Rate Proposal FAQs

Find answers to the most frequently-asked questions about the electric and water utility rate proposal.

Many of these questions were raised during rate plan community meetings. View community meeting summaries and rate plan documents.

 

General

Why does RPU need a rate increase?

Why is a rate increase important at this time?

How much will electric and water rates increase?

How are rates affected by state legislative and regulatory mandates?

When was the last time RPU increased rates?

What have RPU's rates paid for since the last increase?

How much have costs increased since RPU's last rate increase?

How do the proposed rates address legal requirements which prohibit charging more than cost of service?

Is it true that rates in 10 years will be 100% more than what they are now?

Affordability

What is RPU doing to keep rates low?

How do RPU's rates compare to other agencies in our area?

One of the reasons why we enjoy living/doing business in Riverside is the lower utility costs. Is this going away?

I am on a fixed income and am currently getting a 2-3% raise through social security. Your proposed rates appear to raise water and electricity costs by 50% or more. What's going on?

Infrastructure Replacement

How will RPU prioritize infrastructure investments? Will all wards see improvements?

Has RPU analyzed potential cost savings by pre-purchasing materials?

What parts of town are electric poles located that need to be replaced?

Is it more expensive to install/replace underground electric distribution infrastructure?

How many electric distribution poles does RPU replace every year?

Who will do this work? City employees or contractors?

Are we able to hire only Riverside contractors?

Has RPU allocated funds for decommissioning San Onofre Nuclear Generation Station? Are decommissioning costs included in this rate increase?

You showed us a map of infrastructure that needs to be replaced. The majority of this infrastructure is in Downtown Riverside. The majority of ours [on the west side of the city] is much newer. You're asking us to subsidize infrastructure for Downtown Riverside. That is not fair.

The City put up Wi-Fi and then took it down. Where does that come in?

Can you promise that, by looking at our infrastructure annually, we won't need such large stair-step rate increases again?

Renewable Energy

What is renewable energy?

How much will it cost RPU to meet the state's renewable energy mandates?

Why is renewable energy more expensive?

Why can't RPU reduce its use of renewable energy?

How often will renewable energy facilities need repairs?

Is RPU willing to reduce the proposed rate increase if the current U.S. presidential administration is successful in getting rid of regulations on the use of coal?

What is RPU doing to support renewable energy?

Is the City using money right now to build renewable energy generation?

Are more solar panels going to be installed in Riverside and in Nevada?

What is the upkeep cost for solar? Do you have to maintain the cleanliness of optics on the solar panels?

Is Riverside building [its own] energy generating station instead of buying it?

Water Supply

Why is RPU proposing to fund water supply projects when it is selling excess water supply to Western Municipal Water District?

How much water does RPU sell to Western Municipal Water District, and at what rate?

Can you explain how some are RPU water customers and some are not?

Does RPU provide water services in the county (outside city limits)?

Why do RPU customers pay money to Metropolitan Water District of Southern California through our property tax bills if we receive no water them?

Is RPU planning to expand the "purple pipe" recycled water system?

What is Riverside doing to collect rainwater to put back into ground, especially on this end of the city [western Riverside]?

Finance

What are the financial policies included in the presentation's pie chart (slides 21-22)? Can you provide links?

How much revenue will the rate increase generate, and how will it be used?

Why are you asking for us to conserve and then asking for more money?

Does RPU have a policy about maintaining sufficient reserves to stay ahead of aging infrastructure?

Why doesn't RPU fund 100% of infrastructure replacement costs with bonds? Isn't a rate increase plus bond funding a form of double taxation?

At one time, RPU had roughly $300 million in reserves. After using reserves to offset financial impacts associated with the drought and for capital projects, what is the current balance?

Is it true that RPU did not need to increase rates over the last few years because of its reserves?

Does RPU receive any revenues from property taxes?

Why don't RPU's additional revenues pay for the rate increase?

Is RPU contemplating increasing its charges for scheduling services provided to the cities of Banning and Rancho Cucamonga?

Will funding from the proposed rate increase be tracked separately?

Did RPU receive any funding from Measure Z?

What is the General Fund Transfer? Are there any proposed changes to this transfer?

Should Riversiders use more water in order to offset the impact of the drought on RPU's finances?

There has been recent negative press coverage concerning a huge overtime payout to an RPU dispatcher. What is RPU doing to address excessive overtime?

Are RPU employees paying their fair share of CalPERS?

What are the average salary increases this year?

What the cost of service for one unit (one hundred cubic feet, or "CCF") of RPU water?

Are RPU employees prepared to take a pay cut?

