Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in prescribed languages. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs, and would require the enforcement moneys collected by the board to be deposited in the Safe Drinking Water Account. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service. The bill would require an urban and community water system to waive interest charges on delinquent bills for, and would limit the amount of a reconnection of service fee imposed on, a residential customer who demonstrates, as prescribed, to the urban and community water system household income below 200% of the federal poverty line. The bill would require an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020. The bill would provide that the provisions of the bill are in addition to the provisions in existing law duplicative of the bill and that where the provisions are inconsistent, the provisions described in the bill apply.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in prescribed languages. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs, and would require the enforcement moneys collected by the board to be deposited in the Safe Drinking Water Account. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service. The bill would require an urban and community water system to waive interest charges on delinquent bills for, and would limit the amount of a reconnection of service fee imposed on, a residential customer who demonstrates, as prescribed, to the urban and community water system household income below 200% of the federal poverty line. The bill would require an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020. The bill would provide that the provisions of the bill are in addition to the provisions in existing law duplicative of the bill and that where the provisions are inconsistent, the provisions described in the bill apply.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in prescribed languages. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs, and would require the enforcement moneys collected by the board to be deposited in the Safe Drinking Water Account. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. service. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for for, and would limit the amount of a reconnection of service fee imposed on, a residential customer who demonstrates, as prescribed, to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. line. The bill would require an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020. The bill would provide that the provisions of the bill are in addition to the provisions in existing law duplicative of the bill and that where the provisions are inconsistent, the provisions described in the bill apply.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in prescribed languages. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs. occurs, and would require the enforcement moneys collected by the board to be deposited in the Safe Drinking Water Account. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer who demonstrates, as prescribed, to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020. The bill would provide that the provisions of the bill are in addition to the provisions in existing law duplicative of the bill and that where the provisions are inconsistent, the provisions described in the bill apply.

(1)Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in prescribed languages. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances, including the demonstration by the customer that he or she is financially unable to pay, as specified, under penalty of perjury. By expanding the application of the crime of perjury, this bill would impose a state-mandated local program. circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer who demonstrates, as prescribed, and under penalty of perjury, to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020. The bill would provide that the provisions of the bill are in addition to the provisions in existing law duplicative of the bill and that where the provisions are inconsistent, the provisions described in the bill apply.

(1)Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in English, Spanish, or any other language spoken by at least 10% of the people residing in its service area. prescribed languages. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs. The bill would eliminate existing notice and other requirements relating to the termination of residential service for commission-regulated urban and community water systems and instead would apply the provisions of this bill to those systems. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances. circumstances, including the demonstration by the customer that he or she is financially unable to pay, as specified, under penalty of perjury. By expanding the application of the crime of perjury, this bill would impose a state-mandated local program. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer who demonstrates demonstrates, as prescribed, and under penalty of perjury, to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in English, Spanish, or any other language spoken by at least 10% of the people residing in its service area. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs. The bill would eliminate existing notice and other requirements relating to the termination of residential service for commission-regulated urban and community water systems and instead would apply the provisions of this bill to those systems. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed.

This bill would prohibit residential service from being discontinued under specified circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer who demonstrates to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site. site and to the board, and the bill would require the board to post on its Internet Web site the information reported. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on discontinuation of water service to certain types of residences for nonpayment available in English, Spanish, or any other language spoken by at least 10% of the people residing in its service area. The bill would require the policy to include certain components, be available on the systems Internet Web site, and be provided to customers in writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each day in which the violation occurs. The bill would eliminate existing notice and other requirements relating to the termination of residential service for commission-regulated urban and community water systems and instead would apply the provisions of this bill to those systems. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service for nonpayment no less than 7 business days before discontinuation of residential service, as prescribed. The bill would prohibit an urban and community water system from discontinuing residential service for nonpayment until the system notifies the local health department and the local health department assesses that discontinuing residential service at the residence would not pose a grave threat to the health and safety of the residents, except as provided. By imposing new duties on local health departments, this bill would impose a state-mandated local program.

This bill would prohibit residential service from being discontinued under specified circumstances, including if a customer demonstrates and certifies under penalty of perjury that his or her household has experienced a severe economic hardship within the last year, as specified. By expanding the crime of perjury, the bill would impose a state-mandated local program. circumstances. The bill would require an urban and community water system that discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer who demonstrates to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its Internet Web site. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2020.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on residential discontinuation of water service shutoff to certain types of residences for nonpayment available in English, Spanish, or any other language spoken by at least 5% 10% of the people residing in its service area. The bill would require the policy to include certain components and components, be available on the systems Internet Web site site, and be provided annually to customers in writing. writing, upon request. The bill would make provide for enforcement of these provisions, including making a violation of these provisions punishable by a civil penalty issued by the board or the commission, as appropriate, in an amount not to exceed $500 $1,000 for each day in which the violation occurs. The bill would eliminate existing notice and other requirements relating to the termination of residential service for commission-regulated urban and community water systems and instead would apply the provisions of this bill to those systems. This The bill would prohibit an urban and community water system from shutting off discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on discontinuation of residential service shutoff for nonpayment no less than 3 7 business days before shutoff, discontinuation of residential service, as prescribed. The bill would prohibit an urban and community water system from shutting off discontinuing residential service for nonpayment until the system notifies the local health department and the local health department assesses that a shutoff discontinuing residential service at the residence would not pose a grave threat to the health and safety of the residents, except as provided. By imposing new duties on local health departments, this bill would impose a state-mandated local program.

This bill would prohibit residential service from being shut off discontinued under specified circumstances. circumstances, including if a customer demonstrates and certifies under penalty of perjury that his or her household has experienced a severe economic hardship within the last year, as specified. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would require an urban and community water system that shuts off discontinues residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer with a demonstrated who demonstrates to the urban and community water system household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system to report the number of annual shutoffs discontinuations of residential service for inability to pay on its Internet Web site. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2019, 2020, and any other urban and community water system to comply with the bills provisions on and after April 1, 2019. 2020.

Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations. Existing law requires certain notice to be given before a water corporation, public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed.

This bill would require an urban and community water system, defined as a public water system that supplies water to more than 200 service connections, to have a written policy on residential service shutoff available in English, Spanish, or any other language spoken by at least 5% of the people residing in its service area. The bill would require the policy to include certain components and be available on the systems Internet Web site and be provided annually to customers in writing. The bill would make a violation of these provisions punishable by a civil penalty issued by the board or the commission, as appropriate, in an amount not to exceed $500 for each day in which the violation occurs. The bill would eliminate existing notice and other requirements relating to the termination of residential service for commission-regulated urban and community water systems and instead would apply the provisions of this bill to those systems. This bill would prohibit an urban and community water system from shutting off residential service until a payment by a customer has been delinquent for at least 60 days. The bill would require an urban and community water system to contact the customer named on the account and provide the customer with the urban and community water systems policy on residential service shutoff no less than 3 business days before shutoff, as prescribed. The bill would prohibit an urban and community water system from shutting off residential service until the system notifies the local health department and the local health department assesses that a shutoff at the residence would not pose a grave threat to the health and safety of the residents, except as provided. By imposing new duties on local health departments, this bill would impose a state-mandated local program.

This bill would prohibit residential service from being shut off under specified circumstances. The bill would require an urban and community water system that shuts off residential service to provide the customer with information on how to restore service and petition for a waiver of reconnection fees. The bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for a residential customer with a demonstrated household income below 200% of the federal poverty line and would limit the amount of a reconnection of service fee imposed on any other residential customer. The bill would require an urban and community water system to report the number of annual shutoffs for inability to pay on its Internet Web site. The bill would require an urban water supplier, as defined, or an urban and community water system regulated by the commission, to comply with the bills provisions on and after February 1, 2019, and any other urban and community water system to comply with the bills provisions on and after April 1, 2019.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

 UNFINISHED BUSINESS  

Bill No: SB 998

Author:

:

Vote:

SENATE ENERGY, U. & C. COMMITTEE: 8-1, 4/3/18

AYES: Hueso, Bradford, Hertzberg, Hill, McGuire, Skinner, Stern, Wiener

NOES: Morrell

NO VOTE RECORDED: Cannella, Vidak

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 4/18/18

AYES: Wieckowski, Gaines, Hill, Lara, Skinner, Stern

NO VOTE RECORDED: Stone

SENATE JUDICIARY COMMITTEE: 4-2, 4/24/18

AYES: Jackson, Hertzberg, Monning, Wieckowski

NOES: Moorlach, Anderson

NO VOTE RECORDED: Stern

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SENATE FLOOR: 25-10, 5/29/18

AYES: Allen, Atkins, Beall, Bradford, De León, Dodd, Gaines, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Skinner, Stern, Wieckowski, Wiener

NOES: Anderson, Bates, Fuller, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, Wilk

NO VOTE RECORDED: Berryhill, Cannella, Newman, Roth

ASSEMBLY FLOOR: 44-26, 8/28/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill requires all public water systems (with more than 200 connections) to have a written policy on discontinuation of residential water service, provide that policy in multiple languages, include provisions for not shutting off water for certain customers that meet specified criteria, prohibit the shutoff of water service until the bill has been delinquent for 60 days, and cap the reconnection fees for restoring water service.

Assembly Amendments

make largely technical, non-substantive changes, but also include changes to the reconnection fees charged to customers whose household income falls below 200 percent of the federal poverty line, and authorize the California Public Utilities Commission (CPUC) to take action in state court to restrain by injunction a water utility of any practice declared in to be unlawful by this bill.

ANALYSIS:

Existing law:

1. Provides that the CPUC has regulatory authority over public utilities, including water corporations. Establishes “public utility” includes every water corporation and sewer system corporation where the service is performed for, or the commodity delivered to, the public or any portion thereof. (California Constitution Article XII and Public Utilities Code §2701)
2. Requires specified notice to be given to a customer and requirements satisfied before a water corporation furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed. (Public Utilities Code §779 et seq.)
3. Requires specified notice to be given to a customer before a public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed. (Public Utilities Code §10009 et seq.)
4. Vests the State Water Resources Control Board (SWRCB) with all of the authority, duties, powers, purposes, functions, responsibilities, and jurisdiction of the State Department of Public Health (CDPH) and its predecessor to enforce the State Drinking Water Act (SDWA). (Health and Safety Code § 116271)

This bill:

1) Defines "residential service" as water service to a residential connection that includes individually metered single-family residences, individually metered and master-metered multifamily residences, master-metered mobilehome parks, individually metered mobilehomes in mobilehome parks, or farmworker housing.

2) Defines "urban and community water system" as a public water system that supplies water to more than 200 service connections.

3) Requires an urban and community water system to have a written policy on discontinuation of residential service for nonpayment available in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by at least 10 percent of the people residing in its service area.

4) Prohibits an urban and community water system from discontinuing residential service for nonpayment until payment by a customer has been delinquent for at least 60 days.

5) Provides that requirements for discontinuation of residential service apply to an urban water supplier not regulated by the CPUC on and after February 1, 2020.

6) Provides that requirements for discontinuation of residential service apply to an urban and community water system regulated by the CPUC on and after February 1, 2020.

7) Provides that the requirements for discontinuation of residential service apply to urban and community water systems not regulated by the CPUC on and after April 1, 2020.

8) Authorizes the SWRCB to enforce the requirements on urban and community water systems for discontinuing residential water service.

9) Prohibits an urban and community water system from discontinuing residential service for nonpayment if all of the following conditions are met: the customer, or tenant of a customer, submits to the urban and community water system the certification of a primary care provider that discontinuation of residential service will be life threatening to, or pose a serious threat to, the health and safety of a resident of the premises where residential service is provided; the customer demonstrates that he or she is financially unable to pay for residential service within the urban and community water system's normal billing cycle; and, the customer is willing to enter into an amortization agreement, alternative payment schedule, or plan for deferred or reduced payment with respect to all delinquent charges.

10) Requires an urban and community water system that discontinues residential service for nonpayment to provide the customer with information on how to restore residential service and petition for a waiver of reconnection fees.

11) Requires an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills once every 12 months for a residential customer who demonstrates that they have income below 200 percent of the federal poverty line.

12) Authorizes an urban and community water system to set a reconnection of service fee at fifty dollars ($50), but not to exceed the actual cost of reconnection if it is less for residential customers that do not meet the criteria for having reconnection fees waived.

13) Requires an urban and community water system to make every good faith effort to inform the residential occupants, by means of written notice, of a single-family dwelling, multiunit residential structure, mobilehome park or permanent resident structure in a labor camp, when the residential occupant is the tenant and the owner of the property's account is in arrears and service is going to be terminated.

14) Requires an urban and community water system to make service available to residential occupants who are the tenant of a property whose account is in arrears, if the residential occupant is willing and able to assume responsibility for charges to the account to the satisfaction of the urban and community water system.

15) Requires an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on the urban and community water system's Internet Web site and to the SWRCB. Requires the SWRCB to post this information on its Internet Web site.

16) Authorizes the Attorney General, at the request of the SWRCB or upon his or her own motion, to bring an action in state court to restrain by temporary or permanent injunction the provisions of this bill.

17) Requires all written notices required under this bill to be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the urban and community water system's service area.

18) States that the provisions of the bill do not apply to the termination of a service connection by an urban and community water system due to an unauthorized action of a customer.

