State utility regulators on Thursday put an end to a system that's allowed investor-owned water utilities including California Water Service to bill customers the cost difference between expected and actual water usage.
The California Public Utilities Commission, siding with its consumer-advocate arm, voted 4-1 to halt what are known as water-revenue adjustment mechanisms, which sometimes resulted in unexpected surcharges on ratepayers' monthly bills. Commissioner Liane M. Randolph cast the lone vote against the proposal.
The WRAM system was introduced 12 years ago as an incentive for ratepayers to conserve water. The idea then was to remove utilities' financial interest in selling their customers more water.
But critics of the system said it shielded utilities from the consequences of their own poor water-purchasing decisions while producing only negligible water savings. Consumer advocates argued that utilities that contracted to buy more water than their customers ended up using simply shifted to ratepayers the cost of that excess water.
The commission's consumer-advocate arm estimated that ending the WRAM system could save ratepayers between 10 percent and 15 percent on their bills, maybe more.
But supporters of the system, including Cal Water, tried to make the case that the proposed change would hurt low-volume, low-income water users.
The company said the WRAM system produced a 29 percent increase in water savings between 2008 and 2014, saving California nearly 8 billion gallons of water.
Elizabeth Echols, director of the CPUC's ratepayer advocacy arm, known as the Public Advocates Office, called the commission's vote Thursday a huge win for ratepayers.
“With many families experiencing financial hardships due to COVID-19, now more than ever it is important that millions of Californians will have more affordable and predictable water bills,” she said in a news release.
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