General Rate Case FAQs

Our top priority is always the health, safety and reliability of your water service — 24 hours a day, 7 days a week, 365 days a year.

We plan to spend $435 million on water infrastructure over the next 3 years, including replacing 75 miles of water mains. Just one of the many ways we keep your water safe and reliable.

Updated March 9, 2021

Smaller Rate Increase Expected

It’s been a little more than two months since SJW filed its General Rate Case (GRC) application.

A key milestone in the year-long process involves the 45-day update. This update provides the actual impact of our application based on the most current rates effective January 1, 2021. The GRC is a huge document of about 10,000 pages and changes can’t be made in a few days. The 45-day update occurs every time SJW files a GRC.

With the 45-day update, the updated proposed numbers are now lower with the average monthly residential bill with a 3/4-inch meter using 11 Ccf per month increasing by approximately:

$8.92 (or 9.36%) from $95.30 at present rates, to $104.22 in 2022
$3.96 (or 3.80%) to $108.18 in 2023
$4.45 or (4.11%) to $112.63 in 2024

The tables showing service charge and volumetric rates provided with the public notice have also changed accordingly as follows. These are the tables for 5/8, 3/4, and 1-inch meter sizes which account for over 95% of our customers.

Earlier version

Meter Size	2020 (current)	2022 (proposed)	Increase	2023 (proposed)	Increase	2024 (proposed)	Increase
5/8	40.47	56.37	39%	$57.95	2.8%	59.89	3.3%
3/4	40.47	56.37	39%	$57.95	2.8%	59.89	3.3%
1	67.44	93.94	39%	$96.58	2.8%	99.81	3.3%

Updated

Meter Size	2021 (current)	2022 (proposed)	Increase	2023 (proposed)	Increase	2024 (proposed)	Increase
5/8	41.69	53.17	28%	55.66	5%	57.95	4%
3/4	41.69	53.17	28%	55.66	5%	57.95	4%
1	69.48	88.62	28%	92.76	5%	96.58	4%

Earlier version

Residential Customers		Rates Proposed in SJWC's Application
Usage	Present Rates	2022 Rates	Change	2023 Rates	Change	2024 Rates	Change
0 to 3 Ccf	3.28	3.76	14.66%	3.90	3.9%	4.05	3.6%
3 to 6 Ccf	4.92	3.76	-23.58%	3.90	3.9%	4.05	3.6%
7 to 18 Ccf	4.92	4.70	-4.46%	4.88	3.9%	5.06	3.6%
Over 18 Ccf	6.55	7.88	20.27%	8.19	3.9%	8.49	3.6%
All Other Customers
All Usage	4.92	4.70	-4.46%	4.88	3.9%	$5.06	3.6%

Updated

Residential Customers		Rates Proposed in SJWC's Application
Usage	Present Rates	2022 Rates	Change	2023 Rates	Change	2024 Rates	Change
0 to 3 Ccf	3.38	3.79	12.1%	3.91	3.2%	4.08	4.3%
3 to 6 Ccf	5.07	3.79	-25.2%	3.91	3.2%	4.08	4.3%
7 to 18 Ccf	5.07	4.74	-6.5%	4.89	3.2%	5.10	4.3%
Over 18 Ccf	6.76	7.96	17.8%	8.20	3.0%	8.56	4.4%
All Other Customers
All Usage	5.07	4.74	-6.5%	4.89	3.2%	5.10	4.3%

As shown above, the 45-day update impacted the numbers to a great extent — lowering the proposed rate increases. Now, the CPUC will thoroughly consider all of our requests for capital as well as expenses over the course of 2021

Why now?

SJW recognizes that there is never a good time for rate increase proposals. At no time is this more particularly true than during this once-in-a-generation pandemic. SJW has and continues to provide safe and reliable service through the pandemic. We have also weathered natural disasters such as wildfires and floods, as well as PSPS events and brownouts over the last few years. The fact that our water system performed exceptionally well is a testament to your contributions and to the over $1 billion invested in the last 10 years to install new water mains, replace tanks and reservoirs, and retrofit our surface water treatment plant.

These investments are critical to ensuring our ability to deliver on our public health protection mission. Similarly, the investments SJW proposed in its General Rate Case application were carefully considered to allow us to continue to deliver on this mission. The $435M proposed for the next three years includes replacing approximately 72 miles of water mains, installing new wells, and constructing new tanks to replace our earthen embankment reservoirs. The challenges stemming from natural disasters and the pandemic will be with us for some time. Delaying investments in our water system will not only lead to service degradation, but also inevitably result in higher costs and rate impacts in the future. Previous generations invested in the water system for us, and now it’s our turn to invest so future generations can also benefit.

Rate Comparisons

Customers often ask questions involving rate comparisons. Here are comparisons prepared by Valley Water from 2019 and from the City of San Jose in 2020, respectively, showing a bill for typical residential customer using 15 units of water.

