CPUC Workshop - 2021-02-04
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California Public Utilities Commission
Follow its sittingsSpeaker 3
They're similar to the care programs that the energy customers have. Looking very quickly, the average residential arrearage is up about 55% compared to the same period 19. It used to be about a $135 on average among those who were behind on their bills. Now it's 208. We could discuss the subtlety of that, but basically, among the people who are behind, $208 is probably a lot of money.
The average nonresidential arrearage is up, but not up by quite as much. It the before last year in September to November, it was about $6.40, and now it's up to about $7.17. One last graph here. Residential arrearages are now totaling about $43,000,000 and nonresidential about $19,000,000. So we're talking over $60,000,000 that is owed by customers and on the utilities books at this time.
That's all that we need to do right now, and I will stop sharing. Okay. So so one of the questions that we have been asked to address right from the beginning is what kinds of things does the water division do in order to try to help low income disadvantaged communities or ESJ in general? And I would like to begin by saying the water division regulates about 90 utility companies, most of which are small and many of which serve in ESJ communities. Our work is to regulate them.
We don't actually serve the water, of course. But we make sure that the utilities provide adequate service, and we work with other agencies to make sure that the water quality standards are met. We also have procedures for dealing with the utilities that are failing to meet the requirements that are necessary. Environmental and social justice is promoted and benefited by CPUC regulation in general. The CPUC sets rates according to costs, and costs are reviewed for reasonableness and prudence.
It wouldn't we have a universal service policy, and it's unlikely that everyone would even be able to get water were it not for universal service rules that we help to enforce. Rates are set across whole service areas, and they are not segregated by area or in terms or conditions of where they are served. So people who are in town and people who are in the woods, if they are in the same service territory, they are paying the same rates. Though one could argue that the people who are out in the less developed areas or the less congested areas perhaps are more costly to serve. And if we weren't dealing with regulation, perhaps would not be receiving service or would be receiving service at a different cost.
The class a water utilities have low income programs. We do not have those at this time for this very small water companies, the ones with fewer than 500 customers. We do some other things that help to facilitate ESJ and that includes facilitating acquisitions and consolidations that may benefit the customers of small and undercapitalized water utilities. And we're participating in two proceedings that are ESJ related. And I'm speaking now about the one called the low income water utility low income water proceeding r 17O6024.
And that's the one that is enforcing such rules as the the shutdown moratorium, and we're working on other policies that the commission may be developing in future orders. And here we go. So, I mean, that's the that's the story of the kind of stuff that we are doing generally. And, of course, we're always looking to find if there are better ways that we can serve all the communities and the especially the environmental and social justice communities.
Speaker 1
Thanks, Steve. One last thing I would mention in the context of framing this discussion that we're about to have is something that has been mentioned a couple of times in the last over the course of this workshop, the affordability proceedings are eighteen-seven-six, where last year the commission in decision twenty-seven-thirty two adopted a set of three metrics to measure affordability across all of its regulated industries, including water. And a staff report on affordability is due for release later this quarter. I mentioned it today so that later on we can continue discussing how it can best be applied to ESJ communities. Some of these metrics that the commission has adopted look at things like calEnviroScreen, rates, income levels, but the framework of how best to apply those metrics is still underway in the preceding second phase.
So some of the kind of preliminary results that we're seeing is what you might expect. Some of these smaller communities that Steve has mentioned, are kind of doubly burdened by both some of the highest water bills in the state, as well as some of the lowest incomes, combined with the lack of assistance programs like the Class A's have, affordability kind of affects customers from several different angles. So we are trying to measure it the same way. And so I think that is where we will leave off in the context of kind of framing the water division's role and water at the CPUC in the context of ESJ. And I think we'll open it up for for discussion.
Steve, do you wanna introduce this first question that we have?
Speaker 3
Well, sure. Am I I'm not muted. Okay. It it what does it mean that California has legislated a human right to water? I actually have that, that law as it was written, available for us to look at.