Background

CPUC-regulated water utilities. The CPUC has jurisdiction over water companies that provide water service to about 16 percent of California’s residents with annual water and wastewater revenues totaling $1.4 billion. Approximately 95 percent of those residents are served by nine large water utilities each serving more than 10,000 connections. Combined, the nine largest utilities serve approximately 1.175 million customers. However, the majority of the CPUC-regulated water utilities (92) have service connections of 2,000 or less, and 87 of those have service connections of 500 or less. The CPUC has authorized the largest nine water utilities to offer low-income rate assistance programs similar in concept to those provided to electricity customers through California Alternative Rates for Energy (CARE). However, each program is varied in terms of the amount of the assistance provided to low-income customers and the collection of the surcharge from non-participating ratepayers to cover the cost of the program. Additionally, statute and CPUC rules govern issues regarding discontinuation of service due to nonpayment by these water utilities. Specifically, the CPUC has adopted the following tariff rules: Rule 8 (Notices), Rule 9 (Payment of Bills), Rule 10 (Disputed Bills), and Rule 11 (Discontinuance and Restoration of Service) that relate to the issue of discontinuation of service due to nonpayment.

Publicly owned water utilities. The majority of California’s water customers are served by cities, water districts, and mutual water companies, which are governed by local boards. These utilities are not regulated by the CPUC. As established by Proposition 218 (1996), the majority of these utilities are subject to state constitutional and statutory requirements that ensure water rates are restricted to cost of service. As a result, these entities have limitations, not imposed on the CPUC-regulated utilities, that hinder their ability to increase rates to fund low-income programs for their customers. Additionally, Public Utilities Code requires specified processes for discontinuation of service for customers due to nonpayment which are similar though not as robust as those required for CPUC-regulated utilities.

State Water Resources Control Board (SWRCB). SWRCB has general authority with regard to water quality and drinking water functions of the state government. Under the California Safe Drinking Water Act (Chapter 4 (commencing with Section 116270) of Part 12 of Division 104 of the Health and Safety Code), SWRCB administers provisions relating to public water systems and regulates drinking water to protect public health, including, among other things, adopting primary drinking water standards and maximum contaminant levels for contaminants in drinking water and permitting public water systems.

CPUC v. SWRCB. Under existing law, the CPUC generally has authority over the regulation of services and utilities and assures that California residents have access to safe and reliable utility infrastructure and services. In comparison, the SWRCB has regulatory authority over the quality of the state’s water resources and drinking water. The SWRCB is involved with the quality of the water, especially drinking water, whereas the CPUC is involved with the supply and access to that water. As discussed above, there are investor owned water utilities that are regulated by the CPUC and publicly owned utilities that are not regulated by the CPUC but instead are subject to Proposition 218 and its implementing statutory provisions. An urban and community water system, as defined by SB 998, could fall into either of these categories, depending on the structure of that particular water system. As a bill primarily focused on procedures to be followed in the event of a discontinuation of residential service, this bill seems to mainly be about access to that water and not about water quality. As such, it is questionable whether the SWRCB should have any oversight on the CPUC-regulated utilities regarding service connections, as proposed by this bill.

Division of Corporations (DOC) role in regulating water systems: The DOC within the Department of Business Oversight has responsibility under the Corporate Securities Law of 1968 to approve and register the security offering of mutual water companies. Mutual water companies are privately owned water companies in which each lot owner is entitled to one share per lot that they own. They are managed and operated in accordance with Articles of Incorporation and bylaws approved by the DOC and filed with the Secretary of State. Existing regulations set forth the standards governing the regulation of mutual water companies. These regulations do not deal with the quality of the drinking water served.

Department of Housing and Community Development (DHCD) role in regulating water systems: DHCD is responsible for the regulation of the construction and maintenance of mobile home parks (MHPs) and employee housing facilities, such as labor camps, many of which have independent water systems.

SB 998. This bill proposes to require all public water systems (with more than 200 connections) to have a written policy on discontinuation of residential water service, provide that policy in multiple languages, and include provisions for not shutting off water for those customers that can demonstrate that losing water service will be life threatening; the customer is unable to pay during the water system's normal billing cycle; and the customer is willing to enter into a payment schedule for all delinquent charges. SB 998 also requires the public water systems to give the residential customer 60 days before the water can be shutoff. Additionally, SB 998 requires that the tenant be informed by the water system before the water is shut off and creates a process where the tenant can take over paying the bill, to the satisfaction of the water system, when the landlord has not paid the bill.

Reconnection fees. A reconnection fee for water service is the amount the public water system charges the customer for having to manually turn the water back on. According to a recent survey by the SWRCB of 30 water agencies, the reconnection fee for some of those agencies is less than $50; therefore, SB 998 picked an amount ($50) that is comparable to the reconnection fee of water agencies surveyed by the SWRCB.

Need for more data. The data on discontinuation of service due to nonpayment for publicly owned water utilities and mutual water companies is difficult to assess. The author has provided some information concerning only a handful of publicly owned utilities, of the 3,000 plus water service providers this bill would affect. Of those utilities numbers that were shared, the majority have relatively low percentages of disconnections. As such, it is difficult to assess how widespread and severe the issue of discontinuation of service due to nonpayment is to ratepayers across California that would merit the changes proposed in this bill. In the case of CPUC-regulated investor-owned water utilities, the CPUC is able to require data reporting of these utilities. The numbers shared with the Senate Committee on Energy, Utilities and Communications do not suggest there is a widespread and severe issue across all utilities. Furthermore, the evidence suggests the discontinuation of service is less of an issue for low-income households. However, there is merit to the author’s proposal to enhance transparency regarding discontinuation of service due to nonpayment for all water utilities in order to better assess whether changes to the existing processes are needed, including those proposed in this bill.

Related/Prior Legislation

SB 623 (Monning, 2017) would establish the Safe and Affordable Drinking Water Fund, to be administered by the SWRCB, for the purpose of securing access to safe drinking water for all Californians. SB 623 is currently in Assembly Committee on Rules.

SB 598 (Hueso, Chapter 362, Statutes of 2017) required the CPUC to adopt rules, policies and regulations with the goal of reducing the statewide level of gas and electric utility service disconnections for nonpayment by residential customers and extends special considerations to residential customers who have specified medical conditions or who have a member of the household with those conditions.

AB 401 (Dodd, Chapter 662, Statutes of 2015) required the SWRCB, in collaboration with the State Board of Equalization and stakeholders, to develop a plan for the funding and implementation of a new program to provide water rate relief for low-income ratepayers by January 1, 2018 and provide a corresponding report to the Legislature by February 1, 2018.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Committee on Appropriations, state costs are minor and absorbable.

SUPPORT: (Verified 8/28/18)

American Civil Liberties Union of California Center for Advocacy

Audubon California

California Rural Legal Assistance Foundation

California State Association of Counties

Clean Water Action-California

Community Water Center

East Bay Municipal Utility District

Food & Water Watch

Golden State Manufactured-home Owners League

Leadership Counsel for Justice & Accountability

League of Women Voters of California

Lutheran Office of Public Policy-California

Pacific Institute

Public Health Advocates

Rural County Representatives of California

Sierra Club California

The Environmental Justice Coalition for Water

Western Center on Law and Poverty

OPPOSITION: (Verified 8/28/18)

American Water Works Association, California-Nevada Section

Association of California Water Agencies

California Association of Mutual Water Companies

California Municipal Utilities Association

California Special Districts Association

California Water Services

Camrosa Water District

Carlsbad Municipal Water District

Central Basin Water Association

City of Dinuba

City of Hesperia

City of Lakewood

City of Livermore

City of Merced

City of Oceanside

City of Pleasanton

City of Roseville

City of Thousand Oaks

City of Westminster

City of Whittier

East Orange County Water District

Eastern Municipal Water District

Elsinore Valley Municipal Water District

Indio Water Authority

Lakeside Water District

League of California Cities

Long Beach Water Department

Malaga County Water District

Mesa Water District

Modesto Irrigation District

Olivenhain Municipal Water District

Otay Water District

Regional Water Authority

San Diego County Water Authority

San Gabriel Valley Water Association

Santa Clarita Valley Water Agency

Southeast Water Coalition

Twentynine Palms Water District

Valley Center Municipal Water District

ARGUMENTS IN SUPPORT: According to the author:

“The cost of water in California is rising at an alarming rate. Statewide, the cost has risen over 66 percent between 2007 and 2015. In Los Angeles the cost has risen 71 percent between 2010 and 2017, and during that same period the cost of water for San Franciscans has risen as much as 127 percent.

Since water is a necessity for life, many low-income ratepayers face troubling tradeoffs in order to pay water bills. Establishing a statewide structure for helping low income ratepayers cope with increasing water rates will reduce difficult tradeoffs families will have to make and improve overall health and safety for many communities and households.”

ARGUMENTS IN OPPOSITION: Many of those opposed to this bill believe the problem of discontinuation of service due to nonpayment is significantly overstated by the proponents for this bill. They also argue that current procedures are sufficient to address discontinuation of service due to nonpayment and does not merit the changes proposed by this bill.

ASSEMBLY FLOOR: 44-26, 8/28/18

AYES: Aguiar-Curry, Arambula, Berman, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Chau, Chiu, Chu, Eggman, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez Fletcher, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Levine, Limón, Low, Maienschein, McCarty, Mullin, Muratsuchi, Nazarian, Quirk, Reyes, Rivas, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon

NOES: Acosta, Travis Allen, Baker, Bigelow, Brough, Cervantes, Chávez, Chen, Choi, Cooley, Cunningham, Dahle, Flora, Gray, Harper, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, O'Donnell, Patterson, Steinorth, Voepel, Waldron

NO VOTE RECORDED: Cooper, Daly, Fong, Gallagher, Eduardo Garcia, Kamlager-Dove, Medina, Quirk-Silva, Rodriguez, Rubio

Prepared by:

8/28/18 22:22:35

**** END ****

SENATE THIRD READING

STR Bill Id:SB 998

Author:(Dodd)

As Amended Ver:August 6, 2018

Majority vote

SENATE VOTE: 25-10

SUMMARY: Requires all public water systems (with more than 200 connections) to have a written policy on discontinuation of residential water service, provide that policy in multiple languages, include provisions for not shutting off water for certain customers that meet specified criteria, prohibit the shutoff of water service until the bill has been delinquent for 60 days, and caps the reconnection fees for restoring water service.

FISCAL EFFECT: According to the Assembly Appropriations Committee, enactment of this bill would have minor and absorbable state costs.

COMMENTS:

Federal Safe Drinking Water Act (SDWA): The federal SDWA was enacted in 1974 to protect public health by regulating drinking water. California has enacted its own Safe Drinking Water Act to implement the federal law and establish state standards under the state SDWA. The United States Environmental Protection Agency (US EPA) enforces the federal SDWA at the national level. Most states, including California, have been granted "primacy" by the US EPA, giving them the authority to implement and enforce the federal SDWA at the state level.

California’s drinking water program: Senate Bill 861 (Committee on Budget and Fiscal Review, Chapter 35, Statutes of 2014) transferred the drinking water program from the California Department of Public Health (CDPH) to the State Water Resources Control Board (State Water Board) effective July 1, 2014, creating the new Division of Drinking Water within the State Water Board and made other statutory changes to create efficiencies and adoption and administration of the drinking water program.

The State Water Board directly enforces the federal SDWA for all water systems (those with 200 or more service connections), including those water systems regulated under the California Public Utilities Commission (CPUC), Division of Corporations (DOC), or Department of Housing and Community Development (DHCD). For small water systems (those with less than 200 connections), local health departments can be delegated to have regulatory authority as the local primacy agency. Along with the regulation of drinking water, the State Water Board and the Regional Water Quality Control Boards (Regional Water Boards) are responsible for protecting the waters of the state, including drinking water sources, both surface water and groundwater supplies.

According to the State Drinking Water Plan for California, June 2015, "Over the last two decades, water costs have, on average, increased about 45% within all size groups of water systems (range of 42 to 47%). Average water costs remain highest in the San Francisco Bay Area, Central Coast, and Southern California, and lowest in the Central Valley/Agricultural (including Imperial County), Foothill, and Mountain/Desert regions. On average, customers of small water systems (serving less than 200 service connections) pay approximately 20% more for water than those customers served by larger systems. Many disadvantaged communities are served by small water systems. As a result, water affordability has become a significant issue among residents in these communities."

State agencies involved in the regulation of public water systems: The regulation of water supply, water quality, and the various types of water systems that serve drinking water is shared among several agencies, including local agencies, in California. The State Water Board has primary responsibility for regulating all public water systems. There are three other state agencies that also regulate certain aspects of specific classes of water systems including: (1) the CPUC which regulates investor-owned systems, (2) the DOC for mutual water companies, and (3) the DHCD for regulation of mobile home parks.

What is a public water system? A public water system is defined as a system that provides water for human consumption to 15 or more connections or regularly serves 25 or more people daily for at least 60 days out of the year. Many people think of public water systems as large city or regional water suppliers, but they also include small housing communities, businesses, and even schools and restaurants that provide water. A public water system is not necessarily a public entity, and most public water systems are privately owned. Being a public water system means providing affordable, safe drinking water to customers 24 hours a day, seven days a week, 365 day a year. This includes the associated legal, fiscal, and operational responsibilities, and future planning. Public water systems typically are run more efficiently when costs can be spread out over a large group of people to obtain good economies of scale. Small public water systems without a very high level of managerial, technical, and financial capacity tend to be unsustainable.

