San Jose Water works very hard to keep our rates affordable. The rates are set by the California Public Utilities Commission whose mission is to balance just and reasonable rates with safe and reliable infrastructure. Rising water rates is an issue not unique to San Jose Water but really the water utility industry. The key drivers for water rates are the need for infrastructure investments, rising water supply costs, and increasingly stringent water quality requirements.
Unfortunately, these challenges will be with us for the foreseeable future. I include below some links to our utility peers who are facing the same issues as well as how our nation’s water infrastructure is in dire need of increased investments to ensure it can safely and reliably deliver service. At no time has the provision of safe and reliable water service is more important than during this pandemic.
The comparison of one utility’s rates to another is simplistic although not all that meaningful. It’s similar to a situation where you stand in front of two identical homes and draw conclusions about their condition without ever stepping inside and looking how well they have been maintained or what improvements have been made. To fully understand why rates differ from utility to utility, even those next door to one another, requires a deeper dive.
Using the constituent’s example, one main difference is that the cost of Great Oaks Water’s supply is roughly one third that of San Jose Water’s because they have a different supply source through Valley Water. Valley Water, formerly the Santa Clara Valley Water District, sells water to organizations like SJW and Great Oaks as well as other cities. Those organizations then deliver the water to homes and businesses. The latter is the retailer and the former the wholesaler. SJW purchases groundwater from Zone W-2 at $1,374 per acre-foot of water (roughly 326,000 gallons). Great Oaks’ supply comes from Zone W-5 at $467 per acre-foot. The link to VW’s rates is https://www.valleywater.org/your-water/current-water-charges. Further, San Jose Water has invested more than $1 billion dollars in the last 10 years to ensure our system can continue to deliver a high level of service. I don’t know what Great Oaks’ investment total has been in the last 10 years, and given that the system is less than 10% of our size, I would not expect them to have the same infrastructure needs.
For industry insiders, we understand why customers compare rates of neighboring utilities and also cringe a bit because they are for the most part not meaningful and can work to pit one utility against another. At the risk of exacerbating the situation, I include a bill comparison recently published by the San Jose’s Municipal Water System for their rate setting process. The one thing all the top 5 organizations share is that their water supply comes from the San Francisco Public Utilities Commission which has the highest supply costs due to the staggering amount of infrastructure investments they are making (https://www.sfwater.org/index.aspx?page=114). In no way am I calling out any one of these organizations and am merely pointing out how difficult it is to compare rates without full context.
I appreciate the constituent’s concern about water rates. SJW offers a number of programs to help customers manage their usage and ultimately their bills. One of the most popular is our CATCH (home check-up) program (https://www.sjwater.com/catch). I would encourage customers to schedule an appointment with one of our service inspectors who can help them use water more efficiently and identify if leaks are present. Leaks often go undetected and can drive up the water bill.
We also offer a Water Rate Assistance Program which provides a 15% discount on the bill if customers qualify. More information is available at https://www.sjwater.com/customer-care/help-information/water-rate-assistance-program.
Why are SJW water rates so much higher than Great Oaks or other water companies?