It is here. Okay. And essentially, the very beginning, it is declared to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. And the rest of this goes into what that is and what it means. Our question is what does it mean to the CPUC and how can we make sure that all people have access to safe, clean, and affordable water?
Speaker 2
Jeff and Steve, actually, maybe you, could call on folks. Some folks have their answers. Just call on them and then folks can unbeat themselves, actually. So sorry about that. Yeah.
Speaker 3
Okay. Now at at this point, one of the things I would really like to know is how do I put the people in order that they have their hands raised. Oh, I see. So Edward Simon here. Edward, could you speak?
And you have to un, unmute yourself.
Speaker 4
Okay. Well, good afternoon. I'm Edward Simon. I'm the director of business performance and supplier diversity for California American Water and just recently named the chair of the California Water Association diversity equity and inclusion advisory board. Certainly great to be with the team here this afternoon.
And my question is I understand that the commission is engaging in some workforce development programs and I think you formed an agreement with the state workforce investment board. Can you share a little bit more information about that partnership and how maybe CWA can engage in these discussions? Certainly to attract interest in people working diverse people working in the water industry. Can you share a little bit more about that?
Speaker 2
Sure. This is Monica, Jeff, and Steve. I'll I'll take this one real quick, and, we should talk more offline. It would be really, really helpful. But just briefly, yes.
So of the goals of this action plan is to think about how we, as the PUC, can promote opportunities for workforce development, you know, within our wherewithal, within our jurisdiction. So we obviously don't have a lot of expertise on that. So we entered into an MOU yet with the California Workforce Development Board to help us understand how we can use our jurisdiction and authority to promote opportunities. What we've been doing we've just been getting started, so now is a good time to to discuss. What we're doing right now is looking at three programs, three program areas, energy efficiency, vegetation management, and transportation electrification, three of what three program areas that have some workforce development components, understanding what we've done thus far from the PUC side, and think so kind of develop some best practices that we have already done can share cross commission, but then also think about how we can maximize our impact in that space.
And we've been learning a lot through our partnership with the the workforce development board about, you know, it's not just about training. It's about job placement, job quality, things like contractor standards. Those are the kinds of things we will be exploring as we further implement the MOU. So, yeah, happy to talk more offline and engage on that, but that's generally where we are with that item. Okay.
Well, thank you
Speaker 4
very much. I would tell you, I know from a CWA perspective, we certainly would be interested in engaging in those discussions. And I know you focused on the you said the energy and vegetation management and so forth. But would be nice to add if we can working for a water utility in that focus area as well, because we certainly can use some assistance there. So I will definitely follow-up with you after this.
Thank you. Thanks.
Speaker 3
Thank you very much, Edward. At this time, we do not have any hands raised. I guess that means that maybe Jefferson should talk about our next question and see if we get some more excitement out of that one.
Speaker 1
Sure. The the next thing as I kind of hinted at a minute ago, is this affordability rulemaking entering its second phase in which, know, now we have these metrics, we are collecting a lot of data related to affordability. How do we use that to kind of best impact ESJ communities? And I know, a lot of these proceeding itself has kind of garnered a lot of these discussions that will continue through the second phase. But in the context of ESJ, I think there's kind of a different angle we can look at.
Are there any thoughts on that topic?
Speaker 5
Hey, Steve. This is Willis Hahn. I'm an attorney with Nossman on behalf of CWA. And I I did wanna also tie this back to your first question about the human right to water, and and also just to fill the affordability metrics in the recent proceeding. And I I I wanted to tie it back through the, stuff you opened up with on the consolidation of the small water systems.
I know that the current ESA, ESJ action plan does mention the consolidation of water systems. But since that time, you know, there's been a lot of activity in this area, not just not just the acquisition of other utility systems, water systems, but also, you know, unregulate not not unregulated, but municipal systems as well throughout California, especially the Central Valley. So I, you know, I I guess the one thought I had is what sort of steps can the commission take as part of this ESJ action plan to further the area of consolidations? Because in addition to the commission, you know, you also have the state water board doing work in this area. They have mandatory consolidation program.