Human right to water: In 2012, California became the first state to enact a Human Right to Water law, AB 685 ((Eng) Chapter 524, Statutes of 2012). Public policy continues to be focused on the right of every human being to have safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitation. Water supply, contaminants, costs of treatment and distribution systems, the number and nature of small public water systems, especially in disadvantaged communities, and many other factors will continue to challenge progress in addressing the Human Right to Water.

Policy question: Should the state create a statewide standard for when a public water system can shut off water to a customer or should it be left to each of the thousands of public water systems in the state to enact their own policy?

Discussion of bill: This bill proposes to require all public water systems (with more than 200 connections) to have a written policy on discontinuation of residential water service, provide that policy in multiple languages; and, include provisions for not shutting off water for those customers that can demonstrate that losing water service will be life threatening, that the customer is unable to pay during the water system's normal billing cycle; and, the customer is willing to enter into a payment schedule for all delinquent charges.

There are thousands of public water systems in the state and currently each one has its own policy on how and when they will shut off water to a residential customer. Statewide data is not available on the number of customers that had their water shut off by a public water system. However, according to information supplied by the author's office, in 2015, 3,953 customers of Los Angeles Department of Water and Power had water service interruptions due to unpaid bills and there were more than 5,150 shutoffs in 2016. In San Diego, 6,000 households face the loss of water service due to delinquent bills each year. Given these numbers, it is difficult to ascertain the full scope of the problem. However, according to the author, the goal is to provide protections to the most vulnerable people in our state-those on low incomes dealing with rising water bills and facing serious health issues.

This bill not only requires a public water system to have a written policy on the discontinuation of water service for residential customers, it requires the public water systems to give the residential customer 60 days before the water can be shutoff and caps the amount of the reconnection fee that can be charged to the customer at $50 during normal business hours and $150 for non-operational hours. Additionally, This bill requires that the tenant be informed by the water system before the water is shut off and creates a process where the tenant can take over paying the bill, to the satisfaction of the water system, when the landlord has not paid the bill.

Analysis Prepared by: Josh Tooker / E.S. & T.M. / (916) 319-3965 FN: 0004131

Date of Hearing: August 15, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 998

Author:(Dodd) – As Amended Ver:August 6, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires public water systems with more than 200 connections to (1) have a written policy on discontinuation of residential water service, (2) provide that policy in multiple languages, (3) include provisions for not shutting off water for certain customers meeting specified criteria, (4) prohibit the shutoff of water service until the bill has been delinquent for 60 days, and caps the reconnection fees for restoring water service. Specifically, this bill:

1) Defines "residential service" as water service to a residential connection that includes single-family residences, multifamily residences, mobilehomes, including but not limited to mobilehomes in mobilehome parks, or farmworker housing.

2) Defines "urban and community water system" as a public water system that supplies water to more than 200 service connections.

3) Requires an urban and community water system to have a written policy on discontinuation of residential service for nonpayment available in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by at least 10% of the people residing in its service area.

4) Prohibits an urban and community water system from discontinuing residential service for nonpayment until payment by a customer has been delinquent for at least 60 days.

5) Authorizes the State Water Resources Control Board (State Water Board) to enforce the requirements on urban and community water systems for discontinuing residential water service.

9) Prohibits an urban and community water system from discontinuing residential service for nonpayment under specified conditions.

10) Requires an urban and community water system that discontinues residential service for nonpayment to provide the customer with information on how to restore residential service.

11) Requires an urban and community water system, for residential customers who demonstrate household income below 200% of the federal poverty line, to do the following:

1. Set a reconnection of service fee for reconnection during normal operating hours at $50, and $150 during nonoperational hours, but not to exceed the actual costs if it is less. Reconnection fees hall be subject to an annual adjustment, as specified.
2. Waive interest charges on delinquent bills once every 12 months.

12) Authorizes an urban and community water system to set a reconnection of service fee at $50, but not to exceed the actual cost of reconnection if it is less for residential customers that do not meet the criteria for having reconnection fees waived.

13) Requires an urban and community water system to make every good-faith effort to inform the residential occupants, by means of written notice, when the residential occupant is the tenant and the owner of the property's account is in arrears and service is going to be terminated.

14) Requires an urban and community water system to make service available to a residential occupant who is the tenant of a property whose account is in arrears, if the residential occupant is willing and able to assume responsibility for charges to the account, as specified.

15) Requires an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on its internet website and to the State Water Board. Requires the State Water Board to post this information on its internet website.

16) Authorizes the attorney general, at the request of the State Water Board or upon his or her own motion, and the CPUC to bring an action in state court to restrain by temporary or permanent injunction the provisions of this bill.

17) States that the provisions of the bill do not apply to the termination of a service connection by an urban and community water system due to an unauthorized action of a customer.

FISCAL EFFECT:

State costs are minor and absorbable.

COMMENTS:

1. Purpose. This bill seeks to create a statewide policy for the shut-off of water service due to a customer’s delinquency in paying their bill.
2. Background. Statewide data is not available on the number of customers that have had their water shut off by a public water system. However, according to information supplied by the author's office, in 2015, 3,953 customers of the Los Angeles Department of Water and Power (LADWP) had water service interruptions due to unpaid bills and there were more than 5,150 shutoffs in 2016. The author contents that in San Diego, 6,000 households face the loss of water service due to delinquent bills each year. It is unknown how much of a statewide problem with disconnection exists.
3. Arguments in Support. According to organizations in support of the bill, which include, Clean Water Action, the Rural County Representatives of California, and the Western Center on Law and Poverty:

SB 998 begins to address the larger issue of affordability and its impact on access to water. While we agree that everyone should pay their bills in full and on time, the fact is that for some people, at certain points in their life, this becomes difficult, if not impossible. SB 998 is intended to provide transparency for the shutoff process and provide protection to vulnerable households.

1. Arguments in Opposition. According to organizations in opposition to the bill including the Association of California Water Agencies, the California Municipal Utilities Association and the League of California Cities:

We are writing to express opposition to SB 998, by Senator Bill Dodd (D-Napa), which would completely change the practice of public water agencies who currently undertake multiple protocols to ensure that water service is discontinued for non-payment only when a customer fails to follow-through with safeguards that build into the operations and management of water systems. Our water agencies deliver safe, reliable, high-quality and affordable water to customers in a dependable and responsible manner. This new one-size-fits-all statewide program would be created instead, that would among other things prevent service shut-offs for at least 60 days for delinquent customers, create a cap on reconnection fees that may or may not cover the actual cost of these physical reconnections and trigger Prop. 218 concerns for public water agencies, and expand authority to both the State Water Board and the Attorney General to enforce provisions of the bill. Water agencies are in the business of delivering water – they don't disconnect delinquent customers without prior substantial engagement.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: June 26, 2018

ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS

Bill Quirk, Chair

SBPCA Bill Id:SB 998

Author:(Dodd) – As Amended Ver:June 14, 2018

SENATE VOTE: 25-10

SUBJECT: Discontinuation of residential water service: urban and community water systems

SUMMARY: Requires all public water systems (with more than 200 connections) to have a written policy on discontinuation of residential water service, provide that policy in multiple languages, include provisions for not shutting off water for certain customers that meet specified criteria, prohibit the shutoff of water service until the bill has been delinquent for 60 days, and caps the reconnection fees for restoring water service. Specifically, this bill:

1) Defines "residential service" as water service to a residential connection that includes individually metered single-family residences, individually metered and master-metered multifamily residences, master-metered mobilehome parks, individually metered mobilehomes in mobilehome parks, or farmworker housing.

2) Defines "urban and community water system" as a public water system that supplies water to more than 200 service connections.

3) Requires an urban and community water system to have a written policy on discontinuation of residential service for nonpayment available in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by at least 10 percent of the people residing in its service area.

4) Prohibits an urban and community water system from discontinuing residential service for nonpayment until payment by a customer has been delinquent for at least 60 days.

5) Provides that requirements for discontinuation of residential service apply to an urban water supplier not regulated by the California Public Utilities Commission (CPUC) on and after February 1, 2020.

6) Provides that requirements for discontinuation of residential service apply to an urban and community water system regulated by the CPUC on and after February 1, 2020.

7) Provides that the requirements for discontinuation of residential service apply to urban and community water systems not regulated by the CPUC on and after April 1, 2020.

8) Authorizes the State Water Resources Control Board (State Water Board) to enforce the requirements on urban and community water systems for discontinuing residential water service.

9) Prohibits an urban and community water system from discontinuing residential service for nonpayment if all of the following conditions are met: the customer, or tenant of a customer, submits to the urban and community water system the certification of a primary care provider that discontinuation of residential service will be life threatening to, or pose a serious threat to, the health and safety of a resident of the premises where residential service is provided; the customer demonstrates that he or she is financially unable to pay for residential service within the urban and community water system's normal billing cycle; and, the customer is willing to enter into an amortization agreement, alternative payment schedule, or plan for deferred or reduced payment with respect to all delinquent charges.

10) Requires an urban and community water system that discontinues residential service for nonpayment to provide the customer with information on how to restore residential service and petition for a waiver of reconnection fees.

11) Requires an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills once every 12 months for a residential customer who demonstrates that they have income below 200 percent of the federal poverty line.

12) Authorizes an urban and community water system to set a reconnection of service fee at fifty dollars ($50), but not to exceed the actual cost of reconnection if it is less for residential customers that do not meet the criteria for having reconnection fees waived.

13) Requires an urban and community water system to make every good faith effort to inform the residential occupants, by means of written notice, of a single-family dwelling, multiunit residential structure, mobilehome park or permanent resident structure in a labor camp, when the residential occupant is the tenant and the owner of the property's account is in arrears and service is going to be terminated.

14) Requires an urban and community water system to make service available to residential occupants who are the tenant of a property whose account is in arrears, if the residential occupant is willing and able to assume responsibility for charges to the account to the satisfaction of the urban and community water system.

15) Requires an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on the urban and community water system's Internet Web site and to the State Water Board. Requires the State Water Board to post this information on its Internet Web site.

16) Authorizes the Attorney General, at the request of the State Water Board or upon his or her own motion, to bring an action in state court to restrain by temporary or permanent injunction the provisions of this bill.

17) Requires all written notices required under the bill to be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the urban and community water system's service area.

18) States that the provisions of the bill do not apply to the termination of a service connection by an urban and community water system due to an unauthorized action of a customer.

EXISTING LAW:

1. Vests the State Water Board with all of the authority, duties, powers, purposes, functions, responsibilities, and jurisdiction of the State Department of Public Health (CDPH) and its predecessor to enforce the State Drinking Water Act (SDWA). (Health and Safety Code (HSC) § 116271)
2. Requires any person who owns a public water system to ensure that the system does all of the following:
3. Complies with primary and secondary drinking water standards;
4. Will not be subject to backflow under normal operating conditions;
5. Provides a reliable and adequate supply of pure, wholesome, healthful, and potable water;
6. Employs or utilizes only water treatment operators or water treatment operators-in-training that have been certified by the State Water Board at the appropriate grade; and,
7. Complies with the operator certification program. (HSC § 116555 (a))
8. Defines a "public water system" as a system for the provision of water for human consumption through pipes or other constructed conveyances that has 15 or more service connections or regularly serves at least 25 individuals daily at least 60 days out of the year. (HSC § 116275)

4) Defines "Community water system" as a public water system that serves at least 15 service connections used by yearlong residents or regularly serves at least 25 yearlong residents of the area served by the system. (HSC § 116275(i))

5) Defines "Service connection" as the point of connection between the customer’s piping or constructed conveyance, and the water system’s meter, service pipe, or constructed conveyance. (HSC § 116275(s))

6) Defines "Resident" as a person who physically occupies, whether by ownership, rental, lease, or other means, the same dwelling for at least 60 days of the year. (HSC § 116275(t))

7) Declares to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking and sanitary purposes. (Water Code § 106.3)

8) Provides that any person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into a contract, as specified, shall deliver to the other party to the contract or agreement and prior to the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, that includes a translation of every term and condition in that contract or agreement. (Civil Code § 1632)

9) Defines a "water corporation" to include every corporation or person owning, controlling, operating, or managing any water system for compensation within this State. (Public Utilities Code (PUC) § 241)

10) Defines a "public utility" to include every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, where the service is performed for, or the commodity is delivered to, the public. (PUC § 216 (a))

11) Provides that when any public utility performs a service for, or delivers a commodity to, the public for which any compensation or payment is received, it is subject to the jurisdiction, control, and regulation of the CPUC. (PUC § 216(b))

FISCAL EFFECT: Unknown.

COMMENTS:

Need for the bill: According to the author,

"California has more than 3,000 city, county, mutual and private agencies delivering water to homes and apartments. While there are consistent lifeline programs for people having difficulty paying their electric, gas and telephone bills, there is nothing more than a local patchwork set of policies addressing long-term water bill delinquencies. Further, Prop 218 restrictions limit the ability of all water agencies to offer subsidies and rebates to low-income customers unable to pay for basic water needs.

The cost of water in California is rising at an alarming rate. Statewide, water rates have risen over 66% between 2007 and 2015. Rising water rates for low income ratepayers is resulting in higher delinquency rates on paying water bills, which, in turn, leads to an increasing number of water service discontinuations. In 2015, 3,953 customers of the Los Angeles Department of Water and Power (LADWP) had water service interruptions due to unpaid bills. The number of discontinuations increased to over 5150 shutoffs in 2016, an increase of 29%. In San Diego 6,000 households face the loss of water service due to delinquent bills each year. Loss of water service can have dire health and safety consequences for residents, lead to a loss of residence, and create strains among residents within a household. When a tenant is faced with a shutoff, and the tenant relies on the landlord to pay for water service, rectifying the problem becomes complicated for the tenant.

