Assembly committee advances bill letting water corporations join JPAs for pooled insurance

Assemblymember Blanca Rubio’s AB 428 cleared the committee after testimony from small utilities and pooled‑insurance providers describing sharp recent increases in property insurance costs and potential customer impacts.

The bill would authorize water corporations to participate in JPAs for pooled insurance purposes and requires demonstration that JPA membership would benefit customers by reducing rates or improving service. The bill was amended to require reinsurance and liability coverage when a water corporation joins a JPA, addressing concerns from the governor’s veto message on a prior version.

Jennifer Lukins, owner of Lukins Brothers Water Company and chair of the California Water Association Small Company Committee, described a rapid escalation in her company’s property insurance: $43,000 in 2020, $141,000 in 2021 after the Caldor fire, and $279,000 in 2024 — despite no direct wildfire damage or claims. She said those cost increases raised customer bills, noting a $48 annual increase passed through to customers last year to cover property insurance increases.

Representatives of the California Association of Mutual Water Companies, which operates a large pooled program serving more than 600 water and wastewater suppliers, told the committee their JPA is fully reinsured and reinvests proceeds to support smaller systems. They said including investor‑owned utilities in pooled structures could reduce insurance costs and help systems remain operational.

The committee voted to pass AB 428 to the Local Government Committee; the committee record shows a final vote of 17 ayes and 0 noes.