Retail Agency Benchmarks Exhibit 7 line graph

City/Water Agency	Current Monthly Bill	Proposed Increase	Proposed Monthly Bill
San Francisco	$134.90	7%	$144.25
Menlo Park	$136.99	N/A	N/A
Palo Alto	$130.70	0%	$130.70
Redwood City	$128.74	0%	$128.74
Milpitas	$108.70	6%	$115.22
San Jose Water Company	$102.21	3.80%	$106.11
Mountain View	$100.38	0.50%	$100.88
Foster City	$97.65	3%	$100.68
City of San José - SJMWS¹	$95.25	0%	$95.29
Sunnyvale	$84.64	0%	$84.64
City of San José - SJMWS²	$84.63	0%	$84.63
Santa Clara	$80.86	4.30%	$84.34
Great Oaks Water Company	$55.03	0%	$55.03

¹ Represents monthly bill for customer in North San José / Alviso service area	$
² Represents monthly bill for Customers in Evergree / Edenvale - Zone 1 area

It’s no coincidence that the highest water bills locally belong to those utilities served by the San Francisco Public Utilities Commission (SFPUC) who recently completed a $4.5 billion capital program to shore up their water supply and infrastructure for the next generation.

Why is Great Oaks Water less expensive?

Customers inquire about why Great Oaks Water Company (Great Oaks) is so much cheaper than SJW’s and the City of San Jose Municipal Water’s (CSJ) rates when all three utilities serve San Jose. A big part of the answer is that Great Oaks enjoys wholesale water rates from Valley Water, at one third of what CSJ and SJW pay. Great Oaks pumps water from the southern basin and the price per acre-foot is $467 vs $1,367 for SJW and CSJ.

To fully understand a rate comparison, a deeper dive is needed. It’s similar to a situation where you stand in front of two identical homes with the same paint color and manicured landscapes and draw conclusions about how well the home has been maintained without ever stepping inside. It’s just not possible at a glance, and there is a need for a deeper understanding of what’s driving the numbers.

Learn more about water rates

To find out more about water rates, Google “water rates rising faster than inflation.” You can also visit the USEPA and ASCE websites to review the trove of high quality information speaking to the challenges facing the water industry. SJW is not immune to these challenges and we are working to address them through our filings with the CPUC. Some interest groups have tried to disparage us for being an investor-owned utility. As demonstrated above, the issue of rising water rates is impacting the entire water utility industry. Our municipal peers are facing the same challenges we face. There are many utilities that have higher rates (or bills) than us and it’s too simplistic as explained above to draw conclusions just from this data point.

Conclusion

SJW has been a part of this community since 1866. We will absolutely continue to support our customers and the communities where we live, work, and serve. From low-income to customer assistance to conservation programs, we will assist our customers and support our communities through this pandemic and beyond. We also remain committed to delivering on our public health mission by investing in our water system to deliver safe and reliable water service.

January 4, 2021

How are rates set?

San Jose Water (SJW) is regulated by the California Public Utilities Commission (CPUC) and serves over one million customers in the San Jose, Campbell, Cupertino, Los Gatos, Monte Sereno and Saratoga communities.

Every three years, we are required by law to file a General Rate Case application to adjust water rates. The proposed rate adjustments must be reviewed and approved by the CPUC, following a robust and transparent process that spans about 12 months.

Customers are encouraged to participate in the ratemaking process by providing feedback to the CPUC at a public hearing — which will be scheduled later this year.

What is a General Rate Case?

On January 4, 2021, we filed a General Rate Case (GRC) application to adjust water rates for the years 2022-2024. The application is requesting a total increase of $87,712,000. If the CPUC approves this application, SJW will recover forecasted costs in rates over a 3-year period beginning on January 1, 2022. We work with the CPUC to file a GRC every three years to ensure:

Investments in the infrastructure needed to deliver reliable water service
Continued commitment to environmental stewardship and sustainability with an effort to further reduce our environmental footprint
Reasonable and fair rates

SJW has been serving customers for more than 150 years. The growth of our system, including more than 2,400 miles of water mains, has mirrored the development of Silicon Valley. As this infrastructure ages, it needs to be replaced and upgraded with new materials and technology. We strive to maximize the useful life of our assets — replacing them as they approach failure. Waiting until they can no longer provide safe and reliable service is simply not an option.

What’s happening with rates in early 2022?

If our rate request is approved by the CPUC, the average monthly residential bill with a 3/4-inch meter using 11 CCF per month would increase by:

$17.33 (or 18.73 %) from $92.54 at present rates, to $109.87 in 2022
$3.55 (or 3.23 %) to $113.42 in 2023
$3.84 or (3.38 %) to $117.25 in 2024.

These rates include current and requested surcharges and fees.

What is a Monthly Service Charge?

Your monthly service charge is applied each billing period to help cover a portion of fixed costs — such as meter reading, water quality testing, water treatment, and maintenance of our distribution system including leak repairs. The service charge is applied to all customers regardless of how much water is used. Having a steadier source of revenue to cover our fixed costs helps to alleviate the more frequent rate changes that have occurred in the past few years.

What is a Quantity Rate Charge?

Unlike your monthly service charge, your quantity charge rate can fluctuate from month to month. This is because it is based on the amount of water a customer uses, and can also be affected by conditions such as drought, rain, or the number of people living at your home. In an effort to encourage water conservation, many water utilities employ tiered rates where rates increase as usage increases.