And in in many instances, it's it's a lot of voluntary consolidations as well. So I think one thing that CWA would like to see in the ESG action plan is to expand on this area. How can we remove some of the barriers, to seeing these consultations go through? Because a lot of the time, you know, not only do the not only do the dollars need to work out for it to make sense financially, but there's also other regulatory barriers or just process, you know, the process just takes a long time. So I think what focus of CWA is to sort of streamline the consolidation process in in a way that, you know, can reach out to these communities that are underserved, especially, in in Los Angeles and in Central Valley to to make these consolidations happen, not only for affordability program, but for, you know, water quality as well.
And so that that's just something I wanted to post to all of you.
Speaker 3
Okay. Well, let me let me begin, by by saying we we would be delighted to engage in a dialogue or see, hear what are the barriers from the point of view of an acquiring utility or from a utility system that wishes to be acquired. I'm I'm sure that we don't appreciate how how many barriers there are and how many hoops proverbial hoops or metaphorical hoops the parties must get involved in. The CPUC is mostly interested in costs and prices and who is going to bear the burden of paying in in the process of of a consolidation. And we are very careful to be sure that every consolidation that occurs or every acquisition that occurs is just unreasonable.
But beyond that, we would like to know if there are barriers that we're not aware of or that we could somehow help to alleviate in order to make this process go better, go faster, and happen at less cost. And and we certainly do try to have very good relationship with the state water resources control board and work with them on acquisitions as well. I I don't know if there are other people who wish to to speak on this topic, but this is this is an area where people who are not in a good position to help themselves can be helped by the CPUC.
Speaker 5
Yeah. Just really quickly on that point, you know, we appreciate that, you know, the commission has recently taken action in the WaterLeara proceeding to, you know, adopt a set of minimum data requirements for these acquisitions in an attempt to make the proceedings more streamlined and go faster. But I think, you know, it it those were just adopted last August, so it remains to be seen whether or not those have have any effect in these sort of proceedings. And so we we just wanna keep the dialogue open and think about other ways that we can have the commission proceedings for authorization to get acquisitions through, if there's anything we can do on that front.
Speaker 1
So I see I see one hand raised in the chat, and I also saw, Lauren James, a hand raised a couple minutes ago. Lauren, if you'd like to, to speak first and then, the hand in the chat.
Speaker 6
Alright. Thank you very much. Lauren James with Suburban Water Systems. I am the manager of communications and supplier diversity. Wasn't in relation to what Willis was speaking about, which is great.
Another great topic. Have kind of an inward looking question to kind of pose to the CPUC. And I know an important part of the ESG strategy is to ensure that the PUC regulators, the end staff at the PUC reflect the communities served by the utilities. And I'm just curious, how is the commission working to diversify their own workforce? I think that would be a key element in these discussions.
So, when we're talking about, you know, low income and communities and social justice, how many people are on this call from those communities that can shape this conversation and take us to the next level of actually getting something something done, something equitable, something that we can roll out together. So I was just curious about how the commission is, diversifying their own workforce right now.
Speaker 2
Yeah. Because that kind of applies to some of our other goals. So yeah. So the you know, this environmental and social justice action plan is just one way that we're trying to think about diversity, equity, inclusion more broadly. So beyond this initiative, there are other initiatives at the PUC to get at exactly what you're mentioning.
What sort of two different efforts that I will just name there's more, but two main ones. One is sort of inward looking at ourselves as a commission and our staff is our we have a diversity, equity, inclusion new task force that is really taking a lot of those hiring practices into account and other other measures of inclusion into account, looking very much inward with us as staff. We also are engaging in a in a effort called CCORE, and it's capital collaborative on racial equity. It's a we have a cohort of staff that are engaging in a year long racial equity training. I am not personally part of the cohort, but I did participate in this cohort two years ago in a previous job.
