Blaming rising inflation and higher operating costs, San Jose Water is seeking to hike rates by more than 20 percent over the next three years, sparking the ire of residents who complain their monthly bill is already too high.
The company that delivers water to more than one million residents in parts of San Jose, Cupertino, Campbell, Monte Sereno, Los Gatos and Saratoga has asked the California Public Utilities Commission to allow it to increase rates between 2025 and 2027.
If approved, customers would see an average monthly increase of 12.3%, or $13.18, in 2025; 4%, or $4.82, in 2026, and 4.5%, or $5.68, in 2027. Currently, the average customer pays $107.44 a month, but under the new proposal, they could see that number increase to $131.12 a month by 2027.
San Jose Water, which is owned by the publicly traded SJW Group, is also asking the state commission if it can add a one-year monthly surcharge of $0.54 in 2015 to help them recoup more than $23 million in an effort to balance their books.
The proposal comes after San Jose Water implemented its latest approved rate increases on Jan. 1. On its website, the company said the average customer would see a 4.14%, or $4.71, monthly increase to their bills this year.
San Jose Water spokesperson Liann Walborsky, who attributed the potential rate increases to changes in the economy and increased operating expenses, said the extra funds would cover myriad projects.
The rate hikes are expected to fund $540 million in capital improvement programs, including replacing 24 miles of water mains annually, tackling PFAFs, or “forever chemicals,” in drinking water and expanding a non-potable recycled water system, among other initiatives. San Jose Water purchases its water from the Santa Clara Valley Water District.
“We need to do all of this to continue to deliver safe and reliable water,” Walborsky said. “We have to tackle all of these issues, as do utilities all over the United States.”
Patrick Kearns, a Los Gatos resident who is part of a local group called Water Rate Advocates for Transparency, Equity and Sustainability, said he wasn’t surprised by the proposed increase. For years, WRATES has contested San Jose Water’s rate hikes, which Kearns refers to as a “revenue increase that they justify.”
Ultimately, Kearns doesn’t expect the CPUC to approve the current proposed plan when commissioners vote on it later this year based on what’s happened in years past.
“It’s kind of a game, a shill,” he said. “We’ll ask for double, you give us half, and we’ll walk away happy.”
John Tang, San Jose Water’s vice president of regulatory affairs, said in a statement that they “are typically authorized less than the requested amounts as the CPUC and other parties review our expenses and capital needs for reasonableness.”
Monte Sereno Councilmember Bryan Mekechuk said he believes that San Jose Water’s rate increases and cost of services are higher than other regulated entities in the Bay Area.
“Ratepayers should not be burdened by corporate expenses incurred by San Jose Water Company,” Mekechuk said. “Those are shareholder expenses, not ratepayer expenses.”
The California Public Advocates Office, an independent consumer advocate at the CPUC, seems to agree.
On Feb. 5, they filed a protest motion claiming that “recent rate increases have significantly outpaced inflation and that SJWC’s proposed rates are increasing at an even higher rate relative to current and anticipated inflation.”