Since water is a necessity for life, and since California has declared that access to safe and affordable water is a human right, many low-income ratepayers face troubling tradeoffs in order to pay water bills. Establishing a statewide structure for helping low income ratepayers cope with increasing water rates will reduce difficult tradeoffs families will have to make and improve overall health and safety for many communities and households."

Federal Safe Drinking Water Act (SDWA): The federal SDWA was enacted in 1974 to protect public health by regulating drinking water. California has enacted its own safe drinking water act to implement the federal law and establish state standards under the state SDWA. The United States Environmental Protection Agency (US EPA) enforces the federal SDWA at the national level. Most states, including California, have been granted "primacy" by the US EPA, giving them the authority to implement and enforce the federal SDWA at the state level. In accordance with the federal SDWA, the US EPA provides funds to states for their drinking water loan programs, conducts an annual oversight review of each state’s program, and issues an annual program evaluation report.

California’s drinking water program: Senate Bill 861 (Committee on Budget and Fiscal Review, Chapter 35, Statutes of 2014) transferred the drinking water program from CDPH to the State Water Board effective July 1, 2014, creating the new Division of Drinking Water within the State Water Board and made other statutory changes to create efficiencies and adoption and administration of the drinking water program.

The State Water Board directly enforces the federal SDWA for all large water systems (those with 200 or more service connections), including those water systems regulated under the California Public Utilities Commission (CPUC), Division of Corporations (DOC), or Department of Housing and Community Development (DHCD). For small water systems (those with less than 200 connections), local health departments can be delegated to have regulatory authority as the local primacy agency. Along with the regulation of drinking water, the State Water Board and the Regional Water Quality Control Boards (Regional Water Boards) are responsible for protecting the waters of the state, including drinking water sources, both surface water and groundwater supplies.

The State Water Board has adopted regulations for drinking water standards, monitoring requirements, cross-connections, design and operational standards, and operator certification. The implementation of the drinking water program involves: (1) establishment of drinking water standards, (2) certification of operators and point-of-use treatment devices, and (3) direct regulation of public water systems with the authority to delegate oversight responsibility of small water systems to local county health departments. The regulation of public water systems includes: (1) issuance of permits covering the approval of water system design and operation procedures, (2) inspection of water systems, (3) the enforcement of laws and regulations to assure that all public water systems routinely monitor water quality and meet current standards, and (4) assuring notification is provided to consumers when standards are not being met.

According to the State Drinking Water Plan for California, June 2015, "Over the last two decades, water costs have, on average, increased about 45 percent within all size groups of water systems (range of 42 to 47 percent). Average water costs remain highest in the San Francisco Bay Area, Central Coast, and Southern California, and lowest in the Central Valley/Agricultural (including Imperial County), Foothill, and Mountain/Desert regions. On average, customers of small water systems (serving less than 200 service connections) pay approximately 20 percent more for water than those customers served by larger systems. Many disadvantaged communities are served by small water systems. As a result, water affordability has become a significant issue among residents in these communities."

States agencies involved in the regulation of public water systems: The regulation of water supply, water quality, and the various types of water systems that serve drinking water is shared among several agencies, including local agencies, in California. The State Water Board has primary responsibility for regulating all public water systems. There are three other state agencies that also regulate certain aspects of specific classes of water systems including: (1) the California Public Utilities Commission (CPUC) for investor-owned systems, (2) the Division of Corporations (DOC) for mutual water companies, and (3) the Department of Housing and Community Development (DHCD) for mobile home parks.

California Public Utilities Commission (CPUC) role in water system regulation: The CPUC regulates investor-owned water utilities with particular attention to rates and quality of service. These utilities are owned by investors expecting a return on investments. Small utilities are generally owned by a single individual, corporation, or a partnership. Owners of large utilities are generally investors holding financial interest in the utility or its parent company. There are several large investor-owned utilities in California that own and operate multiple water systems across a region or across the state. The CPUC ensures that customers of regulated water utilities receive safe and reliable water service while allowing the utility a fair opportunity to earn a reasonable return on its investment.

Division of Corporations (DOC) role in regulating water systems: The DOC within the Department of Business Oversight has responsibility under the Corporate Securities Law of 1968 to approve and register the security offering of mutual water companies. Mutual water companies are privately owned water companies in which each lot owner is entitled to one share per lot that they own. They are managed and operated in accordance with Articles of Incorporation and bylaws approved by the DOC and filed with the Secretary of State. Existing regulations set forth the standards governing the regulation of mutual water companies. These regulations do not deal with the quality of the drinking water served.

Department of Housing and Community Development (DHCD) role in regulating water systems: DHCD is responsible for the regulation of the construction and maintenance of mobile home parks (MHPs) and employee housing facilities, such as labor camps, many of which have independent water systems.

What is a public water system? A public water system is defined as a system that provides water for human consumption to 15 or more connections or regularly serves 25 or more people daily for at least 60 days out of the year. Many people think of public water systems as large city or regional water suppliers, but they also include small housing communities, businesses, and even schools and restaurants that provide water. A public water system is not necessarily a public entity, and most public water systems are privately owned. There are three legal distinctions between the types of public water systems: community, non-transient non-community, and transient. The type of water system is based on how often people consume the water. Drinking water regulations impose the most stringent monitoring requirements on community and non-transient non-community water systems because the people they serve obtain all or much of their water from that system each day. Community water systems are city, county, regulated utilities, regional water systems, and even small water companies and districts where people live. Non-community non-transient water systems are places like schools and businesses that provide their own water. The customers of non-community non-transient water systems have a regular opportunity to consume the water, but they do not reside there. Transient water systems include entities like rural gas stations, restaurants, and State and National parks that provide their own potable water. Most people that consume the water neither reside nor regularly spend time there.

Being a public water system means providing affordable, safe drinking water to customers 24 hours a day, 7 days a week, 365 day a year. This includes the associated legal, fiscal, and operational responsibilities, and future planning. Public water systems typically are run more efficiently when costs can be spread out over a large group of people to obtain good economies of scale. Small public water systems without a very high level of managerial, technical, and financial capacity tend to be unsustainable.

Human right to water: In 2012, California became the first state to enact a Human Right to Water law, AB 685 (Eng, Chapter 524, Statutes of 2012). Public policy continues to be focused on the right of every human being to have safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitation. Water supply, contaminants, costs of treatment and distribution systems, the number and nature of small public water systems, especially in disadvantaged communities, and many other factors will continue to challenge progress in addressing the Human Right to Water.

Proposition 218: On November 5, 1996, California approved Proposition 218, the "Right to Vote on Taxes Act." Proposition 218 added articles XIIIC and XIIID to the California Constitution, and applies to local government finance law. Proposition 218 characterized all taxes [at the local level] as either special taxes or general taxes, requires a majority vote for general taxes at the same election as for members of the legislative body of the local government (except in cases of emergency), requires a 2/3 vote for special taxes, and makes all of the taxes of "special purpose" districts (including school districts) special taxes. It also requires existing, new, or increased assessments to comply with Proposition 218 beginning July 1, 1997.

The author of this bill obtained an opinion from the Legislative Counsel, which reviewed whether SB 998 violated Proposition 218 and the opinion concludes, "It is our opinion that proposed Health and Safety Code section 116908 in Senate Bill No. 998 (2017-2018 Reg. Sess.) as amended May 7, 2018, would not violate California Constitution, article XIIID, section 6, subdivision (b)(3)."

Policy question before the committee: Should the state create a statewide standard for when a public water system can shut off water to a customer or should it be left to each of the thousands of public water systems in the state to enact their own policy?

Discussion of bill: SB 998 proposes to require all public water systems (with more than 200 connections) to have a written policy on discontinuation of residential water service, provide that policy in multiple languages, and include provisions for not shutting off water for those customers that can demonstrate that losing water service will be life threatening; the customer is unable to pay during the water system's normal billing cycle; and the customer is willing to enter into a payment schedule for all delinquent charges.

There are thousands of public water systems in the state and currently each one has its own policy on how and when they will shut off water to a residential customer. Statewide data is not available on the number of customers that had their water shut off by a public water system. However, according to information supplied by the author's office, in 2015, 3,953 customers of LADWP had water service interruptions due to unpaid bills and there were more than 5,150 shutoffs in 2016. In San Diego, 6,000 households face the loss of water service due to delinquent bills each year. Given these numbers, it is difficult to ascertain the full scope of the problem; however, according to the author, the goal is to provide protections to the most vulnerable people in our state, those on low incomes dealing with rising water bills and facing serious health issues.

SB 998 not only requires a public water system to have a written policy on the discontinuation of water service for residential customers, it requires the public water systems to give the residential customer 60 days before the water can be shutoff and caps the amount of the reconnection fee that can be charged to the customer at $50 during normal business hours and $150 for non-operational hours. It waives the reconnection fee for those customers that can demonstrate they have a household income below 200 percent of the federal poverty line. Additionally, SB 998 requires that the tenant be informed by the water system before the water is shut off and creates a process where the tenant can take over paying the bill, to the satisfaction of the water system, when the landlord has not paid the bill.

Reconnection fees: A reconnection fee for water service is the amount the public water system charges the customer for having to manually turn the water back on. According to a recent survey by the State Water Board of 30 water agencies, the reconnection fee for some of those agencies is less than $50; therefore, SB 998 picked an amount ($50) that is comparable to the reconnection fee of water agencies surveyed by the State Water Board.

What if water agencies are already required to have a policy for discontinuance and restoration of water service? SB 998 contains a provision that states that if there are provisions of existing law that are duplicated by this bill then compliance with one is deemed compliance with the other. The public water systems regulated under the CPUC are required, under Rule No. 11, to have a discontinuance and restoration of service policy. In reviewing Rule No. 11, the requirements are very similar to SB 998 and it is very possible that those water systems may be in compliance with SB 998 if they are in compliance with Rule No. 11.

Arguments in support: According to organizations in support of the bill which include, Clean Water Action, the Rural County Representatives of California, and the Western Center on Law and Poverty, they state: "In 2012, the Legislature adopted the Human Right to Water, which established a vision for the state that the Legislature, advocates and the Administration continue to work to fulfill. The Human Right to Water states that access to a reliable source of safe and affordable water is a right and not a privilege. SB 998 begins to address the larger issue of affordability and its impact on access to water. While we agree that everyone should pay their bills in full and on time, the fact is that for some people, at certain points in their life, this becomes difficult, if not impossible. SB 998 is intended to provide transparency for the shutoff process and provide protection to vulnerable households."

Arguments in opposition: According to organizations in opposition to the bill including the Association of California Water Agencies, the California Municipal Utilities Association and the League of California Cities, they state, "We are writing to express opposition to SB 998, by Senator Bill Dodd (D-Napa), which would completely change the practice of public water agencies who currently undertake multiple protocols to ensure that water service is discontinued for non-payment only when a customer fails to follow-through with safeguards that build into the operations and management of water systems. Our water agencies deliver safe, reliable, high-quality and affordable water to customers in a dependable and responsible manner. This new one-size-fits-all statewide program would be created instead, that would among other things prevent service shut-offs for at least 60 days for delinquent customers, create a cap on reconnection fees that may or may not cover the actual cost of these physical reconnections and trigger Prop. 218 concerns for public water agencies, and expand authority to both the State Water Board and the Attorney General to enforce provisions of the bill. Water agencies are in the business of delivering water – they don't disconnect delinquent customers without prior substantial engagement."

REGISTERED SUPPORT / OPPOSITION:

Support

American Civil Liberties Union of California Center for Advocacy and Policy

Audubon California

California Rural Legal Assistance Foundation

California State Association of Counties

Clean Water Action

Community Water Center

Food & Water Watch

Leadership Counsel for Justice & Accountability

League of Women Voters of California

Pacific Institute

Rural County Representatives of California

Sierra Club California

Western Center on Law and Poverty

Opposition

American Water Works Association California-Nevada Section

Association of California Water Agencies

California Association of Mutual Water Companies

California Municipal Utilities Association

California Special Districts Association

California Water Association

Camrosa Water District

Central Basin Water Association

City of Dinuba

City of Lakewood

City of Livermore

City of Palo Alto

City of Riverside

City of Roseville

City of Thousand Oaks

East Orange County Water District

Eastern Municipal Water District

Elsinore Valley Municipal Water Districts

Irvine Ranch Water District

League of California Cities

Long Beach Water Department

Mesa Water District

Mission Springs Water District

Modesto Irrigation District

Municipal Water District of Orange County

Olivenhain Municipal Water District

Regional Water Authority

San Gabriel Valley Water Association

San Diego County Water Authority

Santa Clarita Valley Water Agency

Southwest Water Coalition

Truckee Donner Public Utility District

Twentynine Palms Water District

Valley Center Municipal Water District

Analysis Prepared by: Josh Tooker / E.S. & T.M. /

 THIRD READING  

Bill No: SB 998

Author:

:

Vote:

SENATE ENERGY, U. & C. COMMITTEE: 8-1, 4/3/18

AYES: Hueso, Bradford, Hertzberg, Hill, McGuire, Skinner, Stern, Wiener

NOES: Morrell

NO VOTE RECORDED: Cannella, Vidak

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 4/18/18

AYES: Wieckowski, Gaines, Hill, Lara, Skinner, Stern

NO VOTE RECORDED: Stone

SENATE JUDICIARY COMMITTEE: 4-2, 4/24/18

AYES: Jackson, Hertzberg, Monning, Wieckowski

NOES: Moorlach, Anderson

NO VOTE RECORDED: Stern

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT:

SOURCE: Author

DIGEST:

This bill specifies under what circumstances a water service provider can discontinue service due to nonpayment of a residential customer. This bill includes a number of provisions that apply to all water service providers with more than 200 service connections, expands the authority of the State Water Resources Control Board to address service access issues, and provides the Attorney General with authority to enforce the provisions, including through temporary injunction.