So I'm familiar with the curriculum at least a little bit. And they will be building a racial equity plan for us as a commission. So there's a lot of folk it's a cross commission group, much like our ESJ liaisons focusing on environmental justice. This group is working on on racial equity, and we are, you know, we are trying to kind of sync our Venn diagram, you know, our Venn diagram in terms of how we overlap on some of these issues. We wanna be coordinated, but we don't wanna say that this effort is necessarily speaking to racial equity or diversity in our staff.
Those efforts are definitely doing that more closely, and we absolutely are looking to support those efforts. But those are two examples.
Speaker 6
That's great. Great to hear. And I would love to, you know, follow-up with us outside of this and to kind of hear about your progress and what we're doing to enhance this conversation as well. So that's great. Thank you.
Speaker 7
Good afternoon, everyone. My name is Jeanette Diaz. I'm the manager of supplier diversity and special projects at San Gabriel Valley Water. I'm also the current chair of the CWA USDP committee. So our supplier diversity programs are successful at ensuring the regulated water utilities are spending on goods and services, from diverse owned businesses.
So just a thought, what can we do on a commission level or utility level to ensure that these businesses we're supporting are in turn supporting members of the ESJ communities?
Speaker 3
I have to say I do not I've I've not followed that, that question before. Is that something that you can, respond to Monica?
Speaker 2
Sure. Yeah. I'm not a water person, but I I'm I'm happy to say it. Unfortunately, we don't have I mean, I'm sure you all know Stephanie Green who manages our supplier diversity program. So, unfortunately, I don't I don't think we have her on the line, in our in my news and outreach my news and outreach colleagues.
So, yes. But I I think that's an important question that we should take to the supplier diversity team, and perhaps there could even be a follow-up, more deliberately about that. Kind of similar to the workforce, you know, we're kind of scratching the surface on some of this, but there are likely tangible action items we can take. I I just have to be honest, I'm not clear right now on what that might be. Yeah.
Speaker 7
And it's just yeah. To throw that out there and Yeah. Together on that, you know, and follow-up. So and it was my my comment and thought to throw out.
Speaker 2
Yeah. And we can incorporate something like that into the plan, you know, even just, like, putting that on our to do list of, like, we need to explore this. That that works too. So, thank you.
Speaker 1
Yeah. That that's a great point. Are there any any comments on that topic, from elsewhere in the elsewhere in the chat elsewhere in the the call?
Speaker 8
I can. I have West Owens with California American Water. And I, unfortunately, can't figure out how to raise my hands, which is which is my fault. I know Monica explained it on the morning sessions multiple times. So, of course, when I need to do it, I I can't figure it out.
So sorry about that. So I figured I'd just just just jump into the conversation, if that's alright with you. And I know we're kinda, like, maybe jumping back and forth, but I was gonna jump back again to the the human rights of water discussion. And then, Steve, I think you teed up the question, and then we kinda, like, went down a different path. But I'll just maybe I just wanna let you know I wanted to talk about that, but I can wait and see if there's any more response to kinda what okay.
I think and it's it's kind of you know, I know we've we've kind of beat on it in different proceedings and in different routes. When I say me we, I mean, it's the water industry. Right? And it is this notion that Willis talked about of kind of streamlining these consolidation applications. And and I understand, like, I'm gonna try to keep in the the context of ESJ here and because not every consolidation is of an ESJ community, but a lot of them are because that's a lot of the like you know Steve, it's a lot of the smaller utilities who have know, are in potentially lower income communities or disadvantaged communities and have water quality issues in a lot of businesses.
I know that we at CalAm have taken on or acquired several smaller utilities that have had water quality issues. I mean, one one good example that kinda hit a lot of these checks a lot of these boxes, Steve, is our acquisition of the Donegan system. So it's a small community about two fifty connections, a mobile home community right in the middle of the valley about I don't know half an hour north of Sacramento, single well and had Chromium six issues, right? And Chromium six issues that were exceeding the MCL that was in effect. It's not now, but we all think it ultimately will be again.