Please provide clarity on the Hillwood property, the lease of which provides the potential for $45 million in additional revenues over time.

What is RPU's monthly delinquency rate for unpaid bills?

Would it be possible to extend the rate increase from five to seven or eight years to lessen the sticker shock?

Will new development over the next ten years have a positive or negative impact on rates?

Are commercial customers impacted in same way by the rate increases as residential customers?

If you hire contract labor, do you have to use prevailing wage?

Rate Design

What's the difference between fixed costs and variable costs?

What is the Reliability Charge? Why is it needed? Will it go away?

What is the Network Access Charge, and why is it needed?

We've got all these different [electric] charges. Is there anyone not getting charged any one of these charges? Why can’t we have just one charge?

What's the difference between the Network Access Charge, the Customer Charge, and the Reliability Charge?

With our climate, my bill really goes up in the summer. How will the rate plan help me?

How will the proposed rates encourage conservation and sustainability?

Why did RPU not lower its residential Tier 4 rate when it stopped importing water?

If RPU moves to remote meter reading, will the [water] meter charge go away?

Why is RPU changing both its water rates and reducing the allocation for each tier?

How can I be charged $2.50 for water used in a month yet have a $42 sewer charge? Don't some cities base sewer charges on water use?

Agricultural Customers

Has RPU considered what will happen to Riverside's agriculture and the Grow Riverside movement if the proposed increases to agricultural rates are approved?

What will happen to the Gage Canal if the WA-3 and WA-9 rates are changed?

Can RPU provide customers with Gage Canal Company shares?

Are agricultural customers able to drill wells?

Does Gage Canal water go through a treatment process for drinking water?

How much will this increase to WA-3 and WA-9 rates benefit RPU financially?

Is Riverside selling Gage Canal water to Western Municipal Water District?

I have a residence with a grove. Does RPU distinguish between water for the house and for the grove? It may be more fair to treat them separately by installing separate meters.

Couldn't Riverside's agriculture help RPU receive Cap and Trade funding by capturing greenhouse gasses?

Solar Customers

Are rates changing because so many RPU customers are taking advantage of solar?

I am in the process of installing a solar system - will I have to pay for this rate increase?

Are solar rebates still available?

Customer Assistance

Are there other ways I can save on my bill?

I am a low-income customer on a fixed income. How can RPU help me?

What tools and resources are available to help better manage my monthly bill?

Does RPU offer discounted rates to utility employees?

Is RPU meeting with commercial customers?

Are rebate programs applicable to commercial?

Governance

When will my bill change?

How can I learn more and provide comments on the proposed rate increase?

Will the inflation-based rate increases in years 6-10 include the opportunity for public review and comment?

Is the City of Riverside planning on taking over Western Municipal Water District?

Does this rate proposal still have to be approved by City Council?

Are there more opportunities to address the Board of Public Utilities about the rate proposal?

Will the information to be presented at the November 28th workshop be available prior to the meeting?

What is the role of Proposition 218 in the rate-setting process? Does it require voter approval? What about Measure A?

Are the proposed rates based on an overall plan recommended by the City Council? Is there another plan being considered?


General

 

Why does RPU need a rate increase?

Public health and safety requires additional revenues to replace aging utility infrastructure in order to ensure reliable electric and water service now and in the future. In addition, RPU is facing increased costs to buy more expensive renewable power, as required by California state law, in order to reduce greenhouse gas emissions. Fortunately, RPU can meet these challenges while keeping rates affordable and competitive when compared to neighboring electric and water providers. RPU also needs updated rate structures to recover fixed costs in a way that is fair and equitable to all customers. RPU's electric and water rates have been frozen for seven years to help the community recover from the Great Recession. Further delay puts at risk our community's public health and safety, and will lead to significantly higher costs when critical systems fail and require emergency repairs.

 

Why is a rate increase important at this time?

The proposed rate increase is vital for the public health and safety of Riverside's residents and businesses. A city is a “system of systems” - health care, schools, commerce, public safety, utilities - and all of these systems are connected. When one system fails, it directly impacts all the other systems, and our economy and community suffers. All infrastructure eventually needs to be replaced, or it will eventually fail, endangering residents and businesses and requiring emergency repair and replacement. Not only is it important to replace critical infrastructure for the health and safety of the community, but it is far less expensive to replace infrastructure ahead of time than under emergency conditions.

 

How much will electric and water rates increase?

Each customer's rate increase will vary depending on customer type (residential, commercial, etc.) and usage. On average, the projected annual rate increase will be 4.8% for electric and 8.6% for water. To estimate how the residential rate increase will affect you, try our electric rates calculator or our water rates calculator

 

How are rates affected by state legislative and regulatory mandates?

