The California Public Utilities Commission (CPUC) held its third workshop on water acquisitions on June 13, 2023, focusing on the impacts of these acquisitions on ratepayers. A significant portion of the discussion centered around the East Pasadena acquisition, where concerns about alleged windfall profits were addressed.

A representative highlighted that claims of excessive profits, such as a reported 700% increase, require deeper examination. They emphasized that the original company involved in the acquisition was established over a century ago, and profits should be viewed in the context of long-term investment rather than short-term gains. For instance, an investment of $1,000 in 1913 would have dramatically increased in value by 2021, illustrating the importance of historical context in evaluating profitability.

The representative also clarified that a substantial portion of the acquisition cost—approximately $26.7 million—was attributed to water rights, which are valued based on a robust market in Southern California. They argued that this market operates without manipulation, and the pricing reflects legitimate market conditions.

Additionally, the discussion touched on the complexities of merging rate cases with acquisition processes. The representative expressed skepticism about the efficiency of such a merger, citing historical delays in both rate case and acquisition decisions. They noted that combining these processes could complicate appraisals and prolong timelines further.

The workshop concluded with a call for a more nuanced understanding of the financial implications of water acquisitions, urging stakeholders to look beyond sensational claims and focus on the detailed financial records and market conditions that underpin these transactions. The CPUC is expected to continue evaluating these issues as they move forward with regulatory decisions impacting California's water utilities and their ratepayers.