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SoCal Town Organizes Mutiny Against Water Company Over High Rates

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OJAI, Ventura County (CBS 5) – Soon, residents in one of the Bay Area’s poorest communities expect to learn if they’ll see another jump in their utility bills. Last year, CBS 5 first reported on the situation in Bay Point, where water can easily cost two or three times more than what people pay across the rest of Contra Costa County, even though it’s the exact same water. Now, the people of Bay Point aren’t the only ones complaining.

The Ventura County city of Ojai is organizing a mutiny against the very same water company. In fact, the town is covered in yard signs, signaling a small revolution. “They’re everywhere! I have three in my front yard,” says Betsy Clapp, the city’s mayor.

From the sushi place to the pet parlor, and the spa to the fruit fields, folks in Ojai are going with the flow. That’s F-L-O-W, or “friends of locally owned water.” Like frustrated Bay Pointers, Ojaians say they’re getting soaked. “We have a community that’s being charged exorbitant amounts of money for water.” says Mayor Clapp.

Like Bay Point, their complaint is with Golden State Water, the private, for-profit utility that serves part of the Ojai valley, charging significantly higher rates than the publicly owned utility in the same area. Or, as Ojai resident Jack Scranton explains it: “we feel we’re getting screwed, ripped off.”

Also like Bay Point, people in Ojai have begged the California Public Utilities Commission to deny Golden State’s rate hike requests, with little success.

Ryan Blatz, a spokesman for Ojai FLOW says his town has “lost faith in the PUC system so we’re actually asking to opt out of it.” His strategy for change: get the area’s municipal water provider to exercise the right of imminent domain, and buy out Golden State Water. Or, has he explains it: “you can’t change all the rules of the game, but you can pick a new game to play.” In other words, kick the company out of town.

It won’t be cheap. The buy-out could cost as much as $30 million, which would have to be paid for with a voter-approved bond. But Blatz and the FLOW contingent say “the bond amount is miniscule to the savings that we’re going to have in the long projections. In the end, we can pay for the system and be paying less for our water.”

It’s not just Bay Point and Ojai. Golden State is facing customer uprisings across California, in cities like Barstow, Placentia, and Claremont. So how does the company defend its rates?

“The cost to provide the service in our communities reflects the actual cost needed to provide it” says Mitch Zak, a spokesman for Golden State Water. In other words, customer rates cover the true cost of providing water in California.

So what is the real cost of water? True, public utilities use taxes and subsidies to keep their monthly rates low. Some would call those rates “artificially” low. But does that mean private utility customers, who often have to pay those same taxes anyway, should be content paying higher rates for water and infrastructure investments?

Neema Palaniappan is a water expert with the Oakland-based Pacific Institute. In the case of Golden State water, she says “the government regulator as well as the private company [have] both failed to adequately explain these increased rates, to get buy-in, and involvement of customers and consumers in understanding why these rates are higher.” And while there is a philosophical debate over public versus private water, the Golden State spokesman insists “we don’t try to quibble with folks when it comes to philosophy.”

There may be another factor bubbling up with the ratepayer revolt, and that is a new reality for water supplies and costs in California, and beyond. As Palaniappan sees it, “we are beyond the age of cheap, easy to access water.” Mitch Zak, speaking for Golden State water, agreed, adding that “rate increases are a fact of life across the water world.”

Back in Ojai, the FLOW team is expecting a long, hard fight. But Blatz and his supporters are not backing down; “Here, it’s our water. It is a resource that is as important to Ojai as the mountains behind me and the sun that comes down on the ground. We’re going to win this thing and we are going to get this done.”

 

 

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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