A number of state legislative mandates are directly impacting RPU rates. For electricity, state mandates to increase use of renewable energy and decrease greenhouse gas emissions have required RPU to decrease the utility's reliance on thermal (coal, gas, nuclear) resources and increase procurement of more expensive renewable resources. For water, the recent state-mandated drought restrictions reduced RPU's water revenues by $33 million while the costs to maintain the water delivery system remained the same. All of these pressures are forcing RPU to increase rates more than what would be required if these mandates were not in place.

 

When was the last time RPU increased rates?

The last rate increases were approved by City Council about 10 years ago (2007), and the last annual rate increase for both water and electric went into effect in 2010. At that time, utility rates were frozen to help the local economy recover from the economic downturn in 2008.

 

What have RPU's rates paid for since the last increase?

The most recent rate increases helped pay for (1) a new power plant to help meet our summer peak energy needs, (2) additional high voltage transmission lines within Riverside to connect us to the regional grid, (3) the replacement of an aging water reservoir that had earthquake damage, (4) a new water treatment plant so we have an independent supply of water, and (5) ongoing reactive maintenance of the electric and water distribution systems. Current rates do not provide sufficient funds for critical infrastructure replacements and increased costs associated with new regulatory requirements.

 

How much have costs increased since RPU's last rate increase?

Just like your household budget, costs tend to increase over time. The Consumer Price Index for general consumer goods has increased 13% since 2010 (RPU's last rate increase). Additionally, the State of California has passed new laws and regulations that have increased costs associated with renewable power, energy and water efficiency, and other areas of utility operations. RPU rates have not kept up with these increasing costs.

 

How do the proposed rates address legal requirements which prohibit charging more than cost of service?

The electric and water rate proposals are based on Cost of Service and Rate Design Studies which address all legal requirements governing rates. Both studies are available for download on RPU's Rate Plan and Public Meeting Documents webpage.

 

Is it true that rates in 10 years will be 100% more than what they are now?

No. The projected rate increase is 25% for electric and 45% for water for the first five years, followed by annual cost-based price adjustments for the remaining five years.



Affordability

 

What is RPU doing to keep rates low?

Before asking for a rate increase, RPU has looked for every opportunity to reduce costs and improve operational efficiencies. RPU uses bond funds and reserves to mitigate cost impacts associated with capital projects, and our high credit ratings save ratepayers millions in lower interest payments. RPU also keeps rates low by generating revenues through use of existing assets. For example, RPU sells excess water to neighboring agencies, remarkets renewable energy credits, has installed solar panels at well sites to lower water production costs, leases RPU-owned properties while preserving utility access, and receives payment for scheduling other cities' power supplies through the state grid. Finally, RPU will obtain an $85 million line of credit which will reduce cash reserve requirements and keep rates low. All of these activities result in a lower rate increase proposal: 4.8% instead of 6.3% for electric, and 8.6% rather than 17.5% for water.

 

How do RPU's rates compare to other agencies in our area?

RPU's rates are and will continue to be low compared to neighboring electric and water utilities, even after the proposed increase. Under the rate plan, RPU's typical residential customer's electric rate will be 15% less than Southern California Edison, and RPU's typical residential customer's water rate will be 40% less than Western Municipal Water District.

 

One of the reasons why we enjoy living/doing business in Riverside is the lower utility costs. Is this going away?

No. In comparison to surrounding utilities, RPU will continue to offer water and electric rates that are competitive and among the lowest in Southern California even after this proposed rate increase.

 

I am on a fixed income and am currently getting a 2-3% raise through social security. Your proposed rates appear to raise water and electricity costs by 50% or more. What's going on?

RPU understands and appreciates these comments, which will be reflected to the City Council and Board of Public Utilities. The cumulative average proposed rate increase is 25% for electric and 45% for water for the first five years. RPU is doing everything possible to keep rates low. RPU has over 40 rebates and other programs to assist customers in reducing their bills and use water as efficiently as possible, including programs specifically for low-income and fixed income customers. RPU is also developing expanded programs to assist low-income and fixed income customers.



Infrastructure Replacement

 

How will RPU prioritize infrastructure investments? Will all wards see improvements?

RPU has a ten-year funding plan for needed capital replacements. RPU will report progress on implementing this plan annually to the Board of Public Utilities and City Council as part of its two-year budget and five-year finance plan. Capital improvements will take place in all wards and will benefit all RPU customers.