The below table outlines how proposed quantity charge rates may change in the coming years, per tier of water use.

The average SJW customer uses approximately 11 CCF (one CCF is equal to 748 gallons) per month. The proposed rate changes show a decrease in many monthly quantity charges because more of the fixed costs are proposed for recovery in the service charge.

What are we doing to help customers with their bills during COVID?

No water shutoffs
Extended and flexible payment plans
No collection activity
Water Rates Assistance Program (WRAP) for qualified customers

Where does the SJW rate money go?

Where your dollar goes: 39 cents go to wholesale water purchase from SCVWD, 7 cents goes to taxes and fees, 21 cents go to operating costs, 23 cents go to system improvements and 10 cents go to cost of capital.

Purchasing imported water and paying groundwater extraction fees to Valley Water
Increasing our investment in infrastructure:
- Maintenance and full replacement of 24 miles of pipe annually (1% of total mains)
- Upgrading or replacing storage tanks for earthquake resiliency and improved water quality
- Upgrade or replacement of pumps

Strengthening our water system and readiness to respond to:
- Pandemics - COVID-19
- PG&E PSPS
- Earthquakes
- Broken pipes

Paying taxes and fees on water and services to support the local economy
Covering operating costs, including the #1 cost for electricity

What has SJW done to ensure reliable supply of safe water during the pandemic?

SJW’s mission is to provide safe and reliable drinking water to its customers, while supporting the communities where we live, work and serve. The pandemic has heightened our awareness of the need to protect public health and safety, and to deliver safe, reliable water service. SJW has continued to replace and upgrade water system components such as new water mains, tanks, wells and treatment plants. We have multiple projects in the works to better and more sustainably deliver water and serve our customers.

How affordable is your water?

There are many ways to look at water affordability. In the past, there’s been one widely-used metric: median household income. However, this only considers one data point.

Real life is more complicated than that. For customers who may have the greatest challenges paying their water bills, it helps to have a more thorough look at affordability.

Recently, the California Public Utilities Commission (CPUC) published its 2019 Annual Affordability Report. This comprehensive report looks at three different ways of measuring affordability:

Hours at Minimum Wage (HM) – Describes essential service bills in terms of worked hours at minimum wage required to pay for them. It provides a clear illustration of the impact of utility costs on the daily lives of low-wage ratepayers compared to the dollar amount alone.
Socioeconomic Vulnerability Index (SEVI) – Describes the relative socioeconomic characteristics of communities—in terms of poverty, unemployment, educational attainment, linguistic isolation, and percent of income spent on housing—to quantify how the same utility cost may affect one community’s ability to pay vs. another.
Affordability Ratio (AR) – Describes the impact an essential service bill has on a representative household’s budget; that is, the percent of income spent on each type of essential utility service after housing and remaining essential utility services are considered. This metric can be calculated for households at any point on the income distribution for a given area.

The 2019 Annual Affordability Report explores water utilities starting on page 52. SJW’s service area is considered within the “affordable” section using the three metrics listed above. However, we realize that customers have different financial situations. Any utility bill that has a large impact can be a burden. SJW offers a Water Rate Assistance Program (WRAP) for customers needing financial help.

While this report is a good dive into an important topic, there’s still more work to be done. The CPUC will be utilizing this information as it makes rules and sets rates.

https://www.cpuc.ca.gov/2019-Annual-Affordability-Report/

Are the rates based on the number in each household?

Rates are based on the size of the water meter that serves a home or business, more commonly known as the service charge. Additional charges are levied for the amount of water consumed or volume charges. All rates are approved by the CPUC and can be found on our website under billing schedules.

How can I reduce water consumption?

SJW has maintained a long tradition of promoting conservation. To help educate our customers about water conservation, we offer complimentary water check-ups, educational materials, and free low-flow devices. Please visit our conservation section for more information.

How do I learn more about rate increases?

Please visit the rates section of SJW’s website.

What is your relationship with Valley Water?

Valley Water is the County’s water supply agency. SJW purchases water from Valley Water and delivers that water to homes and businesses. If SJW customers encounter any issues — for instance downed trees near waterways or an illegal encampment on water district property — they should contact Valley Water.

What is a surcharge?

A surcharge is a tool a water company can use to fund specific capital projects or unusual expenses, to provide water quality, or a means to pass-through Valley Water’s mid-year increase. A surcharge has a specific use and is temporary in nature. The surcharge is removed from your bill when the project or amount is paid in full. All surcharges must be approved by the CPUC.

How can I submit a comment?

Customers are encouraged to participate in the ratemaking process by providing feedback to the CPUC at a public hearing — which will be scheduled later this year. Check back on this page for updates.

Is there assistance for low income customers?

SJW’s Water Rate Assistance Program (WRAP) provides a 15% discount on the total water bill for eligible low-income customers.

What number do I call if I still have questions?

You can call our dedicated 24-Hr Customer Service Advocates at (408) 279-7900 or email customer.service@sjwater.com.