ANALYSIS:

Existing law:

1. Provides that the California Public Utilities Commission (CPUC) has regulatory authority over public utilities, including water corporations. Establishes “public utility” includes every water corporation and sewer system corporation where the service is performed for, or the commodity delivered to, the public or any portion thereof. (California Constitution Article XII and Public Utilities Code §2701)
2. Requires specified notice to be given to a customer and requirements satisfied before a water corporation furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed. (Public Utilities Code §779 et seq.)
3. Requires specified notice to be given to a customer before a public utility district, municipal utility district, or a municipally owned or operated public utility furnishing water may terminate residential service for nonpayment of a delinquent account, as prescribed. (Public Utilities Code §10009 et seq.)

This bill:

1. Requires an urban and community water system to have a written policy on discontinuation of residential service for nonpayment, with specified information, available in English and other languages, as specified. Requires the policy to be available on the urban and community water system’s Internet Web site, or made available in writing to customers, if no Web site exists. Authorizes the State Water Resources Control Board (SWRCB) to enforce the requirements of this section.
2. Prohibits an urban and community water system from discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days. Requires specified actions before discontinuing residential service, including contacting the customer and providing alternative payment schedules.
3. Prohibits an urban and community water system from discontinuing residential service for nonpayment if the customer meets specified conditions, including: (1) submits certification of a licensed medical professional discontinuation of residential service will be life threatening or pose a serious threat to health and safety, (2) the customer demonstrates their financial inability to pay for service within the normal payment period (as specified), and (3) a willingness to enter into an amortization agreement, alternative payment or reduced payment. Requires the water system to offer the customer who meets the above conditions to offer specified alternative payment options (as specified), which may result in repayment of any remaining outstanding balance within 12 months.
4. Requires an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges on delinquent bills for residential customers who demonstrate their household income is below 200 percent of the federal poverty line.
5. Requires an urban and community water system to establish reconnection fees at 50 dollars or less, with an annual adjustment for changes in the Consumer Price Index (CPI) beginning in 2021, for residential customers that do not demonstrate their household income is below 200 percent of the federal poverty line and a reconnection of service fee during nonoperational hours of 150 dollars or less, with adjustments for CPI, for all residential customers.
6. Requires an urban and community water system that furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner, manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort to inform the residential occupants by written notice that service will be terminated and that the residential occupants have the right to become customers, as specified.
7. Requires the urban and community water system to report the number of annual discontinuations of residential service for inability to pay on the water system’s Web site and to the SWRCB. Requires the SWRCB to post the information on its Web site.
8. Authorizes the Attorney General to bring an action in state court to restrain by temporary or permanent injunction the use of any method, act, or practice declared to be unlawful by this bill.
9. Provides that the provisions of the bill are in addition to the provisions in existing law duplicative of the bill and that where the provisions are inconsistent, the provisions described in the bill apply.

Background

CPUC-regulated water utilities. The CPUC has jurisdiction over water companies that provide water service to about 16 percent of California’s residents with annual water and wastewater revenues totaling $1.4 billion. Approximately 95 percent of those residents are served by nine large water utilities each serving more than 10,000 connections. Combined, the nine largest utilities serve approximately 1.175 million customers. However, the majority of the CPUC-regulated water utilities (92) have service connections of 2,000 or less, and 87 of those have service connections of 500 or less. The CPUC has authorized the largest nine water utilities to offer low-income rate assistance programs similar in concept to those provided to electricity customers through California Alternative Rates for Energy (CARE). However, each program is varied in terms of the amount of the assistance provided to low-income customers and the collection of the surcharge from non-participating ratepayers to cover the cost of the program. Additionally, statute and CPUC rules govern issues regarding discontinuation of service due to nonpayment by these water utilities. Specifically, the CPUC has adopted the following tariff rules: Rule 8 (Notices), Rule 9 (Payment of Bills), Rule 10 (Disputed Bills), and Rule 11 (Discontinuance and Restoration of Service) that relate to the issue of discontinuation of service due to nonpayment.

Publicly owned water utilities. The majority of California’s water customers are served by cities, water districts, and mutual water companies, which are governed by local boards. These utilities are not regulated by the CPUC. As established by Proposition 218 (1996), the majority of these utilities are subject to state constitutional and statutory requirements that ensure water rates are restricted to cost of service. As a result, these entities have limitations, not imposed on the CPUC-regulated utilities, that hinder their ability to increase rates to fund low-income programs for their customers. Additionally, Public Utilities Code requires specified processes for discontinuation of service for customers due to nonpayment which are similar though not as robust as those required for CPUC-regulated utilities.

State Water Resources Control Board (SWRCB). SWRCB has general authority with regard to water quality and drinking water functions of the state government. Under the California Safe Drinking Water Act (Chapter 4 (commencing with Section 116270) of Part 12 of Division 104 of the Health and Safety Code), SWRCB administers provisions relating to public water systems and regulates drinking water to protect public health, including, among other things, adopting primary drinking water standards and maximum contaminant levels for contaminants in drinking water and permitting public water systems.

CPUC v. SWRCB. Under existing law, the CPUC generally has authority over the regulation of services and utilities and assures that California residents have access to safe and reliable utility infrastructure and services. In comparison, the SWRCB has regulatory authority over the quality of the state’s water resources and drinking water. The SWRCB is involved with the quality of the water, especially drinking water, whereas the CPUC is involved with the supply and access to that water. As discussed above, there are investor owned water utilities that are regulated by the CPUC and publicly owned utilities that are not regulated by the CPUC but instead are subject to Proposition 218 and its implementing statutory provisions. An urban and community water system, as defined by SB 998, could fall into either of these categories, depending on the structure of that particular water system. As a bill primarily focused on procedures to be followed in the event of a discontinuation of residential service, the bill seems to mainly be about access to that water and not about water quality. As such, it is questionable whether the SWRCB should have any oversight on the CPUC-regulated utilities regarding service connections, as proposed by this bill.

Proposition 218 and water rates and reconnection fees. The Constitution defines a fee as any levy, other than an ad valorem tax, special tax, or assessment, that is imposed by a local government on a parcel or on a person as an incident of property ownership, including a user fee for a property-related service. The fee imposed on any parcel or person cannot exceed the proportional cost of the service that is attributable to the parcel. A fee imposed for residential water service by a local government, such as the water rates or reconnection fees described in this bill, would be considered a user fee for a property-related service and subject to the provisions of Proposition 218. An urban and community water system that is required to continue to provide water service to a nonpaying customer would continue to accrue costs associated with supplying that service to that customer. For the most part, the bill allows an urban and community water system to recoup its costs from providing residential service to a nonpaying customer through an amortization agreement, alternative payment schedule, or plan for deferred or reduced payment. Being required to continue to provide residential service to a nonpaying customer may become an issue if a customer later fails to comply with the amortization agreement, alternative payment schedule, or plan for deferred or reduced payment. If this were to happen, an investor owned utility would have discretion on how to absorb those costs. However, for a publicly owned utility that is subject to the limitations of Proposition 218, absorption of costs would be more complex. As a non-profit local governmental agency, the publicly owned utility may not have the means to absorb the costs of the nonpaying customer. Additionally, under the restrictions of Proposition 218, it does not have the authority to increase rates on other customers. If a publicly owned utility that is an urban and community water system were to increase its rates to cover the costs of nonpaying customers, to do so could be a violation of Proposition 218’s requirement that “the amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel.” The increased rates imposed on paying customers would not be proportional to the cost of water service received by those customers because the new increased rate would also include the cost of providing water service to nonpaying customers. And while nothing in SB 998 specifically authorizes an urban and community water system to increase the rates of other ratepayers in order to cover the costs of a nonpaying customer, there is nothing in the language that prevents an urban and community water system from doing so either.

Reconnection fees. SB 998 also requires an urban and community water system to waive the reconnection fees and offer a reduction or waiver of interest charges for customers whose household income is below 200% of the federal poverty line. SB 998 also caps the reconnection fee for all other customers at $50 or less if during normal operating hours and $150 or less if during nonoperational hours. Unlike the water rate discussion above, there are no provisions in SB 998 which would allow an urban and community water system to recoup its costs and it is unclear how an urban and community water system that is a publicly owned utility would do so. Similar to the issues discussed above regarding publicly-owned utilities, a question arises as to whether waiving reconnection fees or offering a reduction or waiver of interest charges for certain customers results in an increased reconnection fee for other customers.

Need for more data. The data on discontinuation of service due to nonpayment for publicly owned water utilities and mutual water companies is difficult to assess. The author has provided some information concerning only a handful of publicly owned utilities, of the 3,000 plus water service providers this bill would affect. Of those utilities numbers that were shared, the majority have relatively low percentages of disconnections. As such, it is difficult to assess how widespread and severe the issue of discontinuation of service due to nonpayment is to ratepayers across California that would merit the changes proposed in this bill. In the case of CPUC-regulated investor-owned water utilities, the CPUC is able to require data reporting of these utilities. The numbers shared with the Senate Committee on Energy, Utilities and Communications do not suggest there is a widespread and severe issue across all utilities. Furthermore, the evidence suggests the discontinuation of service is less of an issue for low-income households. However, there is merit to the author’s proposal to enhance transparency regarding discontinuation of service due to nonpayment for all water utilities in order to better assess whether changes to the existing processes are needed, including those proposed in this bill.

Related/Prior Legislation

SB 623 (Monning, 2017) establishes the Safe and Affordable Drinking Water Fund, to be administered by the State Water Resources Control Board, for the purpose of securing access to safe drinking water for all Californians. SB 623 is currently in Assembly Rules Committee.

SB 598 (Hueso, Chapter 362, Statutes of 2017) required the CPUC to adopt rules, policies and regulations with the goal of reducing the statewide level of gas and electric utility service disconnections for nonpayment by residential customers and extends special considerations to residential customers who have specified medical conditions or who have a member of the household with those conditions.

AB 401 (Dodd, Chapter 662, Statutes of 2015) required the SWRCB, in collaboration with the State Board of Equalization and stakeholders, to develop a plan for the funding and implementation of a new program to provide water rate relief for low-income ratepayers by January 1, 2018 and provide a corresponding report to the Legislature by February 1, 2018.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 5/23/18)

American Civil Liberties Union of California Center for Advocacy

Audubon California

California Rural Legal Assistance Foundation

California State Association of Counties

Clean Water Action-California

Community Water Center

Food & Water Watch

Leadership Counsel for Justice & Accountability

League of Women Voters of California

Lutheran Office of Public Policy-California

Pacific Institute

Public Health Advocates

Rural County Representatives of California

Sierra Club California

The Environmental Justice Coalition for Water

Western Center on Law and Poverty

OPPOSITION: (Verified 5/23/18)

Association of California Water Agencies

California Association of Mutual Water Companies

California Municipal Utilities Association

California Special Districts Association

California Water Association

California Water Services

Camrosa Water District

Central Basin Water Association

City of Lakewood

City of Livermore

City of Thousand Oaks

East Orange County Water District

League of California Cities

Regional Water Authority

San Diego County Water Authority

San Gabriel Valley Water Association

Southeast Water Coalition

Twentynine Palms Water District

Valley Center Municipal Water District

ARGUMENTS IN SUPPORT: According to the author:

“The cost of water in California is rising at an alarming rate. Statewide, the cost has risen over 66 percent between 2007 and 2015. In Los Angeles the cost has risen 71 percent between 2010 and 2017, and during that same period the cost of water for San Franciscans has risen as much as 127 percent.

Since water is a necessity for life, many low-income ratepayers face troubling tradeoffs in order to pay water bills. Establishing a statewide structure for helping low income ratepayers cope with increasing water rates will reduce difficult tradeoffs families will have to make and improve overall health and safety for many communities and households.”

ARGUMENTS IN OPPOSITION: Arguments against this bill are many, with the majority of the opponents centering their concerns on a lack of data to demonstrate there exists a widespread problem that merits the prescriptions proposed in this bill and universal concern by the opponents regarding cost shifts to paying customers, including low-income residents, who would have to pay increased bills in order to recover costs from nonpaying customers. Many of the opponents state that the existing policies to address termination of service due to nonpayment are adequate and have worked for decades with many of the privately-owned utilities stating their termination numbers are low. Many of the opposition believe this bill is overly prescriptive and requires a one-size-fits-all approach for 3,000+ water agencies of varying sizes with varying legal constraints. Furthermore, opponents raise concerns regarding the increased potential for fraud and abuse by residential customers and the impacts to water providers to absorb costs associated with the requirements of this bill.

