Fontana Water Company

October 31, Mr [redacted] Fontana, California Subject: Revdex.com Customer Complaint ID# Dear Mr [redacted] : This letter serves as a response to a letter received from the Revdex.com dated October 24, requesting information regarding Fontana Water Company's (FWC) recent general rate increasePursuant to Public Utilities Code § 455.2, all Class A investor owned water utilities such as FWC are required to file a General Rate Case (GRC) with the CPUC at least every three (3) yearsThe primary purpose of a GRC is to allow the CPUC and its staff (including the Office of Ratepayer Advocates) to conduct a thorough and comprehensive review and audit of FWC's accounting, operations and ratesIn accordance with Public Utilities Code § 451, the CPUC is required to set rates for utility service that arc "just and reasonable." This means the rates should be set at a level that affords FWC an opportunity to recover no more than the actual costs necessary to provide water service that meets federal Safe Drinking Water Act standards in quantities and at pressures sufficient to fight tires and protect the public health and safetyFWC's last GRC was filed in 2011, and the most recent GRC (the subject of your inquiry) was originally scheduled to be filed in However, FWC requested a delay which was granted by the CPUC, and FWC ultimately filed its GRC in Consequently, the most recent GRC was filed five (5) years after the prior GRCIn June 2017, after approximately eighteen (18) months of review, the CPUC issued Decision 17-06-in FWC's GRC, authorizing an increase in revenues of $million, or 27.5%I understand this is a significant increase, but I note that since 2008, FWC's base rates have increased by an annual average of just 2.8%A recent study of water rate trends in California Counties conducted by the American Water Works Association found that the average annual water rate increase in San Bernardino County since has been 6.9%FWC's rates have increase by an average of 5.4% since The single largest factor driving the need for increased rates is reduced water use as a result of conservationThe majority (70% - 80%) of FWC's costs arc fixedUnfortunately, this means that when customers do the right thing and conserve., rates must be increased to cover the differenceMoreover, the types of variable costs that would otherwise decrease during periods of low water usage, such as water supply and production costs, have increased and remain drastically higher than they were prior to the recent droughtOf the 27.5% rate increase approved by the CPUC, reductions in water use account for 9.5% The next largest factor driving the need for increased rates is water system infrastructure improvementsIn order to provide its customers with safe, adequate and reliable water service, on demand, hours a day with enough redundancy to overcome mechanical or emergency failures, FWC must spend million through on utility infrastructure improvementsThis includes million to replace old, leaky water mains, service lines, fire hydrants, and meters that lose precious water, increase the risk of contamination, and result in higher operation and maintenance costsOther utility infrastructure improvements include million related to water production, pumping and storage facilities to ensure adequate water supplies are available to meet peak demands and public safety (i.efire flow) requirementsThe remaining $million is related to water treatment facilities, communications improvements and other necessary equipment used throughout the water distribution system, FWC's planned improvements were reviewed in the CRC and are timed to maximize the useful life of the existing infrastructure, while minimizing the risk of a catastrophic and costly failureOf the 27.5% rate increase approved by the CPUC, utility infrastructure improvements account for 6.3%The next largest factor driving the need for increased rates is increased water supply and production costs, which include purchased water and groundwater pumping assessments, the cost of electric power for pumping, and chemicals used in the treatment processIn 2008, FWC paid an average of $per acre foot for water either purchased or pumped from one of its wellsIn 2017, that cost has risen to — an increase of 151%Overall, increased water supply and production costs account for 5.8% of the 27.5% rate increaseThe remaining components of the recent rate increase consist of increased taxes (3.4%) and general inflationary increases in operation and maintenance costs (2.6%)The following table summarizes the different components of the recent rate increase: Summary of General Rare Increase: Reduced Water Sales from Conservation 9.5% Utility Infrastructure Improvements 6.3% Water Supply & Production Costs 5.8% Taxes 3.4% Operation and Maintenance Costs 2.5% Total Rate Increase 27.5% FWC's GRC applications are subject to a lengthy and detailed process that includes an extensive review of its books and accounting records by the CPTiC and the Office of Ratepayer Advocates'This process includes a formal evidentiary hearing where FWC personnel arc subject to inquiry under oath hefore an Administrative Judge In regard to your comment about tiered rates, FWC implemented tiered rates on July 1, Most California water agencies implemented tiered rates around this same period of time in an effort to get customers to conserve waterFWC's first tier of Ccf (hundred cubic feet) represents the average usage of its residential customersTherefore, any usage above this quantity is at a higher rateIf you need help breaking down Your water bill please contact our Customer Service Manager at ###-###-####, Lastly, FWC as authorized by the CPUC manages its east of service via a full cost balancing accountMeaning, any increases or decrease in water cost is balanced through this account to always reflect the actual cost of service to its customersI hope this letter provides the additional information you were seeking and than you for the opportunity to explain it in detailJMS:bf [redacted] General Manager

