecting the latest filing:
I am against Advice Letter 596 due to criteria 6.
The requested relief in the advice letter is unfair, unreasonable, and discriminatory. Granting this rate increase would impose unjust treatment on San Jose Water (SJW) customers, as other water customers in the state are not facing these repetitive and punitive rate hikes.
Please take a moment to review the petition advocating for the replacement of SJWC (San Jose Water Company) with a municipal utility company. You can find the petition at http://www.tinyurl.com/noMoreSJWC. It's worth noting that over 6500 individuals, including myself, have already signed in support of this initiative.
EXCESSIVE PROFITS AMIDST RATEPAYER STRUGGLES
Over the course of 11 years, San Jose Water Company (SJWC) has amassed an astounding net after-tax income of $469 million. Meanwhile, residents of San Jose, Campbell, Cupertino, Los Gatos, Monte Sereno, and Saratoga continue to face frustration and financial strain.
I strongly urge the PUC to refrain from approving any further rate increases until San Jose Water Company establishes a more equitable process and develops a consumption model that is realistic and accommodating to the varying water allotments and rationing scenarios faced by the aforementioned communities.
It is worth noting that San Jose Water's net income last year reached an all-time high of $61.5 million, the highest in a century. In the past 11 years alone, SJWC has consistently generated significant profits, surpassing $400 million in net income.
FAILED INFRASTRUCTURE UPGRADE: A lack of Smart Meters
Despite being the 3rd largest water utility company in the nation, San Jose Water Company (SJW) has failed to upgrade its infrastructure to incorporate smart meters, which could enable efficient management of water usage through telemetric means. Surprisingly, the California Public Utilities Commission (CPUC) has overlooked this oversight.
It raises a pertinent question: Why does the CPUC grant rate increases to SJW, boosting their profits, without providing any tangible benefits to the ratepayers?
REASSESSING CALIFORNIA'S RESPONSE TO RECURRING DROUGHTS
It is crucial for us to address the larger issue of California droughts strategically, considering the interconnectedness of various factors such as agriculture, almond farmers, urban economies, and marine life. We must prioritize implementing efficiencies across all aspects affected by dynamic changes induced by climate change, population density shifts, water demand fluctuations, and more. Additionally, it is imperative to develop a comprehensive plan for expanding water reservoirs in California.
It is worth noting that California's century-old water system was designed for a population of 10 million people. Today, our local population has increased by almost 400%, and the depletion of the Sierra snowpack is a direct consequence of significant climate change. Despite the push for super high-density housing in our community, there is a glaring absence of a water expansion plan to accommodate this influx of residents.
These are legitimate questions being raised within our community, and they demand serious consideration and action.
I CALL FOR AN AUDIT OF SJWC
I urge the CPUC to conduct a thorough forensic audit of SJWC's operations and finances, comparing them to those of other water utilities under CPUC's jurisdiction.
Over the past 11 years, SJWC has accumulated a net after-tax income of $469 million. It is crucial to scrutinize how these funds have been allocated, specifically in three key areas:
Infrastructure improvement Fulfilling water quality requirements
Addressing cybersecurity and data privacy projects
Analyze San Jose Water's financial records to determine the investments made in these areas over the past decade. We need CPUC's assistance in unveiling the true operating costs and financial projections. It is imperative for SJWC to prioritize service focus and regain operational efficiency while striving for market-rate competitiveness.
Please consider employing comparison metrics encompassing all public and private utilities in the Bay Area to determine appropriate cost of capital adjustments and future rate increases. This comprehensive evaluation will ensure fairness and transparency in the decision-making process. Halt any rate increases until this is completed.
EXAMINING THE DISTURBING & ALARMING DETAILS
I strongly encourage you to visit https://tinyurl.com/SJWCAppendix for a comprehensive overview of summary financial data, historical rate increases, and relevant case studies A through J. It is essential to consider the magnitude of the rate hikes that have already been implemented.
The truth is, our water rates experienced a dramatic surge during the years of drought and never returned to a state of "normalcy." These increases far exceeded the rate of inflation at that time. Moreover, when compared to other municipal water districts, those unfortunate enough to reside within SJWC's jurisdiction have faced unprecedented escalations in rates.
The claim made by SJWC that "a typical customer with a ¾-inch meter using 11 Ccf of water per month would see a bill increase of approximately $xyz per month" offers little solace and raises doubts about its validity.
SJWC’s DECEPTIVE DOUBLE STANDARD
In the midst of the 2016 drought, our local community took voluntary measures to reduce our water consumption. However, instead of recognizing and appreciating our efforts, SJWC shockingly demanded an increase in our water rates, citing the decrease in consumption as the reason. It is truly absurd for a monopolistic utility to urge conservation, only to respond with price hikes when consumption drops. This cycle of deceit keeps repeating itself, leaving the customers of San Jose Water at the receiving end. It is imperative to put an end to this destructive pattern!
GRATITUDE FOR YOUR ATTENTIVENESS TO OUR EMAILS
***A MESSAGE OF GRATITUDE TO CPUC COMMISSIONERS, STAFF, AND ORA: We extend our heartfelt appreciation for your diligent efforts in taking a strong and calculated stance against San Jose Water Company in recent years.
As consumers, we may lack choice, but we refuse to be voiceless. It is essential to recognize that San Jose Water Company holds a monopoly position. SJWC has adopted a simplistic approach of manipulating the system, presenting Advice Letters and Rate Case filings to the CPUC, seeking and often receiving approvals. We thank you for thoroughly scrutinizing these submissions from San Jose Water Company and for already rejecting a few of their proposals. It is crucial for SJWC to prioritize customer satisfaction and foster a more service-oriented approach.
HALT RATE INCREASES IMMEDIATELY
I firmly appeal to the CPUC to refrain from granting approval to any further rate increase requests unless San Jose Water Company (SJWC) can demonstrate equitable benchmarking in line with other water utilities.
I implore you to end the cycle of automatic approvals. Let us put an end to these incessant rate hikes.
With utmost respect, I kindly request that the PUC take necessary measures to safeguard the interests of California citizens from the unjustifiable rate increases imposed by San Jose Water Company.
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