Department of Water and Power Rescinds Potential Commercial Rate Increase; Consultant Provides Financial Possibilities for Capital Improvement Projects

Commercial water rates for DWP customers are not going up—for the time being. In yesterday’s meeting of the Board of Commissioners of the Department of Water and Power, it was decided to amend a 2007 resolution that had called for commercial water rates to increase to $4.37 per ccf as of March 2009; this increase was not implemented at the time and, given the passing of the resolution, commercial water rates will, at present, remain at $3.22 per ccf. The June 23 meeting of the DWP did include a draft rate study presentation by consultant Shawn Koorn of HDR Engineering, Inc. His presentation outlined possibilities to fund capital improvement projects for DWP and, essentially, the options are to increase rates and/or get more grant funding, or postpone projects to support and update the water infrastructure. Per Koorn’s assessment, water non-users are not paying their proportional cost sharing amount, therefore he proposed a minimum bill for residential customers in the amount of $37.50 per month, which would include a predetermined number of ccfs of water at $1.50 each. In terms of balance among DWP customers, Koorn noted that non-users are paying 2.6% less, while average residential users are paying 1.6% more in terms of supporting the system’s infrastructure; it was also noted that commercial users are paying 3% more, and Rim Forest customers are at a level that is 8.1% less. As subsequently explained by DWP’s Water Resource Manager Bill LaHaye, “Here’s the key issue: DWP fixed costs are recovered in both the service charge (the fixed monthly charge) and water rates (based on water usage). If you don’t use water, we can’t recover the portion of our costs from water rates. The proposed plan will level the playing field.” Though no action was taken—nor will it be before additional discussions are had and, ultimately, the Big Bear Lake City Council has final approval on rate increases for DWP customers—the consultant suggested a 9% across the board increase over three years, though this could be implemented in a first year increase that levels the fees among residential, non-users, commercial, and customers in Rim Forest, starting with just a 7.5% increase for average residential customers, 6% for commercial, and low or no-users at 12% in a year one increase.