Initial Business Response / [redacted] (1000, 5, 2015/08/20) */ Contact Name and Title: [redacted] General Manage Contact Phone: Contact Email: [redacted] @fontanawater.com The billing error was at the fault of Fontana Water Company and we have contacted the customer directly to resolve the issue Initial Consumer Rebuttal / [redacted] (3000, 7, 2015/08/20) */ (The consumer indicated he/she DID NOT accept the response from the business.) As of yet, I have not been contacted unless they are sending something by mailI do not yet know how they plan to resolve this issueThere was only a notice on my door stating that they reread my meter yesterday which does not resolve this issue Final Business Response / [redacted] (4000, 9, 2015/09/03) */ As previously noted, we have made contact with the customer and adjusted the bill accordinglyWe had a follconversation with the customer on and the customer stated they were satisfied Final Consumer Response / [redacted] (2000, 11, 2015/09/07) */ (The consumer indicated he/she ACCEPTED the response from the business.)

Revdex.com:
I have reviewed the response made by the business in reference to complaint ID 12440792, and find that this resolution is satisfactory to meIt's still a rip off and a lot of high class rhetoricBottom line, the consumer has to accept it for what it is and pay our monthly bill or have no serviceToo bad there is not competition from another local water company with cheaper rates to go to, which might force you people to lower your rates in order to stay competitive and in businessBut since there is not, you people have we the consumer screwed over a barrelCuz if we want the service, we have to pay all the ridiculous prices for it

October 31, 2017 Mr. [redacted] Fontana, California 92335 Subject: Revdex.com Customer Complaint ID# 12440792 Dear Mr. [redacted]: This letter serves as a response to a letter received from the Revdex.com dated October 24, 2017...