Prepared by:

5/24/18 15:52:35

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2017-2018 Regular Session

Bill No: SB 998 (Author:Dodd)

Version: April 9, 2018

Hearing Date: April 24, 2018

Fiscal: Yes

Urgency: No

Consultant: TSG

SUBJECT

Discontinuation of residential water service: urban and community water systems

DESCRIPTION

This bill would exempt urban and community water systems, as defined, from existing procedural safeguards against residential utility shut-offs when customers fail to pay their utility bills. Simultaneously, this bill would enact a new set of procedural safeguards, applicable to urban and community water systems only, that would govern the process for residential water service shut-offs for non-payment. Specifically, these new protections would require urban and community water systems to: (1) create and make publicly available a water shutoff policy in multiple languages; (2) offer, upon request, a variety of repayment options to customers who are on the verge of having their water shut off due to nonpayment; (3) limit the reconnection fees; (4) provide written or telephonic notice, as specified, to customers who are on the verge of having their water shut off; and (5) refrain from shutting off the water to a delinquent customer with a documented, life-threatening medical condition provided that the customer agrees to pay off the outstanding balance over time. Where these new safeguards are stronger than existing protection, the bill would add safeguards against water shutoff. Where these new safeguards are weaker than existing law, the bill would remove safeguards against water shutoff.

[This analysis reflects amendments that were taken in the Senate Committee on Environmental Quality.]

BACKGROUND

Water service shutoffs can have devastating consequences. Far more than just an inconvenience, lack of access to safe water can negatively impact individual health and well-being, particularly that of the very young, the elderly, and the medically fragile. There are broader public health concerns as well, since access to water plays a role in hygiene, food safety, and sanitation. As a legal matter, water service shutoffs potentially interfere with the human right to water, which California enshrined in statute at Section 106.3 of the Water Code. (AB 685, Eng, Ch. 524, Stats. 2012.)

Existing California law already provides a number of procedural safeguards against the sudden shutoff of utility services, including water, but they are spread across various codes and vary somewhat depending on the entity that is providing the service. Sections 777, 777.1, 779.1 and 780 of the Public Utility Code deal with non-payment to water corporations. Sections 10010 to 10011.5 of the Public Utility Code address non-payment to municipal water corporations. Sections 12823 and 11824 of the Public Utility Code deal with municipal utility districts, while 60371 and 60373 of the Government Code are applicable to special governmental districts.

Although there is some variation, these existing laws generally require notice of an impending shutoff in a variety of languages; a process for disputing utility bills with a right of appeal to a higher body; prohibition on shutoff during a pending bill dispute; and prohibition on utility shutoffs if the customer’s life would be put at risk by the shutoff and the customer agrees to pay off the outstanding balance over time. These existing laws also generally create a limited ability for tenants to assume a utility service account, without having to pay the arrears, if the utility is about to be shut off because of the landlord’s delinquency in payment. Tenants in such situations are then entitled to deduct the corresponding utility payments from their rent.

This bill would exempt all urban and community water systems from all these protections and replace them, instead, with a unified set of safeguards, to be housed in the Health and Safety Code, that would apply to water service only. Specifically, these new protections would require urban and community water systems to: (1) create and make publicly available a water shutoff policy in multiple languages; (2) offer, upon request, a variety of repayment options to customers who are on the verge of having their water shut off due to nonpayment; limit the reconnection fees; (3) provide written or telephonic notice, as specified, to customers who are on the verge of having their water shut off; and (4) refrain from shutting off the water to a delinquent customer with a documented, life-threatening medical condition provided that the customer agrees to pay off the outstanding balance over time.

Where these new safeguards are stronger than existing protections, the bill would add safeguards against water shutoff. Where these new safeguards are weaker than existing law, the bill would remove safeguards against water shutoff.

This bill passed out of the Senate Environmental Quality Committee by a vote of 6-0 after passing out of the Senate Committee on Energy, Utilities and Communications Committee by a vote of 8-1.

CHANGES TO EXISTING LAW

Existing law establishes that it is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. (Wat. Code Sec. 106.3(a).)

Existing law provides that the implementation of the policy that every human being has the right to safe, clean, affordable, and accessible water shall not infringe on the rights or responsibilities of any public water system. (Wat. Code Sec. 106.3(e).)

Existing law, under Proposition 218, imposes certain constitutional restrictions and procedures on local governments before the local government can impose or increase any fee or charge upon a parcel or upon a person incident of property ownership, including a user fee or charge for a property related service. As relevant to this bill, these constitutional restrictions require revenues derived from the fee or charge not to exceed the funds required to provide the property related service and require the fee or charge imposed on any parcel or person incident of property ownership to be proportional to the cost of the service. (Cal. Const., art. XIII D, Sec. 6.)

Existing law provides the California Public Utilities Commission (CPUC) with regulatory authority over public utilities, including water corporations, and authorizes the CPUC to fix rates for all public utilities subject to its jurisdiction (Pub. Util. Code Secs. 216, 2701; Cal. Const., art. XII, Sec. 6.)

Existing law defines “water corporation” to include every corporation or person owning, controlling, operating, or managing any water system for compensation with the state (Pub. Util. Code Sec. 241.)

Existing law prescribes specific notice requirements on water corporations, public utility districts, municipal utility districts, and municipally owned or operated public utilities furnishing water before the entity may terminate a residential service for nonpayment for a delinquent account. (Pub. Util. Code Secs. 779 et seq., 10009 et seq., 12822 et seq., and 16481 et seq.)

Existing law requires utilities to notify resident occupants of their option, under certain specified circumstances, to take over responsibility for a utility service account from a delinquent landlord account without paying the accumulated arrears. (Pub. Util. Code Secs. 777, 10009, 12822, 16481.)

Existing law prohibits these utility entities from terminating residential service for nonpayment: 1) during the pendency of an investigation by the corporation of a customer or subscriber dispute or complaint, 2) when a customer has been granted an extension for payment of a bill, or 3) on the certification of a licensed physician and surgeon that to do so would be life threatening to the customer and the customer is financially unable to pay for service within the normal payment period and willing to enter into an amortization agreement. (Pub. Util. Code Secs. 779, 10010, 12823, 16482.)

Existing law permits a customer, through the amortization agreement, to amortize, over a period not to exceed 12 months, the unpaid balance of any bill asserted to be beyond the means of the customer to pay within the normal period for payment. (Pub. Util. Code Secs. 779, 10010, 12823, 16482.)

Existing law prohibits a water corporation from terminating residential service on Saturday, Sunday, a legal holiday, or at any time the business offices of the corporation are not open to the public. (Pub. Util. Code Sec. 780.)

This bill would define “urban and community water system” as a public water system that supplies water to more than 200 service connections.

This bill would make an urban and community water system exempt from compliance with all of the existing procedural requirements, outlined above, relating to the termination of residential service by a water corporation, public utility district, municipal utility district, and utility owned by municipal corporations.

This bill would require an urban and community water system to have a written policy on the discontinuation of residential service for nonpayment available in certain languages and requires the policy to include a plan for deferred or reduced payments, alternative payment schedules, a formal mechanism for a customer to contest or appeal a bill, and a telephone number for a customer to contact and discuss options for averting discontinuation of residential service for nonpayment.

This bill would prohibit urban and community water systems from discontinuing residential service for nonpayment unless the account has been delinquent for at least 60 days and requires the urban and community water system to contact the customer on the account, and the occupant of the residential property, if applicable, by telephone or written notice, with specified information about the procedure for avoiding water service disconnection, at least seven business days before discontinuing residential service for nonpayment.

This bill would prohibit an urban and community water system from discontinuing residential service for nonpayment if: 1) the customer, or tenant of the customer, submits certification of a licensed physician that termination of the residential service would be life-threatening or would pose a serious threat to the health and safety of a resident of the premises where the service is provided, 2) the customer demonstrates that he or she is financially unable to pay for service within the normal payment period, and 3) the customer is willing to enter into an amortization agreement, alternate payment schedule, or a plan for deferred or reduced payment with respect to all delinquent charges.

This bill would require an urban and community water system to allow a customer that meets these conditions to amortize the unpaid balance, participate in an alternative payment schedule, or defer or reduce an unpaid balance for residential service for up to 12 months, unless the urban and community water system finds that a longer period is necessary.

This bill would permit the urban and community water system to choose which payment option the customer undertakes and to set the parameters of that payment option.

This bill would permit the urban and community water system to discontinue residential service if the customer fails to comply with the amortization agreement, alternative payment schedule, or deferral or reduction in payment plan for 60 days or more, or if the customer does not pay his or her current residential service charges for 60 days or more.

This bill would require an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges for residential customers who demonstrate that his or her household income is below 200 percent of the federal poverty line, and requires an urban and community water system to charge reconnection fees not to exceed the actual cost of the reconnection and limited to a specified maximum.

This bill would requires an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on the urban and community water system’s Internet Web site, if an Internet Web site exists.

COMMENT

1. Stated need for the bill

According to the author:

California has more than 3,000 city, county, mutual and private agencies delivering water to homes and apartments. While there are consistent lifeline programs for people having difficulty paying their electric, gas and telephone bills, there is nothing more than a local patchwork set of policies addressing long-term water bill delinquencies. Further, Prop 218 restrictions limit the ability of all water agencies to offer subsidies and rebates to low-income customers unable to pay for basic water needs.

The cost of water in California is rising at an alarming rate. Statewide, the cost has risen over 66% between 2007 and 2015. In Los Angeles the cost has risen 71% between 2010 and 2017, and during that same period the cost of water for San Franciscans has risen as much as 127%.

Since water is a necessity for life, and since California has declared that access to safe and affordable water is a human right, many low-income ratepayers face troubling tradeoffs in order to pay water bills. Establishing a statewide structure for helping low income ratepayers cope with increasing water rates will reduce difficult tradeoffs families will have to make and improve overall health and safety for many communities and households.

In support, a group of nine organizations “dedicated to helping at-risk communities access safe and affordable drinking water” writes:

The Human Right to water states that access to a reliable source of safe and affordable water is a right and not a privilege. SB 998 begins to address the large issue of affordability and its impact on access to water. While we agree that everyone should pay their bills in full and on time, the fact is that for some people, at certain points in their life, this becomes difficult, if not impossible. SB 998 is intended to provide transparency for the shutoff process and provide protection to vulnerable households.

While we appreciate the current language in the bill, we think it could be strengthened:

• Making the existing requirement in the Public Utilities Code allowing tenants to take responsibility for future water bills applicable to all public water systems.
• Expanding the notice requirement to tenants before shutoff to at least 30 days before a water shutoff, to ensure that they can deduct water costs from their monthly rent;
• Extending the time allowed for repayment of past due bills to at least 24 months;
• Including clear translation requirements for all notices.

2. Concerns expressed about the bill

In opposition to the bill unless amended, a coalition of five entities that “delivers close to 100 percent of the developed water that is delivered for residential, commercial, industrial, and agricultural use within California” writes:

[SB 998] would completely change the practice of water purveyors who currently undertake multiple protocols to ensure that water service is discontinued for non-payment only when a customer fails to follow-through with safeguards that are built into the operations and management of water systems. […]

The supporters of this measure have indicated that they are solving a problem that is occurring with water service discontinuation in the state. Unfortunately, there is no data presently to indicate that this is in fact a large problem or that their solution would effectively solve this issue. […] [L]ess that 0.5 percent of the customers whose service is discontinued fall within the low-income parameters cited in the bill. […]

The Human Right to Water, which has been referenced by supporters, also contains less publicized language in the state’s water code section 106.3, subdivision (ee) which reads, “(ee) The implementation of this section shall not infringe on the rights or responsibilities of any public water system.” The language in SB 998 currently infringes on the rights and responsibilities of all water purveyors, public, private and regulated, in California by forcing undue costs shifting from one set of customers to another set of customers. […] There are public agencies as well as private water purveyors that do not have multiple sources of additional revenue and cannot pay water bills for certain customers without shifting the cost onto other customers within their service area.

The compliance section of this current language calls for the Attorney General… to … restrain water purveyors [from] any use or practice that is unlawful. Regulated water utilities already answer to the Public Utilities Commission. Similarly, public agencies are responsible to a Board of Directors or City Council, both of which answer to the public who elected them. Carving out a role for the Attorney General to duplicate this oversight creates unnecessary costs and a redundant layer of existing oversight.

In further opposition to the bill unless amended, the Municipal Water District of Orange County writes:

MWDOC’s principle [sic] objection is that SB 998… arbitrarily eliminates existing protections without any explanation as to why an entirely new program is necessary or better.

MWDOC is willing to work with [the author’s] office on amendments that fit needed improvements to current programs that protect economically disadvantaged customers into the existing statutory framework. Because many of these programs are decades old, it is entirely possible that updates are needed to reflect evolving standards of transparency and public access. SB 998, however, does not seek improvements; it would eliminate the major programs from the Public Utilities Code and enact new ones in the Health and Safety Code, and many of the new provisions appear to be slight variations on existing law. Despite the similarities to existing law, one unintended consequences [sic] of SB 998 would be to eliminate interpretive regulations and legal precedent that water agencies reply [sic] on to understand their obligations to their economically disadvantaged customers. Entirely new statutory schemes create entirely new opportunities to litigate. We question the benefit to the public of such an approach.

3. Comparison of existing protections to what this bill proposes

The author asserts that the purpose behind this bill is to strengthen protections for poor Californians against having their access to water cut-off without a genuine opportunity to pay off a delinquent bill.

