State directs Hillview to increase loan surcharge

Oakhurst residents and businesses served by Hillview Water Co. can expect an increase in the State Revolving Fund (SRF) surcharge portion of their water bill, along with a surcharge refund, likely before spring.

The company has been directed by the California Public Utilities Commission (CPUC) Division of Water Audits to simultaneously file for the SRF surcharge increase and refund.

“Hillview is being required by the CPUC, to both refund already collected SRF surcharge payment reserve funds, and simultaneously raise the monthly SRF surcharge rate,” explained Hillview Manager James Foster. “Personally, if I were setting aside money to make a loan payment and I ended up saving more money than I need to make the payment, I would pay it toward to loan balance, not refund myself. This would either lower my future payments or shorten the loan term. But that is not how the PUC operates.”

Foster said since it is an interest free loan, all the money collected only goes to pay off the loan, but CPUC rules require excess payment reserve money to be refunded to the customer rather than just applied to the loan.

“Unfortunately this is how it works, without regard to whether it will cause the loan payment to go up or not,” Foster said. “It is definitely a bureaucratic conundrum.”

The surcharge increase is necessary to ensure appropriate loan funding payments to the Department of Water Resources for a $3.8 million loan Hillview received in 2007, to improve service to its customers.

“It’s important to understand that, as required by the California Public Utilities Commission, we will also be giving refunds which could amount to more than $80 for each three-quarter inch metered customer here since 2007.”

Hillview used the loan funds to drill five new wells which produce more than 500 gallons per minute, and added 18,000 feet of water line to get the water to Oakhurst.

“These improvements are likely why there have not been any water shortages so far in Oakhurst because of the drought.” Foster noted.

This temporary increase will only affect Hillview’s Oakhurst/Sierra Lakes customers and not customers in Goldside, Coarsegold, or Raymond. The Oakhurst/Sierra Lakes area is generally located in Sierra Lakes, Hidden Oaks, Oakhurst proper, Vista Heights, the Redbud Drive and Pierce Lakes areas, serving about 900 residential and 140 commercial customers.

The increase in the surcharge request is 96 cents a month (from $7.56 to $8.52 ) for residential homes with a three-quarter inch meter and $9.60 per month ($75.60 to $85.20) for customers with a three-inch meter. About 90% of the customers in the area have a three-quarter inch meter. When in effect, the increased surcharge is expected to provide Hillview with about $1,200 monthly, and 100% of all surcharge funds collected will go directly to pay off the loan balance.

Hillview notified its customers of the increase request through a letter sent earlier this week. Those who wish to support or protest the filing for the increase, must do so in writing by Feb. 16. A protest must have specific grounds on which it is based, and must provide citations or proof to allow CPUC staff to properly consider the protest. Grounds for protest include information that the utility did not properly serve or give notice of the filing, or that the filing increase is unjust, unreasonable, or discriminatory.

Letters should be mailed to both the Tariff Unit, Division of Water Audits, 3rd Floor, California Public Utilities Commission, 505 Van Ness Avenue, San Francisco, Calif. 94102, with a copy mailed to James F. Foster, Manager, Hillview Water Company, Inc., P.O. Box 2269, Oakhurst, Calif., 93644.

Details: Hillview Water Co., (559) 683-4322.