requesting information regarding Fontana Water Company's (FWC) recent general rate increase. Pursuant to Public Utilities Code § 455.2, all Class A investor owned water utilities such as FWC are required to file a General Rate Case (GRC) with the CPUC at least every three (3) years. The primary purpose of a GRC is to allow the CPUC and its staff (including the Office of Ratepayer Advocates) to conduct a thorough and comprehensive review and audit of FWC's accounting, operations and rates. In accordance with Public Utilities Code § 451, the CPUC is required to set rates for utility service that arc "just and reasonable." This means the rates should be set at a level that affords FWC an opportunity to recover no more than the actual costs necessary to provide water service that meets federal Safe Drinking Water Act standards in quantities and at pressures sufficient to fight tires and protect the public health and safety. FWC's last GRC was filed in 2011, and the most recent GRC (the subject of your inquiry) was originally scheduled to be filed in 2013. However, FWC requested a delay which was granted by the CPUC, and FWC ultimately filed its GRC in 2016. Consequently, the most recent GRC was filed five (5) years after the prior GRC. In June 2017, after approximately eighteen (18) months of review, the CPUC issued Decision 17-06-008 in FWC's GRC, authorizing an increase in revenues of $15.31 million, or 27.5%. I understand this is a significant increase, but I note that since 2008, FWC's base rates have increased by an annual average of just 2.8%. A recent study of water rate trends in 14 California Counties conducted by the American Water Works Association found that the average annual water rate increase in San Bernardino County since 2003 has been 6.9%. FWC's rates have increase by an average of 5.4% since 2003. The single largest factor driving the need for increased rates is reduced water use as a result of conservation. The majority (70% - 80%) of FWC's costs arc fixed. Unfortunately, this means that when customers do the right thing and conserve., rates must be increased to cover the difference. Moreover, the types of variable costs that would otherwise decrease during periods of low water usage, such as water supply and production costs, have increased and remain drastically higher than they were prior to the recent drought. Of the 27.5% rate increase approved by the CPUC, reductions in water use account for 9.5% The next largest factor driving the need for increased rates is water system infrastructure improvements. In order to provide its customers with safe, adequate and reliable water service, on demand, 24 hours a day with enough redundancy to overcome mechanical or emergency failures, FWC must spend 545.99 million through 2019 on utility infrastructure improvements. This includes 522.27 million to replace old, leaky water mains, service lines, fire hydrants, and meters that lose precious water, increase the risk of contamination, and result in higher operation and maintenance costs. Other utility infrastructure improvements include 518.48 million related to water production, pumping and storage facilities to ensure adequate water supplies are available to meet peak demands and public safety (i.e. fire flow) requirements. The remaining $5.24 million is related to water treatment facilities, communications improvements and other necessary equipment used throughout the water distribution system, FWC's planned improvements were reviewed in the CRC and are timed to maximize the useful life of the existing infrastructure, while minimizing the risk of a catastrophic and costly failure. Of the 27.5% rate increase approved by the CPUC, utility infrastructure improvements account for 6.3%. The next largest factor driving the need for increased rates is increased water supply and production costs, which include purchased water and groundwater pumping assessments, the cost of electric power for pumping, and chemicals used in the treatment process. In 2008, FWC paid an average of $190 per acre foot for water either purchased or pumped from one of its wells. In 2017, that cost has risen to 5478 — an increase of 151%. Overall, increased water supply and production costs account for 5.8% of the 27.5% rate increase. The remaining components of the recent rate increase consist of increased taxes (3.4%) and general inflationary increases in operation and maintenance costs (2.6%). The following table summarizes the different components of the recent rate increase: Summary of General Rare Increase: Reduced Water Sales from Conservation 9.5% Utility Infrastructure Improvements 6.3% Water Supply & Production Costs 5.8% Taxes 3.4% Operation and Maintenance Costs 2.5% Total Rate Increase 27.5% FWC's GRC applications are subject to a lengthy and detailed process that includes an extensive review of its books and accounting records by the CPTiC and the Office of Ratepayer Advocates. 'This process includes a formal evidentiary hearing where FWC personnel arc subject to inquiry under oath hefore an Administrative Judge.  In regard to your comment about tiered rates, FWC implemented tiered rates on July 1, 2010. Most California water agencies implemented tiered rates around this same period of time in an effort to get customers to conserve water. FWC's first tier of 16 Ccf (hundred cubic feet) represents the average usage of its residential customers. Therefore, any usage above this quantity is at a higher rate. If you need help breaking down Your water bill please contact our Customer Service Manager at ###-###-####,  Lastly, FWC as authorized by the CPUC manages its east of service via a full cost balancing account. Meaning, any increases or decrease in water cost is balanced through this account to always reflect the actual cost of service to its customers. I hope this letter provides the additional information you were seeking and than you for the opportunity to explain it in detail. JMS:bf [redacted] General Manager

Initial Business Response /* (1000, 5, 2015/08/20) */
Contact Name and Title: [redacted] General Manage
Contact Phone: 909.822.2201
Contact Email: [redacted]@fontanawater.com
The billing error was at the fault of Fontana Water Company and we have contacted the customer directly to resolve the...

issue.
Initial Consumer Rebuttal /* (3000, 7, 2015/08/20) */
(The consumer indicated he/she DID NOT accept the response from the business.)
As of yet, I have not been contacted unless they are sending something by mail. I do not yet know how they plan to resolve this issue. There was only a notice on my door stating that they reread my meter yesterday which does not resolve this issue.
Final Business Response /* (4000, 9, 2015/09/03) */
As previously noted, we have made contact with the customer and adjusted the bill accordingly. We had a follow-up conversation with the customer on 9.2.15 and the customer stated they were satisfied.
Final Consumer Response /* (2000, 11, 2015/09/07) */
(The consumer indicated he/she ACCEPTED the response from the business.)