 

Has RPU analyzed potential cost savings by pre-purchasing materials?

RPU conducts an annual accounting of projected versus annual capital costs as part of its financial reporting to the Board of Public Utilities and City Council. RPU does enter into long-term contracts for future power supply purchases, but does not currently make advanced purchases for infrastructure replacement. RPU will review this option for future purchases.

 

What parts of town are electric poles located that need to be replaced?

Riverside's electric distribution infrastructure is roughly 60% underground and 40% overhead. Older developments typically have overhead, while newer communities typically have underground electric distribution infrastructure. Ward 4 primarily has underground cables.

 

Is it more expensive to install/replace underground electric distribution infrastructure?

Yes, about five times more expensive. Based on city policy, all new developments have to install underground electric distribution infrastructure.

 

How many electric distribution poles does RPU replace every year?

RPU currently replaces about 200 electric poles per year. Based on industry standards, RPU should be replacing 600 poles per year.

 

Who will do this work? City employees or contractors?

Both existing RPU employees and contractors will perform infrastructure replacement work. However, RPU will not hire any new employees. Most of the new work will be done by contractors and consultants to reduce employment costs to the utility.

 

Are we able to hire only Riverside contractors?

Typically, RPU conducts an open bidding process and accepts the lowest responsive bid in order to keep costs low for ratepayers.

 

Has RPU allocated funds for decommissioning San Onofre Nuclear Generation Station? Are decommissioning costs included in this rate increase?

RPU has already set aside funds for San Onofre decommissioning in a restricted reserve. No decommissioning funds will come out of the proposed rate increase.

 

You showed us a map of infrastructure that needs to be replaced. The majority of this infrastructure is in Downtown Riverside. The majority of ours [on the west side of the city] is much newer. You're asking us to subsidize infrastructure for Downtown Riverside. That is not fair.

RPU is responsible for reliable electric and water service for their entire service area. Eventually all infrastructure needs to be replaced, regardless of where and when it was originally installed. RPU has a ten-year funding plan for needed capital replacements. Capital improvements will take place in all wards and will benefit all RPU customers.

 

The City put up Wi-Fi and then took it down. Where does that come in?

The City's Wi-Fi network is managed by the Innovation and Technology Department. In 2014, the City Council authorized the unwinding of the citywide Wi-Fi network and the creation of a Wi-Fi "hotspot" pilot program. Information on City's Wi-Fi program can be found on the Innovation and Technology website.

 

Can you promise that, by looking at our infrastructure annually, we won't need such large stair-step rate increases again?

The current rate proposal will put us ahead of most other utilities, in terms of both infrastructure replacement and rate-setting. RPU is proposing to provide the Board of Public Utilities and City Council with annual updates to its financial forecasts and infrastructure replacement rates, including new rate projections for the next five years which the City Council can either accept or refine. This will ensure that the Board and City Council are presented with the latest forecasts each year, thereby eliminating unnecessary stair-step increases as we have had in the past due to delays in implementing rate plans.



Renewable Energy

 

What is renewable energy?

Renewable or "clean" power typically is defined as energy that is generated through naturally replenished resources without a negative impact on the environment, such as greenhouse gas emissions.

 

How much will it cost RPU to meet the state's renewable energy mandates?

Over the next five years, California’s renewable energy mandates will increase RPU’s costs by $105 million.

 

Why is renewable energy more expensive?

Most renewable energy is based on new technologies, like solar panels, large wind turbines, and geothermal wells. New technologies typically cost more when they first reach the market before gradually coming down in price. Additionally, new utility-scale solar plants, wind farms, and geothermal stations are built in remote locations and require new transmission lines. Solar and wind may also require quick-start natural gas plants or large batteries to balance their energy deliveries when the sun goes behind a cloud or the wind dies suddenly. Likewise, geothermal power requires specialized technology to drill for the underground heat source and capture its energy. The good news is that the cost of renewable energy has come down and is projected to become competitive with other power supplies.

 

Why can't RPU reduce its use of renewable energy?

RPU is mandated by California state law to increase its use of renewable energy and reduce its greenhouse gas emissions.

 

How often will renewable energy facilities need repairs?

RPU contracts with renewable energy providers to receive renewable energy at fixed prices. Under these contracts, it is the responsibility of the energy provider to maintain their own infrastructure.

 

Is RPU willing to reduce the proposed rate increase if the current U.S. presidential administration is successful in getting rid of regulations on the use of coal?

The California Legislature, through Senate Bill 1368 (2006), has essentially banned the use of coal for the generation of electricity. RPU's contract with the Intermountain Power Plant in Utah expires in 2027.