And after CalAm acquired the system, we were able to install treatment there on their single well. So if we hadn't if if treatment hadn't been installed, it would have, you know, been a dire situation for them. And instead of having x $100,000 treatment being paid for by two fifty customers, we were able to spread it over our Sacramento district. So it's being covered by 60,000 customers, right? So instead of costing like $40 a month, it costs like $0.15 a month per customer.
So I think that really hits the especially on this Goal three, I'm looking at the ESG plan right now striving to improve access to high quality water, right? And but unfortunately, what we're kind of seeing is sometimes these acquisition applications that are supposed to take around two sixty days and take years. And I don't think I think Donegan wasn't years necessarily, but we've had other ones since then that have taken multiple years. So like Willa said in the LIRA Phase one rulemaking, there was a decision that, you know, I think attempted to try to streamline it, but maybe we even if we're just specific to disadvantaged communities, like ways of, like, trying to check certain boxes so that we can expedite acquisitions of these kind of disadvantaged communities more quickly. And the other thing and maybe this is just me kinda being a little bit new to this arena is a little more definition on what makes a disadvantaged community.
So, like, after hearing about EnviroScreen tool yesterday and then this morning again, I I pulled it up myself and, like, for example, I pulled up done again, and it was in, like, the yellow zone, which was, like, fifth 50 to 60%. But and this is just ten minutes spent trying to understand it. Like, I was like, so is that it seems like that's bad, but not as bad as some of the other places. So maybe just some help from and I pulled up the commission website about disadvantaged communities and and read there, but maybe some more help from water division or or other groups within the PUC trying to understand what what makes it you know, what is the definition of disadvantaged community, which I think was a big part of conversation yesterday around definitions, right? So maybe a little more clarity around that for us, water companies who aren't, I don't think as involved as maybe some of the energy companies are in this field.
Maybe So that's just speaking for me. I know Ed is a lot more knowledgeable in this area than I am, but I think that input coming from the CPC and maybe even the water division would be helpful.
Speaker 3
Okay. Well, thank you for that, Wes. Certainly, yesterday morning was when we worked very hard on the definitions. And as you saw, there's multiple definitions and different definitions that are in legislation that we that we must follow, etcetera. But we are and and so we're not gonna go through that again today.
But we are interested in the water division in facilitating facilitating acquisitions to the extent to the extent that we're able to do so. And so that's now on the list, and we will definitely be having further discussion of that in the future. And I thank I thank you for that comment. As for whether or not maybe on average, would get tougher on acquisitions in the places where they do not involve facilitating greater environmental and societal justice, I don't think so. I think we're going to try to make sure that our processes work for everybody, but certainly in the ESJ communities, yes.
Speaker 8
I did not say that, Steve. Don't get tougher. I didn't think it's tougher anyway.
Speaker 3
Yes, we have another hand up but I don't know, it's Jacob SE I believe, who is that?
Speaker 9
Hi, Steve. It's Evan Jacobs here from California American Water and I'm also Okay. The current board president of the California Water Association. And I actually had a little bit of a follow-up question to Wes' just in terms of the different screens that are using being used. And the one that I am the most familiar with and use in the context of the state water board is the Department of Water Resources runs its own screen for water.
And it's not something you all have to answer now, but I would just be interested in knowing if the commission has preference or thoughts on the relative advantages and disadvantages of the DWR screen versus Kalinvirus screen, which I think looks at more different non related factors.
Speaker 3
Yes. I'm I'm unable to provide you with with CPUC's opinion about that. And and and, honestly, I do not know the answer.
Speaker 2
Jeff, do you have any thoughts on are you familiar with that water, waterboard screen?
