Over the last few weeks, you may have seen some comments online about Cal Water proposing to increase water rates in Bakersfield. This information is not accurate. Cal Water HAS NOT proposed to increase water rates in Bakersfield by 41%.
The confusion stems from the fact that there are two primary water systems in Bakersfield. One of those systems is owned and operated by Cal Water. This system is highlighted in orange in the map below. The City of Bakersfield does not set the water rates for Cal Water’s system; they are set by an independent state agency.
The other water system is owned by the City of Bakersfield. This system is highlighted in white in the map below. While Cal Water operates this system on behalf of the City and the bills for customers in this system come from Cal Water, the City Council is responsible for setting water rates in this area.
Who proposed to increase water rates?
The City of Bakersfield has proposed to increase water rates in order to comply with a new regulation adopted by the State Water Resources Control Board. Cal Water HAS NOT proposed to increase the water rates paid by customers in its service area in order to comply with these regulations.
Who would be affected by the City of Bakersfield’s proposed rate increase?
The only residents that would be affected by the City’s proposed rate increase are those customers that are served by the City of Bakersfield’s water system, which primarily serves the western portion of the City. The boundaries of the City’s water system are highlighted in white in the map below. Customers that are not served by the City’s water system are not affected by the proposed rate increase.
Why did the City of Bakersfield propose this rate increase?
Earlier this summer, the State Water Resources Control Board adopted a water quality regulation for 1,2,3-Trichloropropane, or TCP. In order to meet the deadline to comply with the new regulation, the City will need to build a number of new treatment facilities. Those projects will cost about $55 million. In order to finance the construction costs the City needs to issue municipal bonds—or debt. To meet the obligations of those bonds, the City will need to increase its rates. In other words, if the City does not increase its water rates, it will not be able to meet its bond obligations and will not be able to construct the new treatment facilities needed to comply with the new water quality regulations.
Why doesn’t Cal Water have to increase its rates to comply with the new regulation?
Cal Water has to comply with the same water quality regulations as the City, and we also have to construct new treatment facilities in our water system in Bakersfield. However, as a private company, we have access to various sources of capital that the City does not have access. We will be using these resources to pay the upfront costs of constructing the treatment facilities needed in our water system. And we’ve filed a lawsuit against the parties responsible for this contaminant—TCP—getting into the water supply. Our goal is to recover enough money from that lawsuit so that our customers do not have to shoulder any of the responsibility for constructing the new treatment facilities.
Why didn’t the City file a lawsuit against the responsible parties?
The City and Cal Water are actually working together in the lawsuit against the parties responsible for TCP getting into the water supply. Unfortunately, the lawsuit will not be finished by the time that the City needs to begin constructing the new treatment facilities in order to meet the compliance deadlines set by the state. The City can’t wait for the lawsuit to conclude before constructing the new treatment facilities.
Where can I get additional information?
The City of Bakersfield sent a notice to the customers affected by its proposed rate increase. You can also contact the City by phone at (661) 326-3715 or email at email@example.com.