 

What is RPU doing to support renewable energy?

Solar rebates are set to expire on December 31, 2017. However, the rate proposal includes two new time-of-use rates for electric vehicle owners. RPU is also working to develop a 100% "green" rate, community solar programs, and early technology roll-outs to assist low-income and fixed income customers.

 

Is the City using money right now to build renewable energy generation?

RPU spends $190 million annually on power supply, and roughly 30% of this supply is from renewable sources of energy. The state currently requires RPU to increase renewable power to 50% by 2030, which will cost the utility more than $200 million over the next decade. Legislation has been introduced to push California's energy mandate to 100% by 2045.

 

Are more solar panels going to be installed in Riverside and in Nevada?

Both. It is cheaper to develop large-scale solar generation stations in the desert and ship the power back to Riverside than to install panels on Riverside's roofs. But rooftop solar continues to grow. RPU has also developed solar installations on the Tequesquite Landfill and on utility-owned properties in San Bernardino.

 

What is the upkeep cost for solar? Do you have to maintain the cleanliness of optics on the solar panels?

The upkeep cost for solar panels is minimal, but they do require periodic cleaning.

 

Is Riverside building [its own] energy generating station instead of buying it?

RPU does not have current plans to build or buy an energy generating station. In the past, RPU has both built and purchased energy generation facilities. Examples of built facilities include the Riverside Energy Resource Center and the Tequesquite Landfill Solar Project. An example of a purchased facility is the Clearwater Power Plant in Corona.



Water Supply

 

Why is RPU proposing to fund water supply projects when it is selling excess water supply to Western Municipal Water District?

RPU is responsible for meeting existing as well as future water supply needs. The rate plan includes funding for water supply projects to fully utilize available low-cost local water supplies, such as storm water and recycled water, in order to maintain Riverside's independence from high-cost and unreliable imported water supplies for the foreseeable future.

 

How much water does RPU sell to Western Municipal Water District, and at what rate?

RPU leases pipeline capacity and sells excess water supply to Western Municipal Water District under a Water Supply Agreement signed in 2017. So far this year, RPU has sold 706 acre-feet (230 million gallons) of water to Western Municipal Water District for $718 per acre-foot. This rate will increase significantly in future years, as it tracks the cost of imported water. For more information, visit RiversidePublicUtilities.com/WMWDandRPU

 

Can you explain how some are RPU water customers and some are not?

Approximately 20% of Riverside, including Orangecrest and other southeastern portions of the city, receives their water service from Western Municipal Water District.

 

Does RPU provide water services in the county (outside city limits)?

Yes, there are a few water customers outside of the city limits. These customers are required to pay more for service.

 

Why do RPU customers pay money to Metropolitan Water District of Southern California through our property tax bills if we receive no water them?

The City of Riverside is within Metropolitan's service territory and subject to an ad valorem tax rate equal to 0.0035% of assessed property value. RPU maintains three imported water supply connections to Metropolitan's system. If its groundwater transmission pipelines are damaged due to an earthquake, RPU will be able to access emergency water supply through Metropolitan.

 

Is RPU planning to expand the "purple pipe" recycled water system?

RPU is currently implementing Phase I of a recycled water system expansion, which should be done by next summer. Funding for Phase II is included in the rate proposal.

 

What is Riverside doing to collect rainwater to put back into ground, especially on this end of the city [western Riverside]?

The original rate plan includes four stormwater capture and recharge projects to augment natural surface water recharge to the underlying groundwater basins. As part of the revised rate plan, RPU will propose that some of these projects be removed and brought back at a later time. To date, RPU has focused on recharge projects located upgradient of our existing well fields (i.e., where groundwater extraction occurs) because these provide the greatest value to our customers. RPU has provided support to Western Municipal Water District’s efforts to capture and recharge stormwater near the western end of the City. Stormwater recharge west of Adams Street recharges the Arlington Groundwater Basin from which Western is the largest groundwater producer.



Finance

 

What are the financial policies included in the presentation's pie chart (slides 21-22)? Can you provide links?

The RPU financial policies funded by the rate increase are 1) transferring 11.5% of gross utility revenues to the City General Fund, consistent with the City Charter (Sec. 1204, 1204.1); and 2) maintaining minimum reserve levels, consistent with City Council-adopted RPU Fiscal Policies.

 

How much revenue will the rate increase generate, and how will it be used?

Over five years, the electric rate increase will generate $185 million and the water rate increase will generate $47 million. These revenues will help fund over $400 million in capital projects to replace aging infrastructure, 75% of which will be financed using bond proceeds. Revenues will also be used to acquire renewable energy to meet greenhouse gas regulations.