Speaker 1
I'm not familiar with the DWR screen. I know, West, to your question, that the the disadvantaged community definition, and CalEnviroScreen is based on the top 25% of CalEnviroScreen scores. So taking into account kind of both pollutants and socioeconomic factors, but that's how that one is defined just briefly. So I think maybe one thing I would like to bring up in consolidation has mentioned been mentioned a couple of times. And one thing that I think is worth talking about in context is maybe this tension between acquisition of a water system in an ESG community obviously has benefits such as safer, more reliable service.
There's obviously a tension between that and then the additional costs, which run the risk of burdening ESJ communities further. Does anyone else have thoughts about how those two things interact, especially for existing rate payers who may not be not necessarily of the acquired system? I know that's something Water Division is thinking about a lot during these acquisitions.
Speaker 8
And sorry, I don't want to bogart the conversation here, but is it the burden I guess there's two groups to look at, right? The burden is on, you say existing customers, but both utilities have existing customers, right? So is it like the existing customers for the acquiring utility or the existing customers for the acquired utilities, right? And I think the PUC looks at both of those. I guess in the realm of this, mean, of what we see a lot is it's kind of easier to look at current rates of the acquired utilities because they're usually lower because they're usually not investing as much in their systems.
And and again, you know, keep beating on this drum. But when we're able to acquire and we make necessary investments, we could spread those over a larger customer base. So I think the commission needs to look at it from that perspective as well, not just like, all right, their rates are low right now, like and if they get acquired and let's say they even get acquired by a nearby contiguous utility that has higher rates, well, and let's say, we assume that they're going to conform those rates somehow, maybe not immediately, but sometime in the future than that means their rates will be higher. But you also need to look at it from the perspective of, okay, if they they also might have future capital spending needs that they've been deferring that if they ultimately need to do that, which they will at some point, one way or the other, then those acquired companies rates would go up probably above even the I mean, likely above even the post acquisition rate. So I think it's kind of like it's multifaceted, right?
It's not just looking at it's not a snapshot in time of here's what their rates are now. Here's what the acquired company's rates are now. There's a lot of different moving moving parts. You know?
Speaker 3
You are absolutely right. There's a lot there's a lot of issues involved, including that the people in the acquired community are being probably, are being underserved, underinvested, and their rates are too low. And the local water utility has been either un un willing to apply at the CPUC or unwilling to go through the prop two eighteen process of raising rates. This these are serious problems, and society's preferences are not always clear as to what people want to do. A lot of people would like to be left alone.
And even if I don't have the best water in the world, well, leave me alone. This is a problem. And, you know, and other people will say just the opposite. I I've chosen to live here. Why can't I get good service like they get in town?
These are issues that have to be adjudicated in every single case. I wonder if we should go on to another another topic, or do we have any other hands up still? Jacob, one more here.
Speaker 9
Yes. Oh, no worries. One of the things that I think Manny Theodoro talked about at the commission proceeding a couple years ago was the concept of affordability at both the individual level and the community level. And one of the things I think the PUC and the PUC regulated water utilities have really shown a lot of leadership in is providing affordability protection at the individual level, primarily through customer assistance programs. And certainly with the affordability and LIRA program, we're looking at expanding and improving upon what already exists.
But one of the things that I was very proud of and it may be something to think about in future acquisition proceedings, particularly for those of disadvantaged communities is California American Water acquired three systems in 2019 and 2020 in disadvantaged communities. The Fruitridge system in the Sacramento region, the Hillview water systems in Madeira County, and the Rio Plaza system in Ventura County, all of which were serving disadvantaged communities. And generally, we are not able to extend all of our customer assistance or conservation programs to newly acquired systems until after it has been considered through a full rate case process. And this year with the encouragement of the water division and the commissioners, we actually filed for and were approved to extend our customer assistance program, our ratepayer assistance program into each of those communities in 2020 during the height of, well, I guess it was the previous height of the COVID crisis. It seems like we're still in the middle of the COVID crisis.
