Beginning in January 2020, there will be three changes to water rates for San Jose Water customers. These changes include:
General Rate Case – Year 2 Annual Review
Expiration of Balancing and Memorandum Account Surcharge
Refunds from the 2019 Tax Memorandum Account
To keep you in the loop, here’s a look at each change and how it may affect you.
General Rate Case – Year 2 Annual Review
San Jose Water customers will have new water rates going into effect on January 1, 2020. Per Advice Letter 541, approved by the California Public Utilities Commission (CPUC), the monthly bill for a residential customer using 11 CCF of water with a 3/4-inch meter will increase $2.02, or 2.09%. Bills will be prorated at both the new and old rate, depending on your billing date.
How are water rates set?
San Jose Water files a General Rate Case (GRC) with the CPUC every three years. The last GRC was approved in December 2018 for the calendar years 2019 - 2021. Built into that process is an annual review for the second and third year of the GRC.
Rates for 2020 – the second year of our GRC – were approved by the CPUC on December 26, 2019.
What are the new rates?
Quantity rates for residential customers
| Monthly Usage | Rate |
|---|---|
| 0 – 3 CCF | $3.2770 |
| 4 – 18 CCF | $4.9160 |
| Over 18 CCF | $6.5545 |
Service charges
| Meter | Rate |
|---|---|
| For a 3/4-inch meter | $40.47 |
| For a 1-inch meter | $67.44 |
| For a 1 ½-inch Meter | $134.90 |
For more information on how to read your bill, clickhere.
How will my new bill compare to my old one?
2020 Water Rates
Residential Water Rates for a 3/4-inch meter
| Usage | Prior Rate | 2020 Rates | % Change | *Increase |
|---|---|---|---|---|
| 5 CCF | $64.03 | $65.38 | 2.11% | $1.35 |
| 11 CCF | $96.80 | $98.82 | 2.09% | $2.02 |
| 15 CCF | $118.64 | $121.11 | 2.08% | $2.47 |
Please note that the first bills with the new rates are prorated at both the new and old rate, depending on your billing date. *This is an estimate based on usage for the average residential customer.
Why are my rates going up?
Rate increases are the result of a continuing need to invest in the maintenance and replacement of aging infrastructure. Pipes have a life cycle of approximately 100 years. San Jose Water maintains more than 2,400 miles of pipes and replaces approximately 24 miles annually to ensure that the pipes in the ground don’t exceed their 100-year life span. This is one of the primary cost drivers behind rate increases.
In addition, we are replacing two aging reservoirs in the East San Jose foothills with a new prestressed concrete tank. More info can be found at www.sjwater.com/columbine. Rising wholesale water rates, stringent new water quality standards, and an acoustic leak detection program that finds leaks before they surface are all programs that require significant investment to continue providing safe and reliable water service.
In 2020, our capital investment budget totals nearly $120 million to cover these types of improvements. More details about the program can be found here:https://www.sjwater.com/2020-infrastructure-investments
Expiration of Balancing and Memorandum Account Surcharge
The Balancing and Memorandum Account surcharges expire on December 31, 2019. These were twelve-month surcharges that showed up as separate line items labeled “19 GRC Balancing Account” and “19 GRC Memo Account” on your bill.
For customers using 11 CCF of water per month, you will see an approximate decreasein your bill of $4.54 per month as a result of these surcharges expiring.
Bill Example for 11 CCF per Month
| Surcharge | Rate | Total |
|---|---|---|
| 19 GRC Balancing Account | $0.2961 | $3.2571 |
| 19 GRC Memo Account | $0.2933 | $3.2263 |
| Total | $4.54 |
A Refund is Coming
A refund will appear on your bill beginning January 27, 2020. The description will say: 2019 Tax Memorandum Account Refund.
Why am I getting a refund?
We are refunding money that was over-collected due to a change in the federal tax laws.
- The 2018 corporate tax rate was reduced from 35% to 21% by the 2017 Tax Cuts and Jobs Act.
- New water rates reflecting the reduced tax rate, however, were not approved until July 1, 2019.
Over-collection, including accrued interest for the period January 1, 2018 through October 14, 2019, totaled $6,624,690. We are refunding this money to our customers via a one-time credit (based on meter size).
| Meter Size | One-time Surcredit |
|---|---|
5/8 x 3/4 | $20.84 |
3/4 | $20.84 |
1 | $34.73 |
1 - 1/2 | $69.46 |
2 | $111.13 |
3 | $208.37 |
4 | $347.28 |
6 | $694.55 |
8 | $1,111.29 |
10 | $1,597.47 |
Why meter size vs. usage?
This is in accordance with specific rules surrounding refunds per the California Public Utilities Commission (CPUC).
Is the California Public Utilities Commission aware of what’s happening?
Yes. This action is being taken as part of an agreement between the Office of Rate Advocates and San Jose Water during our last General Rate Case per Decision No. (D.) 18-11-025 issued on December 4, 2018.
Per CPUC guidelines, any changes to our rates, including this refund, must begin with the filing of an Advice Letter. We filed Advice Letter 537 on October 18, 2019 and Advice Letter 537A on December 3, 2019.
All filings with the CPUC can be found here: https://www.sjwater.com/filings-cpuc
If you have any questions about 2020 rate changes or your water bill, please email customer.service@sjwater.com or call (408) 279-7900.