There are existing provisions in the law that protect residential customers against sudden discontinuation of utility services, including water shut-offs. At the same time that this bill creates new procedural safeguards against sudden water shut-offs, it also exempts urban and community water from the existing safeguards. The impact of this bill, therefore, is not the new safeguards it puts in place alone, but the difference between the existing safeguards and the safeguards this bill proposes. Viewed in this light, the bill in print does provide some additional safeguards against sudden water shut-offs in some respects, but in other respects, the bill in print actually provides fewer safeguards.

For instance, existing law provides that, when the customer of record for a certain utility service account is a landlord, and the landlord is delinquent on the account to the point that service may be cut off to the tenants at the property, the utility must, if it is feasible, allow the tenants take over the service account. (Pub. Util. Code Secs. 777, 10009, 12822, 16481.) The tenants do not have to pay the arrears on the account and they have the option of deducting further utility payments from the rent. (Ibid.) This bill, in its current form, eliminates these protections in the case of urban and community water systems.

Similarly, existing law permits certain utility service customers to appeal bill disputes to the California Public Utilities Commission. Existing law prevents utilities from shutting off service while such an appeal is under consideration. This bill, in its current form, eliminates these protections in the case of urban and community water systems.

Given these presumably unintended consequences of the bill in print and the author’s stated desire to strengthen, not diminish, procedural safeguards against water service disruption, the Committee may wish to consider amending the bill so that it does not eliminate any existing protections, but rather layers additional protections on top of the existing safeguards. Proposed amendments are set forth in Comment 7, below.

4. Assuring language access

The bill in print states that an urban and community water system shall have a written policy on water shut-offs for non-payment available in “English, Spanish, and any other language spoken by at least 10 percent of the people residing in its service area.” While this would ensure that many limited-English proficient customers can access information about how to avoid a water shutoff, existing law generally goes further, requiring that notices relating to utility shutoffs be translated into the six major languages listed in Section 1632 of the Civil Code. (See, e.g., Pub. Util. Code Secs. 777(b) and (f)(1); 10009(b); and 12822(b).)

Elsewhere in the bill, there is no explicit mention of what languages written notices must come in. To keep the bill consistent throughout and ensure that the majority of limited-English proficient customers will receive complete information about their rights and responsibilities, the Committee may wish to amend the bill to include references to Civil Code Section 1632 throughout the bill. Making all written notices available in all of the Civil Code Section 1632 languages as well as in any language spoken by 10 percent of the customers in the service area will involve a one-time additional cost for the translation, but with such a fundamental right at stake, broad language access is, arguably, especially important. Proposed amendments are set forth in Comment 7, below.

5. Reducing practical barriers

The bill in print contains two provisions that provide additional safeguards for customers who can “demonstrate” that their household income falls below 200 percent of the federal poverty level. The bill does not say how a customer is to demonstrate this fact or what documentation an urban and community water system may insist upon. To avoid future disputes about this and ensure that excessive documentation requirements do not become a practical barrier for poor Californians to benefit from the safeguards this bill is intended to create, the Committee may wish to consider amending the bill to specify what documentation would be considered sufficient to “demonstrate” the required degree of poverty. Proposed amendments are set forth in Comment 7, below.

6. Clarifying language

The bill in print appears to require urban and community water systems to provide one or more of four potential repayment options: amortization of the balance; an alternative payment schedule; reduction in the unpaid balance; or deferral of the unpaid balance. The bill goes on to say, after amendments taken in the Senate Committee on Environmental Quality, that the options may be taken over a twelve month period.

This section, as it comes before this Committee, is convoluted and susceptible to confusion. What does it mean to “reduce” an unpaid balance for 12 months? Does the reduction take place slowly over time? Does the full balance come due again 12 months after the reduction (in which case, what is the difference between that and deferring payment)? Or, as seems more likely, is the phrase about twelve months intended only to modify the amortization or payment deferral option?

The Committee may wish to consider amendments that would redraft this section for greater clarity. Proposed amendments are set forth in Comment 7, below.

7. Proposed Committee Amendments

In order to address the issues set forth in the analysis, above, the Committee may wish to incorporate amendments into the bill that would:

• maintain all of the existing protections against water shutoffs that are already in the codes, by striking the element of the bill in print that exempts urban and community water systems from the existing law;
• add broad language access to all written notices;
• clarify what the four repayment options will be;
• specify the documentation that customers can use to demonstrate that they are under 200 percent of federal poverty;
• make urban and community water systems give both telephonic and written notice of a delinquent bill that could lead to shutoff; and
• clarify that, once a customer defaults on a payment plan, they only get one final notice (without any further payment plan options) before shutoff.

As the amendments taken in the Senate Committee on Environmental Quality are still in processing, it is not possible to create a mock-up or line-by-line amendments based on the newly amended version of the bill. A mock-up of the specific proposed Committee amendments will be distributed to Committee members once the newly amended version of the bill is in print.

Support: American Civil Liberties Union of California; Audubon California; California Rural Legal Assistance Foundation; California State Association of Counties; Clean Water Action; Community Water Center; Food & Water Watch; Leadership Counsel for Justice & Accountability; Pacific Institute; Rural County Representatives of California; Sierra Club California; Western Center on Law & Poverty

Opposition: Association of California Water Agencies; California Municipal Utilities Association; California Special Districts Association; California Water Association; Central Basin Water Association; City of Lakewood; League of California Cities; Municipal Water District of Orange County; Regional Water Authority; San Diego Regional Water Authority; Southwest Water Coalition; Valley Center Municipal Water District

HISTORY

Source: Author

Related Pending Legislation: SB 623 (Monning, 2017) would establish the Safe and Affordable Drinking Water Fund, to be administered by the State Water Resources Control Board, for the purpose of securing access to safe drinking water for all Californians. SB 623 is currently in Assembly Rules Committee.

Prior Legislation:

SB 598 (Hueso, Ch. 362, Stats. 2017) required the CPUC to adopt rules, policies, or regulations with the goal of reducing the statewide level of gas and electric service disconnections for nonpayment by residential customers and requires the CPUC to submit an annual report to the Legislature on residential and household gas and electric service disconnections. SB 598 also prohibited a gas or electrical corporation from disconnecting service for nonpayment by a residential customer depending on life-support equipment who is unable to pay for service and who is, among other conditions, willing to enter into an amortization agreement.

AB 401 (Dodd, Ch. 662, Stats. 2015) required the State Water Resources Control Board to develop a plan for the funding and implementation of a new program, the Low-Income Water Rate Assistance Program, which would provide assistance to low-income ratepayers.

AB 685 (Eng, Ch. 524, Stats. 2012) enshrined the human right to access to water in the California Health and Safety Code.

Prior Vote:

Senate Environmental Quality Committee (Ayes 6, Noes 0)

Senate Energy, Utilities and Communications Committee (Ayes 8, Noes 1)

**************

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: SB 998

SUBJECT: Discontinuation of residential water service: urban and community water systems

ANALYSIS:

Existing law:

1. Under Proposition 218, imposes certain constitutional restrictions and procedures on local governments before the local government can impose or increase any fee or charge upon a parcel or upon a person incident of property ownership, including a user fee or charge for a property related service (Sec. 6, Art, XIII D, Cal. Const.)
   
   1. Requires revenues derived from the fee or charge to not exceed the funds required to provide the property related service.
      
   2. Requires the fee or charge imposed on any parcel or person incident of property ownership to be proportional to the cost of the service.
      
2. Provides the California Public Utilities Commission (CPUC) with regulatory authority over public utilities, including water corporations, and authorizes the CPUC to fix rates for all public utilities subject to its jurisdiction (PUC §§ 216, 2701, Sec. 6, Art. XII, Cal. Const.).
   
   1. Defines “water corporation” to include every corporation or person owning controlling, operating, or managing any water system for compensation with the state (PUC § 241).
      
3. Prescribes specific notice requirements on water corporations, public utility districts, municipal utility districts, and municipally owned or operated public utilities furnishing water before the entity may terminate a residential service for nonpayment for a delinquent account (PUC § § 779 et seq., 10009 et seq., 12822 et seq., and 16481 et seq.).
   
   1. In cases of a landlord tenant-relationship, also imposes certain notice requirements on the entity to inform the resident occupant before service is terminated and gives the resident occupant the right to become customers of the entity, to whom future service would be billed (PUC §§ 777, 10009, 12822, 16481).
      
4. Prohibits these utility entities from terminating residential service for nonpayment 1) during the pendency of an investigation by the corporation of a customer or subscriber dispute or complaint, 2) when a customer has been granted an extension for payment of a bill, or 3) on the certification of a licensed physician and surgeon that to do so would be life threatening to the customer and the customer is financially unable to pay for service within the normal payment period and willing to enter into an amortization agreement (PUC §§ 779, 10010, 12823, 16482).
   
   1. Permits a customer, through the amortization agreement, to amortize, over a period not to exceed 12 months, the unpaid balance of any bill asserted to be beyond the means of the customer to pay within the normal period for payment (PUC § 779, 10010, 12823, 16482).
      
   2. Prohibits a water corporation from terminating residential service on Saturday, Sunday, legal holiday, or at any time the business offices of the corporation is not open to the public (PUC § 780).
      

This bill:

1. Replaces, with regard to an urban and community water system, the above-described procedures relating to the termination of residential service by a water corporation, public utility district, municipal utility district, and utility owned by municipal corporations with alternative procedures, as specified.
   
   1. Defines “urban and community water system” as a public water system that supplies water to more than 200 service connections.
      
2. Requires an urban and community water system to have a written policy on the discontinuation of residential service for nonpayment available in certain languages and requires the policy to include a plan for deferred or reduced payments, alternative payment schedules, a formal mechanism for a customer to contest or appeal a bill, and a telephone number for a customer to contact and discuss options for averting discontinuation of residential service for nonpayment.
   
3. Prohibits urban and community water systems from discontinuing residential service for nonpayment unless the account has been delinquent for at least 60 days and requires the urban and community water system to contact the customer on the account, and the occupant of the residential property, if applicable, at least 7 business days before discontinuing residential service for nonpayment.
   
   1. If contacting the customer by telephone, requires the urban and community water system to offer to provide in writing the urban and community water system’s policy on discontinuation of residential service for nonpayment and to discuss options to avert discontinuation of residential service.
      
   2. If sending written notice, requires the written notice to be mailed to the owner of the residence to which the residential service is provided and, if the owner’s address is not the address of the property to which residential service is provided, to also send the notice to the occupant of the property.
      
      1. Details the information to be included in the written notice, including, among other things, a description of the procedure by which the customer may request amortization of the delinquent residential service charges.
         
   3. Requires the urban and community water system to make a good faith effort to visit the residence and leave specified notice of discontinuation if the urban and community water system is unable to make contact with the customer through telephone or written notice.
      
4. Prohibits an urban and community water system from discontinuing residential service for nonpayment if 1) the customer, or tenant of the customer, submits certification of a licensed physician that termination of the residential service would be life-threatening or would pose a serious threat to the health and safety of a resident of the premises where the service is provided, 2) the customer demonstrates that he or she is financially unable to pay for service within the normal payment period, and 3) the customer is willing to enter into an amortization agreement, alternate payment schedule, or a plan for deferred or reduced payment with respect to all delinquent charges.
   
   1. Requires the urban and community water system to allow a customer that meets these conditions to amortize the unpaid balance, participate in an alternative payment schedule, or defer or reduce an unpaid balance for residential service for up to 6 months, unless the urban and community water system finds that a longer period is necessary.
      
   2. Permits the urban and community water system to choose which payment option the customer undertakes and to set parameters of that payment option.
      
   3. Permits the urban and community water system to discontinue residential service if the customer fails to comply with the amortization agreement, alternative payment schedule, or deferral or reduction in payment plan for 60 days or more, or if the customer does not pay his or her current residential service charges for 60 days or more.
      
5. Requires an urban and community water system to waive reconnection fees and offer a reduction or waiver of interest charges for residential customers who demonstrate that his or her household income is below 200% of the federal poverty line, and requires an urban and community water system to charge specific reconnection fees for all other residential customers.
   
6. Requires an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on the urban and community water system’s Internet Web site, if an Internet Web site exists.
   

Background

1. Water utilities regulated by California Public Utilities Commission. The California Public Utilities Commission (CPUC) is responsible for regulating privately owned electric, gas, telecommunications, water, and transportation companies. The Water Division of the CPUC regulates over 100 investor-owned water and sewer utilities, which provide water service to about 16 percent of California’s population with annual water and wastewater revenues totaling about $1.4 billion. About 95 percent of that is served by nine large water utilities, serving over 10,000 connections each. Combined, the nine largest utilities serve approximately 1.175 million customers. However, the majority of CPUC-regulated water utilities, about 92 water utilities, have service connections of 2,000 or less, and 87 of those have service connections of 500 or less. The CPUC has authorized the largest nine water utilities to offer low-income rate assistance programs similar to those provided to electricity customers through the California Alternate Rates for Energy (CARE) Program, which provides discounts on energy bills for income qualified households. However, each program is varied in terms of the amount of assistance provided to low-income customers and the collection of the surcharge from nonparticipating ratepayers to cover the cost of the program. Additionally, statute and CPUC rules govern issues regarding discontinuation of service due to nonpayment by these water utilities.
   

