The California Public Utilities Commission (CPUC) held Workshop #3 on Ratepayer Impacts in the ongoing Water Acquisitions Rulemaking (R.22-04-003) on June 13, 2023. The meeting focused on the implications of water utility acquisitions, particularly concerning affordability and equity for ratepayers.

A significant discussion point was the long-term impact of capital investments on water affordability, illustrated by a case study from Baltimore. The city entered a consent decree with the Environmental Protection Agency (EPA) to address combined sewer overflows, resulting in a $3 billion investment. This investment led to a marked increase in the number of census tracts experiencing unaffordable water and wastewater bills. The data presented showed that as Baltimore made these capital investments, areas with high water burdens—defined as water and wastewater bills exceeding 10% of household income—grew significantly. This highlighted the need for a long-term perspective when evaluating affordability commitments in utility acquisitions.

The workshop also delved into the concept of equity in utility services. Three types of equity were discussed: horizontal equity, vertical equity, and equity plus. Horizontal equity refers to distributing equal resources to achieve a specific goal, while vertical equity acknowledges that different areas may require varying levels of resources based on their unique needs. Equity plus takes this further by ensuring that resource distribution explicitly considers these differing needs.

Participants emphasized the importance of understanding the distribution of both burdens and amenities in utility services. Burdens include costs associated with acquiring a system, while amenities pertain to service quality and customer support. The discussions underscored the necessity of addressing geographic disparities in access to water services, drawing parallels to broader social issues such as unequal access to public amenities.

In conclusion, the CPUC workshop highlighted critical considerations for future water utility acquisitions, particularly the need for a balanced approach to affordability and equity. As the commission moves forward, these discussions will inform policies aimed at ensuring fair access to water services for all Californians.