Two of the fundamental principles of setting rates for public utilities are that rates should be based on the cost of providing service, and there should be no discrimination between different customers. These rules prevent one or more customers or classes of customers from subsidizing the costs incurred by the utility to provide service to other customers. If the total costs of a utility are seen as a fixed pie, these rules prevent one customer from having to pay for portions of the pie eaten by another customer.
This post gives an overview of the organization of water utilities in California. For this purpose, water utilities are defined as entities that own and operate public drinking water systems at the retail level. There are few sources of information about who provides water utility service in the state, and this post offers only an overview of the topic. The data used for the analysis in this post was derived from a proprietary database I have of all water utilities in California.
The California Public Utilities Commission (CPUC) has approved acquisition of the water system assets of Riverview Acres Water Company (RAWC) in Trinity County by Salyer Mutual Water Company (SMWC). The CPUC decision in Resolution No. W-4923 sets forth the criteria for transferring a water system from an investor-owned water utility to a mutual water company and illustrates the relatively favorable view of such transfers by the CPUC.