But I think that was a real success and it was a, you know, step forward bringing 7,000 customers, many of whom really needed at some relief on their water bills by extending that assistance. So I think that's one thing we can look at in the future is how quickly we're able to extend those programs to newly acquired systems, particularly when circumstances are dire.
Speaker 10
Hey, Steve. It's, it's John Tang with San Jose Water Company. I I, I hope I can make a state, a comment. Is that alright? Hello?
Speaker 10
Okay. Thank you. I I took note of your comment and and and the conversation between Wes and and others about, you know, about consolidation. And I think
Speaker 10
public from the industrial utility, from the regulated utility perspective, we wanna be part of the solution if if it makes sense for the utility being acquired and it makes sense for for our customers as well. I think your comments brought to mind a situation in general. I think when these consolidations occur, not always, but I think in general, there's a flavor of, you know, underinvestments, as you said, a degradation of service, water quality issues. You know, there are multiple stories of communities where they don't have a safe and reliable water. They cannot drink from the tap.
And and, you know, the papers have a field day with that in terms of saying, how can this happen in the fifth largest economy in the world here in California? And and we know internally, we know how how how it can happen. Right? Lack of, lack of rate base, lack of critical math, lack of courage, maybe as you mentioned, to go through the Prop two eighteen, process, to to be able to make those adequate, investments. And so I think I when when when I hear that, you know, some of these utilities don't wanna be approached or, you know, don't wanna have anything changed, I'm I'm just wondering, like, how can they how can they have that kind of position when, you know, safe and added, safe and and reliable water service is is kind of one of the underpinnings of, you know, of our society, so to speak?
So just curious as to your comments on that.
Speaker 3
Well well, I don't have a lot more to say about it. I can I can relate to you the folklore that has come to me, and I was not in California in the nineteen twenties and nineteen thirties, and I wasn't even alive then? But part of the story that that we hear is that some of the some of the reasons that such small utilities exist is that when someone was developing a new town, the developer would go to the local agency that might be interested in supplying water, a state agency or a local town, a municipality, and say, won't you hook up our new area? We're going to be building 5,000, 10,000 homes. It's, you know, a few feet that way.
And the answer would be, gosh. That looks like a lot of investment. I'm not sure we really wanna do that. We might have to raise rates to our existing customers who are very happy with us now. And then the developer would have to develop a water system on its own as well as build the houses and infrastructure of the rest of the community.
That it it that's an indication that this is not a new problem. This is a problem that has been in existence for a long time. And it is only through the action of utilities such as the class a water utilities here to be willing to take over such systems and rebuild them to modern standards that these towns can be saved from going down into this process that you mentioned of degradation, underinvestment, rates that are too low that don't serve, and unfortunately, being undersized compared to modern organizations that have to be larger. But this is what we're trying to do is go forward from here and not, go go backwards and say, how did we get into this difficult situation in the first place? I I wonder if we could go into questions about COVID and COVID relief, and how will the water systems of California be able to deal with the fact that there are many people who are not able to pay their bills who aren't paying their bills, and that at some point, we're going to have to dig out of that problem.
And there are zero raised hands.
Speaker 4
Hi, Steve. And I know Wes and Evan can jump in here as well. I know and you probably know this, California American Water, we are not shutting off customers during this particular time. So you're right for those that are not paying something toward the bill, there will be at some point a need for us to reconcile those lack of payments. But I know we would offer several payment options and terms.
We certainly work with customers and will in this particular situation. But you're right, they're going to have to come to some point to say, you know what, I need to start paying something on this bill as I continue to utilize the service. But I know a lot of the other utilities are not shutting off and disconnecting service at this time as well. But we'd love to hear what other folks maybe are thinking or maybe doing with regards to that.
