When conservation puts a squeeze on utilities

Photo: LA Times

Photo: LA Times

Los Angeles, Feb 13 (Los Angeles Times) - The citizens of Claremont showed what they thought of their local water company's rates last November, when they voted overwhelmingly to let the city seize the private company and begin the process of converting it into a municipal utility.

Measure W, the first step in converting the company into a municipal utility, passed overwhelmingly, 71%-29%. One key issue in the Measure W campaign was the water company's practice of collecting higher rates from residents when they used less water, as allowed by the state Public Utilities Commission. "If we conserve," Mayor Joe Lyons said, "we don't benefit."

The conflict in Claremont over how to compensate utilities when customers reduce their usage, and therefore the firms' revenue, is being replicated across California and nationwide, and over electric rates even more than over water. Regulators and consumer groups are grappling with how to force utilities to encourage their customers to conserve, even though it means less income, while also ensuring that customers see the benefits of conservation via lower bills.

"The conversation about what's happening to utilities, and are they going to continue to exist, and what's the future look like, has moved so fast in the last couple of years," says Elisabeth Graffy, a senior scientist at Arizona State University's Global Institute of Sustainability.

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