 

Why are you asking for us to conserve and then asking for more money?

RPU encourages all customers to be wise and efficient energy and water users. At the same time, RPU's finances need to keep up with the increasing costs to operate and maintain reliable electric and water systems. Most of these costs are fixed costs that RPU incurs regardless of customer usage. The rate plan proposes to increase fixed charges in order to ensure adequate recovery of costs. RPU will continue to provide tiered rates which enable customers to see their usage charges go down as they use less water and electricity.

 

Does RPU have a policy about maintaining sufficient reserves to stay ahead of aging infrastructure?

RPU maintains an active capital improvement program and asset management program. For long-term investments such as infrastructure replacement, RPU issues bonds which are paid back over a long period of time. This is similar to taking out a loan in order to purchase a house.

 

Why doesn't RPU fund 100% of infrastructure replacement costs with bonds? Isn't a rate increase plus bond funding a form of double taxation?

RPU has a financial policy that requires a minimum reserve level in order to meet bond requirements and keep interest rates low, thus saving ratepayers millions over the lifetime of the bond. The proposed rate increase will support maintaining reserves and allow RPU to issue bonds for infrastructure replacement. This is not double taxation because the rate increase includes the costs associated with paying back the bonds.

 

At one time, RPU had roughly $300 million in reserves. After using reserves to offset financial impacts associated with the drought and for capital projects, what is the current balance?

Current reserve balances are roughly $175 million for electric and $35 million for water.

 

Is it true that RPU did not need to increase rates over the last few years because of its reserves?

Yes, RPU was able to increase reserves in the past due to selling water and leasing utility-owned property. Also, RPU has not hired as many employees as budgeted, resulting in labor cost savings that add to higher reserves. Over the last two years, RPU has been using these reserves to pay for infrastructure replacements. However, reserves will soon decrease below the minimum level established by City Council policy.

 

Does RPU receive any revenues from property taxes?

No. RPU's primary source of revenues are rates. RPU also generates revenues through selling/leasing land and water, providing services to other parties, and through regional and state programs.

 

Why don't RPU's additional revenues pay for the rate increase?

Additional revenues help to reduce the amount of the proposed rate increase. On average, the additional revenues reduce the amount of the proposed electric rate increase from 6.3% to 4.8%, and reduce the amount of the proposed water rate increase from 17.5% to 8.6%.

 

Is RPU contemplating increasing its charges for scheduling services provided to the cities of Banning and Rancho Cucamonga?

RPU believes it charges a fair rate and is adequately compensated for the scheduling services. RPU is currently proposing to provide scheduling services for additional Southern California municipal utilities.

 

Will funding from the proposed rate increase be tracked separately?

No. However, RPU tracks and reports on all rate-funded expenditures to the Board of Public Utilities and the City Council through annual updates to its two-year budgets and five-year financial plans. RPU also provides the Board with monthly, quarterly, and annual financial reports which are available through EngageRiverside.com.

 

Did RPU receive any funding from Measure Z?

No.

 

What is the General Fund Transfer? Are there any proposed changes to this transfer?

Riverside's City Charter provides for a transfer of up to 11.5% of RPU's gross revenues to the City's General Fund. This transfer helps fund public safety, emergency services, parks and recreation, and other community benefits. There are no proposed changes to this transfer.

 

Should Riversiders use more water in order to offset the impact of the drought on RPU's finances?

RPU encourages the beneficial use of its water supply. If more water is used than is forecasted, the rates will go down. However, RPU's rates are currently unbalanced, in that most of our costs are fixed but most of our revenue is based on use. In comparison, wireless carriers charge the same regardless of the number of calls made, because mobile phone providers still have to pay for their wireless networks (e.g., cell phone towers) regardless of how often they are used. The rate plan proposes to generate more revenue from fixed charges in order to start rebalancing RPU's revenues and expenses.

 

There has been recent negative press coverage concerning a huge overtime payout to an RPU dispatcher. What is RPU doing to address excessive overtime?

RPU accepts responsibility for large overtime payments in the past, and has taken proactive steps to fix the problem. Specifically, RPU was short three electric dispatchers. These positions have now been filled as of the end of September. Overtime will continue to be high in 2017 but will be lower than in 2016; by 2018 this will no longer be an issue. Additionally, RPU managers have changed various protocols related to requesting and approving overtime, which will lead to a reduction in overtime use.

 

Are RPU employees paying their fair share of CalPERS?

