According to a statement released by Southern California Edison, the utility is planning to eventually ask the California Public Utilities Commission for a rate increase later this year.
The issue stirred significant debate at the last regular meeting as newly installed Council member Pam Albers, and other members, suggested they preferred any discussion of proposed rate increases be discussed in open session rather than private meetings.
Therefore, a spokesman for Interim City Manager Denise Radde said this week the staff was planning to organize a special session of the city council where Edison will be invited to present their case for additional funding.
According to a statement released by Edison spokesman Robert Laffoon Villegas, Southern California Edison plans to make a water rate filing in third or fourth quarter of 2018 with the California Public Utilities Commission to address the need to recover incremental expenses, lost revenues and capital costs needed as a result of the drought along with other safety-related and infrastructure replacement projects. Even if SCE recovers all of these costs, it would still be under recovering its cost of service.
According to the statement, “SCE has begun discussions with City of Avalon representatives and all major Catalina Island stakeholders. SCE is committed to continuing this stakeholder process on various aspects of the filing and is seeking input on approaches that will help equitably share the burden of these costs between residents and businesses, and island visitors, who all benefit from the system.”
Edison claims incremental expenses between 2014 through 2017 incurred as a result of the drought is a major factor driving the need for additional revenue.
Also, the resulting lost revenues between 2014 through 2017 that represent the difference between SCE’s water sales forecast (previously approved by the CPUC) and actual sales as a result of the drought,” is a factor, he said.
In addition, Villegas said the utility company’s Catalina’s capital expenditures on projects placed in service since the last water rate increase filing in 2011 (e.g., new desalination plant, new Howlands well, and overhaul of the Million Gallon Tank), prompt a need as well.
While asking for more money, SCE is also attempting to mitigate the increases by meeting with major SCE stakeholders to discuss options to mitigate potential rate increases.
Here’s how Edison hopes to stabilize island utility costs to ratepayers:
• Adjusting rate design to align more closely with current data regarding water use by commercial and residential customers.
• Increasing the water customer CARE discount to align with the discount for electric utility customers to help mitigate potential bill increases on low-income customers.
• Proposing a 2-3 year rate increase phase-in period, to ease the impact of any one-time increase.
• Resetting the 2019 sales forecast to prevent future large over/under collections.
• Increasing the percentage of revenue collected from the monthly meter service charges compared to the revenue collected from the volumetric (water used) charges to spread the fixed costs more equitably among all water users.
• Proposing a visitor boat fee (Island residents would not be subject to the fee).
• Transferring a percentage of the annual cost of capital projects to SCE electric customers.
Regarding the timeline of the increase, the statement claims SCE will continue to meet with the city of Avalon and major Island stakeholders as well as ratepayer advocacy groups to inform them of and seek feedback on its upcoming rate increase filing.
“After the stakeholder process is completed, SCE expects to file with the California Public Utilities Commission (CPUC) and notify all customers of the requested rate increase in the third or fourth quarter of 2018, with new rates coming into effect after CPUC approval,” according to SCE.