Publicly owned water utilities. Most of California residents are served by cities, water districts, and mutual water companies, which are governed by local boards. Publicly owned utilities are non-profit local government agencies that provide electricity, water, and natural gas services to their customers and are not regulated by the CPUC. Instead, these utilities are subject to statutory and constitutional requirements of Proposition 218 (Article XIII D, Cal. Const.). Proposition 218 imposes certain procedural requirements and restrictions when local governments intend to increase or levy any property tax, assessment, fee, or charges and ensures that water rates and other fees are directly tied to the cost of service. As a result, these utilities are not able to increase rates in order to fund low-income programs for their customers. Additionally, Public Utilities Code requires specified processes for discontinuation of service for customers due to nonpayment for municipal non-investor owned water utilities which are similar, though not as robust, as those required for CPUC-regulated (investor owned) utilities.

1. State Water Resources Control Board. The State Water Resources Control Board (SWRCB) has general authority with regard to water quality and drinking water functions of the state government. Under the California Safe Drinking Water Act (Chapter 4 (commencing with Section 116270) of Part 12 of Division 104 of the Health and Safety Code), SWRCB administers provisions relating to public water systems and regulates drinking water to protect public health, including, among other things, adopting primary drinking water standards and maximum contaminant levels for contaminants in drinking water and permitting public water systems.
   
   1. Low Income Rate Assistance Act. In 2015, the Low-Income Water Rate Assistance Act was passed (AB 401, Dodd) which required the SWRCB, in collaboration with the State Board of Equalization and relevant stakeholders, to develop a plan for funding and implementing the Low-Income Water Rate Assistance Program. Under the act, the program was required to include a description of the method of collecting moneys to support and implement the program, including a discussion on any constitutional restrictions on public water agency ratesetting. The SWRCB was required to report to the Legislature its findings regarding the feasibility, financial stability, and desired structure of the program, including recommendations for legislative action, no later than February 1, 2018. As of the date of this analysis, the report has not been released.

Comments

1. Purpose of Bill. According to the author:
   

“California has more than 3,000 city, county, mutual and private agencies delivering water to homes and apartments. While there are consistent lifeline programs for people having difficulty paying their electric, gas and telephone bills, there is nothing more than a local patchwork set of policies addressing long-term water bill delinquencies. Further, Prop 218 restrictions limit the ability of all water agencies to offer subsidies and rebates to low-income customers unable to pay for basic water needs.

“The cost of water in California is rising at an alarming rate. Statewide, the cost has risen over 66 percent between 2007 and 2015. In Los Angeles, the cost has risen 71 percent between 2010 and 2017, and during that same period the cost of water for San Franciscans has risen as much as 127 percent.

“Since water is a necessity of life, many low-income ratepayers face troubling tradeoffs in order to pay water bills. Establishing a statewide structure for helping low income ratepayers cope with increasing water rates will reduce difficult tradeoffs families will have to make and improve overall health and safety for many communities and households.

1. Proposition 218 and water rates and reconnection fees. The Constitution defines a fee as any levy, other than an ad valorem tax, special tax, or assessment, that is imposed by a local government on a parcel or on a person as an incident of property ownership, including a user fee for a property-related service. The fee imposed on any parcel or person cannot exceed the proportional cost of the service that is attributable to the parcel. A fee imposed for residential water service by a local government, such as the water rates or reconnection fees described in this bill, would be considered a user fee for a property-related service and subject to the provisions of Proposition 218.
   

An urban and community water system that is required to continue to provide water service to a nonpaying customer would continue to accrue costs associated with supplying that service to that customer. For the most part, the bill allows an urban and community water system to recoup its costs from providing residential service to a nonpaying customer through an amortization agreement, alternative payment schedule, or plan for deferred or reduced payment. Being required to continue to provide residential service to a nonpaying customer may become an issue if a customer later fails to comply with the amortization agreement, alternative payment schedule, or plan for deferred or reduced payment. If this were to happen, an investor owned utility would have discretion on how to absorb those costs.

However, for a publicly owned utility that is subject to the limitations of Proposition 218, absorption of costs would be more complex. As a non-profit local governmental agency, the publicly owned utility may not have the means to absorb the costs of the nonpaying customer. Additionally, under the restrictions of Proposition 218, it does not have the authority to increase rates on other customers. If a publicly owned utility that is an urban and community water system were to increase its rates to cover the costs of nonpaying customers, to do so could be a violation of Proposition 218’s requirement that “the amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel.” The increased rates imposed on paying customers would not be proportional to the cost of water service received by those customers because the new increased rate would also include the cost of providing water service to nonpaying customers. And while nothing in SB 998 specifically authorizes an urban and community water system to increase the rates of other ratepayers in order to cover the costs of a nonpaying customer, there is nothing in the language that prevents an urban and community water system from doing so either.

Reconnection fees. SB 998 also requires an urban and community water system to waive the reconnection fees and offer a reduction or waiver of interest charges for customers whose household income is below 200% of the federal poverty line. SB 998 also caps the reconnection fee for all other customers at $50 or less if during normal operating hours and $150 or less if during nonoperational hours. Unlike the water rate discussion above, there are no provisions in SB 998 which would allow an urban and community water system to recoup its costs and it is unclear how an urban and community water system that is a publicly owned utility would do so. Similar to the issues discussed above regarding publicly-owned utilities, a question arises as to whether waiving reconnection fees or offering a reduction or waiver of interest charges for certain customers results in an increased reconnection fee for other customers. What is the cost of service that is typical for a reconnection fee? Is a $50 fee proportional to the cost of providing the service?

The committee may wish to consider requiring the author to amend the bill, before the bill reaches the Senate Floor, to specify that the reconnection fees shall be $50 or less but no more than the cost incurred by the urban and community water system in reconnecting the residential service.

1. When discontinuing water service would pose a serious threat. The bill prohibits an urban and community water system from discontinuing residential service for nonpayment if certain conditions are met, including, among others, if the customer, or a tenant of the customer, submits to the urban and community water system the certification of a licensed physician that discontinuation of residential service will be life-threatening to, or pose a serious threat to the health and safety of, a resident of the premises where service is provided. It is unclear what would constitute a “serious threat to the health and safety of a resident of the premises.” Different physicians may have varying standards on what he or she would consider to be a serious threat, and without providing guidelines or parameters of what would qualify as a serious threat, there is the risk of similarly-situated people being treated differently.
   

If this bill is approved by the committee, the committee may wish to require that the author continue to work with committee staff to set parameters on what would be considered a “serious threat.”

1. Discontinuing residential service. The bill prohibits an urban and community water system from discontinuing residential service for nonpayment if (1) certain medical conditions exist for the customer or tenant of the customer, (2) the customer is financially unable to pay for residential service, and (3) the customer is willing to enter into an amortization agreement, alternative payment schedule, or a plan for deferred or reduced payment. If the customer later becomes 60 days or more delinquent on the amortization agreement, alternative payment schedule, or deferral or reduction in payment plan for delinquent charges or if, while undertaking an amortization agreement, an alternative payment schedule, or a deferral or reduction in payment plan for delinquent changes, the customer becomes 60 days or more delinquent on his or her current residential service charges, the urban and community water system may discontinue the residential service.
   
   1. Multiple chances. Under SB 998’s provisions, a customer has 60 days after his or her bill is due before his or her account is considered delinquent. After that point, the customer, if he or she meets certain conditions, has various options to assist them in paying their bill and avoid discontinuation of service. If the customer fails to make payments on either the new agreement or new charges to the account, the urban and community water system can only discontinue the residential service if the customer is in default for another 60 days. In total, a nonpaying customer could continue to receive water service for 120 days, or almost 4 months, without having to pay for that service.
      
   2. Landlords and tenants. In the context of a landlord-tenant relationship, a discontinuation of residential service would have a direct effect on a tenant, a person who has no control over the landlord’s actions. Would it be fair for an urban and community water system to discontinue residential service for nonpayment, leaving a tenant without residential service, through no fault of the tenant? What if the discontinuation would be life threatening to, or pose a serious threat to the health and safety of, that tenant? Should some sort of mechanisms be placed in the bill to protect a tenant against a landlord who either acts in bad faith or just fails to act? In existing law, the PUC allows for tenants to become customers of the water corporation, public utility district, municipal utility district, or municipally owned or operated public utility furnishing water.
      

As the bill moves through the legislative process, the author may wish to provide similar tenant protection provisions in the bill.

1. California Public Utilities Commission versus State Water Resources Control Board. Under existing law, the CPUC generally has authority over the regulation of services and utilities and assures that California residents have access to safe and reliable utility infrastructure and services. In comparison, the SWRCB has regulatory authority over the quality of the state’s water resources and drinking water. The SWRCB is involved with the quality of the water, especially drinking water, whereas the CPUC is involved with the supply and access to that water.
   

As discussed above, there are investor owned water utilities that are regulated by the CPUC and publicly owned utilities that are not regulated by the CPUC but instead are subject to Proposition 218 and its implementing statutory provisions. An urban and community water system, as defined by SB 998, could fall into either of these categories, depending on the structure of that particular water system. As a bill primarily focused on procedures to be followed in the event of a discontinuation of residential service, the bill seems to mainly be about access to that water and not necessarily about water quality. While committee staff is not questioning the placement of the bill’s provisions in a particular code, as the bill moves through the committee process, the author may wish to further consider whether the CPUC or SWRCB would be the more appropriate agency to enforce these provisions.

1. Proposed amendments
   
   1. This bill permits the amortization agreement, alternate payment schedule, or a plan for deferred or reduced payment to be for a period of not more than 6 months.
      

Under similar existing law provisions in the Public Utilities Code, a customer is permitted to amortize, over a period not to exceed 12 months, the unpaid balance of any bill asserted beyond the means of the customer to pay within the normal period of payment under certain conditions.

An amendment is needed to permit the amortization agreement, alternative payment schedule, or a plan for deferred or reduced payments to be for a period of not more than 12 months in order to be consistent with similar procedures already provided for under existing law.

• 1. This bill requires an urban and community water system to report the number of annual discontinuations of residential service for inability to pay on the urban and community water system’s Internet Web site, if an Internet Web site exists. According to the author, the provision is aimed at providing transparency to the public. However, it is unknown if all urban and community water systems would have an internet website. Additionally, the public may benefit from being able to access the information in one central location.
     

An amendment is needed to require the urban and community water system to also report the information to the State Water Resources Control Board, and to require the State Water Resources Control Board to post that information on its Internet Web site.

Related/Prior Legislation

SB 623 (Monning, 2017) establishes the Safe and Affordable Drinking Water Fund, to be administered by the State Water Resources Control Board, for the purpose of securing access to safe drinking water for all Californians. SB 623 is currently in Assembly Rules Committee.

SB 598 (Hueso, Chapter 362, Statutes of 2017) requires the CPUC to adopt rules, policies, or regulations with the goal of reducing the statewide level of gas and electric service disconnections for nonpayment by residential customers and requires the CPUC to submit an annual report to the Legislature on residential and household gas and electric service disconnections. SB 598 also prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer depending on life-support equipment who is unable to pay for service and who is, among other conditions, willing to enter into an amortization agreement.

AB 401 (Dodd, Chapter 662, Statutes of 2015) requires the State Water Resources Control Board to develop a plan for the funding and implementation of a new program, the Low-Income Water Rate Assistance Program, which would provide assistance to low-income ratepayers.

SOURCE:

Author

TRIPLE REFERRAL: This measure was heard in the Senate Energy, Utilities, and Communications Committee on April 3, 2018, and passed out of committee with a vote of 8 to 1. If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Judiciary Committee.

SUPPORT:

None received

OPPOSITION:

Association of California Water Agencies

California Municipal Utilities Association

California Special Districts Association

California Water Association

League of California Cities

Olivehain Municipal Water District

ARGUMENTS IN SUPPORT:

According to the author, “Rising water rates for low income ratepayers is resulting in higher delinquency rates on paying water bills, which, in turn, leads to an increasing number of water service shutoffs. In 2015, nearly 8200 EBMUD customers had water service interruptions due to unpaid bills, and reportedly, 6,000 San Diego households face the loss of water service due to delinquent bills each year. Loss of water service can have dire health and safety consequences for residents, lead to a loss of residence, and create strains among residents within a household. When a tenant is faced with a shutoff, and the tenant relies on the landlord to pay for water service, rectifying the problem becomes complicated for the tenant.

“To the extent that there will be instances, under the provisions of SB 988, when water agencies will be prohibited from shutting off water to a residence notwithstanding the fact that the ratepayer is delinquent in paying their water bill, some cost pressure on rates for all remaining ratepayers could occur. The amount of cost pressure will be a function of the number of delinquent ratepayers and residences that qualify for protection under the circumstances enumerated in the bill. The fact that the bill requires water agencies to have policies that provide deferred payment plans, and alternate payment schedules for delinquent ratepayers should minimize the number of total delinquencies in any given water system, thereby minimizing cost pressures.

ARGUMENTS IN OPPOSITION:

According to the opposition, “[e]stablishing a 60-day grace period limits the ability to collect revenues, and allows delinquent accounts to continue to receive services that are not being paid for by the individual receiving the services. These costs would necessarily be borne by all other ratepayers. Additionally, mandating a maximum amount that can be charged for fees and services irrespective of the cost to provide those services does not allow an agency to fully recover its costs, which would again be passed on to all other ratepayers. Fees and charges must be allowed to be set at levels that recover operating costs and allow for construction and maintenance of critical water infrastructure. When water agencies’ ability to collect appropriate revenues are threatened, so is their ability to provide safe, clean, and reliable water supplies.”

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SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2017 - 2018 Regular

Bill No: Hearing Date: 4/3/2018