Under state law, all new hires must pay their full employee share of CalPERS. The City Manager has implemented a new strategy for existing employees. Starting this year, all existing employees will start paying a portion of their employee share, which will ramp up to paying their full share in four years.

 

What are the average salary increases this year?

Annual salary increases are based on negotiations with the various union groups. The City completed all union negotiations by the end of 2016. RPU employees represented by the International Brotherhood of Electric Workers (IBEW) will receive a 4% cost of living adjustment (COLA) effective November 1, 2017. RPU employees represented by the Service Employees International Union (SEIU) and unrepresented employees will receive a 4% COLA effective January 1, 2018. Offset against these increases, CalPERS Tier 1 (Traditional) employees will begin a CalPERS giveback contributing 1.5-2% of their pay depending on their bargaining unit. Within these agreements, employees will be paying their share of CalPERS retirement by the end of the current contact term. All other RPU employees hired after June 7, 2011 have been paying their share upon hire.

 

What the cost of service for one unit (one hundred cubic feet, or "CCF") of RPU water?

The cost of service for each individual customer class differs depending on their demands on the system. The Water Cost of Service Study provides a detailed review of the cost of service for each customer class, and how those costs are allocated through the proposed rates. The Study is available for download on RPU's Rate Plan and Public Meeting Documents webpage.

 

Are RPU employees prepared to take a pay cut?

RPU management is not proposing salary cuts unless justified by market conditions. RPU is an enterprise that relies on the expertise of its professional staff. It is financially prudent for RPU to maintain salaries that are comparable to other municipal utilities; otherwise, RPU will invest in training new employees only to lose them to cities that pay better. Utility employees are often required to work in dangerous environments, as well as on nights and weekends when responding to outages and emergencies. The rate plan proposes not to hire any additional employees over the next 10 years, and to instead ask existing staff to continue doing more with less by working smarter, using new technologies, and (for management) working longer hours without additional pay.

 

Please provide clarity on the Hillwood property, the lease of which provides the potential for $45 million in additional revenues over time.

The Hillwood property, located in San Bernardino, was purchased by the utility in the past for its water rights. RPU no longer needs the land for water rights and can lease it for other uses. RPU believes leasing the property will provide greater long-term revenue, including ownership of a building on the property at the end of the 55-year lease.

 

What is RPU's monthly delinquency rate for unpaid bills?

RPU's delinquency rate is 0.2% for electric and 0.1% for water.

 

Would it be possible to extend the rate increase from five to seven or eight years to lessen the sticker shock?

RPU appreciates this recommendation, and it will be reflected in RPU's revised rate proposal to the Board of Public Utilities and City Council on November 28.

 

Will new development over the next ten years have a positive or negative impact on rates?

RPU is obligated to serve all new developments. Staff projects system capacity needs for the next 25 years based on growth projections in the City's General Plan. New developments are required to pay a development fee which provides funding for system capacity expansion to serve the new demand.

 

Are commercial customers impacted in same way by the rate increases as residential customers?

Yes.

 

If you hire contract labor, do you have to use prevailing wage?

Cities are required by law to pay prevailing wage.



Rate Design

 

What's the difference between fixed costs and variable costs?

Fixed costs represent costs that RPU incurs regardless of how much electricity or water we sell. Fixed costs include things like infrastructure maintenance, labor, and debt payments. In contrast, variable costs are directly related to the amount of electricity or water we sell. Examples of variable costs include purchased electricity, transmission access fees, and water pumping and treatment. Approximately 60% of RPU's electric costs and 90% of RPU's water costs are fixed.

 

What is the Reliability Charge? Why is it needed? Will it go away?

The Reliability Charge recovers RPU's costs associated with building a second point of interconnection to the state electrical grid and internal natural gas generation plants to meet summer peak energy needs. Riverside is a large, growing city and a regional center, yet it only has one connection to the state electric grid. Our current demand for electricity exceeds the capacity of that connection, requiring internal power generation. A second connection to the grid will ensure reliability and avoid future blackouts. The Reliability Charge is currently paying off a $200 million debt for building four natural gas power plants over 30 years, as well as costs associated with establishing the second interconnection. The rate plan will not change how the Reliability Charge is used. Residential customers and most commercial customers will not see any change to their Reliability Charge. Commercial time-of-use customers will be switched from a flat Reliability Charge to one that is tiered based on demand.

 

What is the Network Access Charge, and why is it needed?

