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Another water provider seeks rate hike

Courtesy photo/Sierra SunWater gushes from a new well that Diamond Well Drilling bored for the Fulton Water Co. The small North Shore water provider is seeking higher rates to pay for improvements to its delivery system.
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A small North Shore water company is seeking a proposed rate increase of nearly 50 percent to pay for expansion and to meet the need for water in wildfire emergencies.

The Fulton Water Company is one of several private water providers struggling to keep up with regulations and demand in the Tahoe Basin.

Craig Fox, who manages the Fulton Water Co., drilled a 440-foot well early last week to help his company keep up with demand of the firm’s 875 customers in the Cedar Flat area. He blamed the increased demand on the desire of homeowners to improve their properties.



“Landscaping ” everyone who buys a house puts a lawn in,” Fox said in a phone interview. “Back 20 years ago everyone kept their yard somewhat natural.”

Fox, who manages the company with his wife and father-in-law, said they invested $1 million 10 years ago to increase production and storage the last time he went to the California Public Utilities Commission for a rate increase.



Now, with demand threatening to outstrip supplies, he’s seeking another rate increase.

“What happens in the summer is we’re pushing the edge of what we can produce, so I’m hoping that this new well will provide that cushion,” he said.

Fox said he also worries about adequate fire protection, and wants to ensure that the company can supply the fire hydrants in his coverage area. Fox raised his rates incrementally for the past few years. Last year, his consumer price index increase was 2.3 percent.

“We haven’t been raising [rates] enough,” he said. “The last general rate increase was in 1998 ” we’ve been delinquent.”

He said operating a small water company is getting more expensive because of operating costs and the age of the infrastructure, 80 years old in the case of Fulton.

Fox said the company rarely makes a profit. When the company does see black in its operating expenses, the surplus goes toward income tax, something he said the larger public utilities like North Tahoe and Tahoe City are not required to pay. He said a private company also has a harder time absorbing the cost of drilling a well.

Small water companies often find it more difficult to maintain their systems, according to a spokesperson for the California Public Utilities Commission.

“Generally it is because they have let their infrastructure go and the population has grown,” said Public Information Officer Susan Carothers.

Placer County has eight privately owned water companies around the lake, according to state PUC Water Chief Fred Curry. They are as old as the subdivisions they serve, he said, adding that the costs to operate those systems rise as regulations increase.

The water chief said before 1990 private companies had to test the water supply for 50 contaminants, but now must monitor the presence of more than 120 due to stiffer regulations.

“You cannot just add chlorine; you have to know all of the consequences,” he said.

Curry said infrastructure costs are another problem for California’s small water providers, as water lines from the 1960s that cost $20 per foot now cost as much as $100 per foot. The added safeguards prompted Curry to speculate about the future of smaller mom-and-pop operations like Fox’s company.

“The future is going to be consolidation ” either the small companies will be taken over by the counties or the larger investor owned companies will take them over,” Curry said.

Operators like Fox may hold on though, if they continue to provide good water at a fair rate, Curry said. To do so, they may have to approach the utility commission for adjusted rates more often than once a decade.


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