Speaker 3
Thank you, Edward. And my understanding is that utilities are not cutting off service. So utilities in general are not cutting off service due to nonpayment at this time. Of course, there still may be customer shutoffs if there's a leak or if there's, you know, some other need to turn off the turn off the water. But customers are, I'm sure, thinking about this and also the companies, And not just companies, but also state agencies and municipalities are suffering from the fact that they have large accounts receivables or larger than they used to be and will, at some point, have a greater capital costs in order to in order to keep those floating.
Willis, I see you have your hand up.
Speaker 5
Yeah. I just I just wanted to say something quickly about the, you know, this this point when we'll have to reconcile everything. And one point that we've had on our mind at CWA is that, you know, with with the water utility sector specifically, we're kind of in a unique position separate from the energy energy and telecom because not only do we have these emergency customer trip protections by the CPUC, but there's also, executive order from the governor that prohibits shutoffs. And so, you know, we're we're dealing with these kinda competing directives, and they don't always line up because of the right now, you know, there's the draft resolution m four eight point four eight four nine that would send the protections through the June. Whereas the executive order, there's no end date on it.
It's there until it's lifted, and we're unclear when that will be. So I'd yeah. Don't want I can't answer your end question directly, but I just wanted to point out that, you know, from the wire utility's perspective, there's there's these different overlapping directives that we're trying to comply with all at the same time. So that that sort of complicates the response, I would say.
Speaker 3
It does. Okay. I've just gotten the word from Monica that we should turn to a summary and closure of this meeting. I wanna thank everyone for their comments. This has been a very interesting, set of comments.
And, lord knows we've got a long way to go to make California into the paradise that we hope it will be.
Speaker 2
So I can, give a quick recap. You know, we're trying to just recap at the end of all the sessions kind of the main themes. And, you know, in this conversation, it definitely was I mean, you know, there's definitely some supplier diversity and workforce development potential opportunities in the water space that we haven't really discussed or pursued. So there's probably some some angles there to talk about and continuing to partner with our other colleagues on promoting racial equity and diversity of our workforce such that the people that we're trying to lift up in these conversations actually work at the PUC and that we that we represent California, definitely heard that loud and clear. We I mean, obviously, the conversation talked quite a bit about consolidation and what the opportunity is to, create efficiencies and streamlining in the consolidation process such that it benefits disadvantaged communities and environmental justice communities.
And, I mean, I think I will speak as a new a person that's relatively new to water. I know water is its own very important space, and I I wouldn't say I'm any kind of expert. But understanding what some of these dynamics are in communities, communities that might wanna stay in their small water utility or where there might be opportunities to get into a bigger utility where the cost can be shared and burdens can be lifted. And thinking about are there ways that we need to approach that from an environmental and social justice perspective for specific communities potentially, but generally the consolidation process altogether and how that might facilitate better service and quality for environmental justice communities. Also heard a little bit about, you know, we talked about affordability a little bit and some of the tools to analyze, you know, disadvantaged communities and impacts and maybe thinking about how water division can continue to educate utilities and stakeholders on what's available there so that it can inform all of our work.
There may be some opportunities there. But Steve and Jeff, anything else that, you know, could potentially be added to our to do list, or did I kinda get that?
Speaker 3
I think you've pretty much got it. I I would say that the two proceedings that are underway that involve the water division, both the affordability proceeding and the low income water proceeding will have their own actions. And, of course, this is not a meeting to discuss those proceedings. It's just come up as being an area where we are going forward. So there will be additional actions that will be taken by the CPUC in the months to come.
And, you know, this has been an interesting discussion. I wish we could go on further, but I'm sort of glad that I get to go offline for a little while now.
Speaker 1
Thanks everyone for your for your time and feedback. It'll all be considered in the the update to the ESJ action plan. And the Commission's intending to release a draft of the plan later this spring and that'll allow for additional public comment at that time. So in the meantime, if there are any other topics that didn't get discussed, feel free to submit those thoughts and comments to the ESJ action plan email that was dropped in the chat at the beginning. And Monica, unless you have any other anything else to folks on, then I think we're Come back
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