California American Water Announces New Water Rates For Businesses

California American Water is sending out a survey this week to its businesses and public agencies in Monterey County that will begin a new way of billing for those customers.

Last year, a group of local businesses, led by the Coalition of Peninsula Businesses, approached California American Water about changing the way it charges commercial customers. For years, businesses’ water bills were based on an individual allotment. The allotment was calculated on criteria involving the type of business, square footage, number of tables – if a restaurant, and other factors. If businesses exceeded their allotment they were charged higher rates in an effort to encourage water conservation.

“The problem with this system was that the allotments were based on average consumption for a particular business type,” said Bob McKenzie, a water issues consultant for the Coalition of Peninsula Businesses. “That means that if a business is doing very well it would be penalized.”

Together with the Coalition, the Monterey Peninsula Water Management District and the Division of Ratepayer Advocates, California American Water has proposed a new non-residential billing system to the California Public Utilities Commission that does not depend on allotments. Instead, the water provider will determine whether or not a business is complying with best management practices in water conservation and base rates on that information.

“The idea,” said California American Water operations manager for the Coastal Division Eric Sabolsice, “is that if a business is doing all the right things to save water, they should be charged lower rates.”

In order to implement the new system, California American Water is sending a survey to all non-residential customers this week to determine which category of best management practice compliance each customer falls into.

“It is very important that customers fill out this survey and return it to us,” said Sabolsice. “If customers do not fill out the survey, they will be automatically placed in the highest category of rates – which is two and a half times the cost of the lowest category.”

Sabolsice added that when filling out the survey, if customers do not know how to answer a question, California American Water will assist them. Customers who return a survey indicating they do not know the answer to a question will not be automatically placed in the highest category, rather they will be contacted by a California American Water representative. “The key is to turn in the survey,” he said.

Non-residential customers will receive an auto-call message this week alerting them the survey is on its way. Surveys should begin arriving the week of August 12 and are due by September 25. The new rates are anticipated to be implemented in October. Before the survey due date, affected customers will also receive a postcard and second auto-dialer message to remind them to complete and return the survey. The company also plans to run newspaper ads and is reaching out to business organizations for assistance in spreading the word. Copies of the survey and the new rate design – in English and Spanish – are available on the company’s website at www.calamwater.com.

The new rate design has yet to be voted on by the California Public Utilities Commission. It is the result of a settlement agreement between California American Water, the Division of Ratepayer Advocates, the Monterey Peninsula Water Management District and the Coalition of Peninsula Businesses, among others. It is anticipated the agreement will be approved with new rates effective in October. The process of gathering survey information, as part of the settlement agreement, is scheduled to begin now in order to ensure customers are properly categorized before October.

California American Water, a wholly owned subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and/or wastewater services to approximately 600,000 people.

Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states, and parts of Canada. More information can be found by visiting www.amwater.com.

Copyright Business Wire 2010

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