Catalina Island residents could see their monthly water bills will rise more than 150% over the next five years if a state commission approves a proposal by Southern California Edison.
The utility company, which acquired the electric, water and gas utilities on the island in 1962, filed a request with the California Public Utilities Commission in late October seeking approval for rate increases to offset increased operating expenses and other costs, some of which are related to past drought conditions, according to a public notice issued by SCE.
During the most recent California drought, city of Avalon Mayor Anni Marshall said the island’s businesses and 4,200 residents—like many across the state—reduced water consumption by 40%, cutting SCE revenue.
If approved, Catalina water customers’ average monthly water bills would increase from $72.45 to $101.48 in 2022. By 2026, the average monthly water bill would be $182.79, a 153% increase from current rates. For commercial water customers such as restaurants and hotels, average monthly bills would increase 208% from $170.59 to $355.11 over five years.
The island’s economy is propped up almost entirely by tourism, with many workers paying more than half of their income toward rent as it is, according to Marshall.
“It’s ridiculous. We are a rural, disadvantaged community. We have a lot of renters … that work in the tourism industry—in hotels and restaurants,” she said, noting that rents on the island can be as high as $2,500 per month. “Their wages aren’t high and those [increases] will be put on the backs of those tenants.”
The city is also a major employer for the island, but because of the decimation of tourism due to COVID-19 over the past year, many city employees were laid off, furloughed or had their hours reduced.
The phased-in approach is meant to mitigate impacts to customers on the island, according Jim Buerkle, SCE’s director for generation.
“To reduce the impact on low-income customers,” Buerkle said in October, “SCE is also proposing to increase the amount of the discount that enrolled low-income Catalina water customers receive from the current 20% to 32.5%.”
The increase is expected to generate $9.3 million from Catalina water customers. An additional $29 million to cover drought and environmental expenses on the island would be generated through a 29-cent increase to all 15 million of SCE’s customers’ monthly electric bills.
This cross-subsidy—charging one group (all SCE customers) more to lower the cost for another group (island residents)—is addressed by the company in its filing with the state. The company argues that the island has a small population with only about 2,000 water customers and that a large portion of the wear and tear on the infrastructure comes from the more than one million annual visitors to the island.
A 2016 study by the Catalina Island Chamber of Commerce found that 70% of annual visitors reside in Southern California, meaning most of the visitors are SCE customers who directly benefit from the island’s water infrastructure and should share in some of the cost for the popular tourist destination. Additionally, the island hosts over 60,000 students each year for educational trips and is home to an environmental research facility.
The mayor acknowledged the needs of SCE to pay for critical infrastructure that provides water, electricity and gas to residents and visitors across the 22-mile-long island, noting the island’s terrain presents more of a challenge for the company than cities on the mainland. But as a 36-year resident of the island, Marshall said this fee increase proposal is by far the largest she can remember.
“There are already people moving off the island because of high housing costs,” Marshall said. “You add these fees, does that mean more people are going to try to bail out? Sadly, I think it might.”
The Avalon City Council, the Catalina Conservancy, the Catalina Island Company and others have joined together to fight the proposal, Marshall said, adding that they would be open to compromising for a more reasonable increase.
“We’re glad to see the public participating, especially organizations that deeply care about the island,” SCE spokesman Robert Laffoon-Villegas said. “They work pretty tirelessly to do right by, certainly the visitors of the island, but also the residents.”
Two public forums are scheduled for Tuesday, March 30 at 1:30 and 6 p.m. The event will be webcast at www.adminmonitor.com/ca/cpuc. The public can also listen in by calling 800-857-1917 and using the passcode 5180519. Public comments can be made over the phone or at cpuc.ca.gov/a2010018comments.