Department of Water and Power Proposes Two Rate Increases; Three Public Meetings Scheduled Prior to City Council Vote

The Department of Water and Power has proposed a rate increase for both residential and commercial customers and, if ultimately approved, the first increase would take effect in January 2010. The DWP’s rate increase would vary for each of three components, those being residential, commercial and for customers in Rim Forest. As explained by DWP’s General Manager Joel Dickson, “The overall system-wide increase is nine percent, which won’t be applied across-the-board, but that will be the average increase. It is 12 percent for residential and 5.5 percent for commercial, and then 12 percent for Rim Forest customers, who are mostly residential.” Though the 2010 increase for residential customers in the Big Bear Valley is 12 percent, the new residential rate design will actually amount to less for full-time residents. As Dickson tells KBHR, “About 70 percent of our customers do not live here on a full-time basis, so about 30 percent of our monthly bills are for ‘no usage.’ We have another 45 percent whose bills are between 1 and 4 ccfs [of water per month], so we’ve set a minimum bill equal to 4 ccfs—and, by setting a minimum bill, not every customer who is a residential customer will experience a 12 percent increase. A typical, full-time customer uses 6 ccfs per month, and their bill will actually decrease by an average of 2 percent per month—that’s a 93 cents decrease per month, or 2.18 percent to be more exact.” Dickson explains that the fluctuation is due to the number of residential customers who use little-to-no water, yet still incur cost to the agency. “We still have to read the meter,” he says, “and costs are incurred, whether they are using water or not. So, a minimum bill that is equal to 4 ccfs brings them to equal cost for service. So, basically the rate increase is 12 percent, but most of our residential customers will see a reduction, but a ‘zero usage’ bill will increase $6.93, or 22.86 percent. Over a period of history, the part-time customer who lives down the hill was being subsidized by the full-time residential customer. This new rate design will eliminate the majority of the subsidy. It’s a similar rate structure to what we have today, which includes five tiers that promote conservation, which we still need to promote.” In addition to the rate increase for 2010, DWP has proposed a second increase of nine percent, across-the-board, to take effect in July 2011. Prior to any decision-making, however, the DWP will first hold two town hall meetings, details of which will be mailed to customers this month. Those meetings are scheduled for Wednesday, September 9 at 6pm and Saturday, September 19 at 10am; both meetings will be held at the Municipal Water District offices, at 40524 Lakeview Drive in Big Bear Lake. Dickson says that these meetings will offer the public opportunity to ask questions, once the rate structure is explained. “Before we can present it to City Council,” adds Dickson, “we have to hold a protest hearing, and that will be October 6. We will send out notices to all of our customers, and if we receive a major written protest, then we can’t implement the proposed rate increase. The rate increase is dead then, and won’t even go to City Council.” As outlined in the letter going to DWP customers in August, the proposed rate increases for January 2010 and July 2011 are to 1) recover costs associated with the DWP’s operation and maintenance of water production, storage and distribution; 2) fund capital projects required to supply water that meets all state and federal standards; and 3) replace aging infrastructure in order to improve fire protection within the Big Bear Valley.