Proposed water rate spike in Spreckels means newer pipes, drier lawns.
Wednesday, November 23, 2011
Changing foliage and red leaves scattered across green lawns makes the 500-person town of Spreckels look almost New England-like in the fall.
But green lawns may go the way of Salinas Valley sugar beets if Tanimura & Antle, the owner of Spreckels Water Company, gets the green light to bill customers based on usage. Residents today pay a flat rate – less than $22 a month – which has been in place since 1993. T&A is now seeking approval from the California Public Utilities Commission to start billing customers using meters they’ve already installed.
The flat rate is one of many relics of Spreckels’ water system, and as T&A modernizes main lines, valves and engines, it’s seeking about $300,000 to help cover those costs – which the company hopes the PUC approves in the form of a 252-percent rate increase for the average customer.
Since T&A bought Spreckels Water Company in 2007, it’s been losing about $25,000 annually on the venture, according to documents submitted to the PUC.
“We’re farmers. We’re not trying to expand into the water business,” says Kerry Varney, T&A’s executive vice president.
Varney’s Spreckels office sits at the end of a museum-like corridor featuring watercolors of farms and display cases of T&A artifacts. Buying the water company came as a natural follow-up to buying the Spreckels Sugar Company’s industrial park in 1997, he says, and gave the company stability and reliability.
Jeff Taylor, general manager of Spreckels Water Company, describes a history of low pressure and rusty, cloudy water plaguing the century-old system.
Until T&A bought the water utility for $210,000, it was owned by an offshoot of the Spreckels Sugar Company, which through a series of mergers and acquisitions was held by Buffalo, N.Y.-based Yale Industrial Products. Yale maintained the system through a management contract with California Water Service Company. Cal Water protested T&A’s acquisition, but was dismissed by the PUC. Cal Water argued: “[T&A] has a conflict of interest between its unregulated line of business and Spreckels’ ratepayers, [and] has no experience in managing, operating and maintaining a public water system.”
Varney says T&A’s ownership is better for the community, since the grower is also a neighbor, and keeping the service area small means dollars are invested into improvements. “They can see the guys digging in their streets,” Varney says. “The investments directly benefit Spreckels.”
T&A has spent $1 million on improvements, and hopes new equipment will cut future operating costs. The PUC is expected to issue a recommendation on T&A’s request within three months.