The Network Access Charge is a new charge designed to recover part of the costs for maintaining RPU's electric distribution system. The electric distribution system has been built to serve all RPU customers and is a fixed cost to RPU. These costs have historically been included in the energy charge which is based on usage (i.e., variable, not fixed). The Network Access Charge is designed to be a more fair and transparent way to recover these fixed costs.

 

We've got all these different [electric] charges. Is there anyone not getting charged any one of these charges? Why can’t we have just one charge?

RPU has and will continue to consider the structure of its electric charges to ensure they are assessed fairly and equitably across all customer classes and usage levels. The Customer Charge is flat and the Reliability Charge is based on the size of the customer's electrical panel. The new Network Access Charge has three tiers based on demand, with higher users paying more. Someday RPU may propose combining all of these charges into one fixed charge, similar to telecommunication utilities, but we are not proposing this in the current rate plan.

 

What’s the difference between the Network Access Charge, the Customer Charge, and the Reliability Charge?

The Network Access Charge recovers part of RPU's costs for maintaining the electric distribution system. The Customer Charge recovers customer-related costs such as meter reading, billing, and customer service. The Reliability Charge recovers RPU's costs associated with building a second point of interconnection to the regional grid and internal natural gas generation plants to meet summer peak energy needs. Together with a Demand Charge for larger commercial and industrial customers, the Network Access Charge, Customer Charge, and Reliability Charge are designed to recover 31% of RPU's fixed costs by the fifth year of the rate plan (currently, fixed charges recover only 23% of RPU's fixed costs). For an explanation of all utility bill charges, please visit our Understanding Your Bill page.

 

With our climate, my bill really goes up in the summer. How will the rate plan help me?

The proposed rate plan will expand the residential summer electric rate from 3 to 4 months, from June through September, allowing customers to benefit from more generous summer tiers and reflect summer weather and usage patterns.

 

How will the proposed rates encourage conservation and sustainability?

RPU's rates are structured to fairly allocate costs and meet California state law requirements. In general, the lower tiers cover costs associated with serving the basic needs of RPU's electric and water customers, while revenues generated by the higher tiers pay for more expensive sources of supplies. The tiered rate structure encourages residential customers with high energy and/or water use to reduce consumption, especially during hot (peak use) periods from June through September. In addition, the Network Access Charge is based on a customer's energy usage; the less energy a customer uses and the lower their demand on the system, the lower the charge.

 

Why did RPU not lower its residential Tier 4 rate when it stopped importing water?

RPU tiers its rates to allocate the cost of resources purchased to meet peak demand, such as the cost of imported water or the cost of building facilities to avoid buying imported water, to the upper tiers. In order to avoid importing water from northern California, RPU undertook several projects that provided for more groundwater production and better facilities to move water to higher elevations. As a result, RPU was able to stop taking imported water in 2008. However, RPU needed to fund these capital projects with Tier 4 revenues.

 

If RPU moves to remote meter reading, will the [water] meter charge go away?

The water meter charge helps recover a portion of the fixed costs of operating the water system.RPU plans to roll out advanced meters first to low-income customers, then to other customers as funding allows. In addition to reducing RPU's meter reading costs, advanced meters help reduce customer water bills by catching leaks.

 

Why is RPU changing both its water rates and reducing the allocation for each tier?

The rate plan proposes reducing from four to three tiers for residential water customers, and to reduce the allocation in the first tier, to better align with RPU's water cost of service and state efficiency standards.

 

How can I be charged $2.50 for water used in a month yet have a $42 sewer charge? Don't some cities base sewer charges on water use?

The sewer charge is not part of the current rate proposal, which only covers electricity and drinking water services. Riverside's wastewater collection and treatment system is managed by the Public Works Department. Information on the sewer system, including sewer service monthly rates and the 2014 Capital Improvement Program and Rate Development Study, can be found on the Public Works website.



Agricultural Customers

 

Has RPU considered what will happen to Riverside's agriculture and the Grow Riverside movement if the proposed increases to agricultural rates are approved?

The rate plan proposes to transition 197 RPU customers who are on Irrigation Metered Service (WA-3) and Grove Preservation Service (WA-9) rates to residential or commercial/industrial rates, as applicable, over five years. RPU held a community meeting on October 30 specifically to discuss proposed changes to WA-3 and WA-9 grove rates. State law (Proposition 218) does not allow subsidies between different customer classes. RPU plans to propose the formation of a task force to assist RPU in identifying opportunities to support agriculture consistent with state law. A summary of the October 30 community meeting, including customer comments, is available for download on RPU's Rate Plan and Public Meeting Documents webpage.

 

What will happen to the Gage Canal if the WA-3 and WA-9 rates are changed?

The Gage Canal is a separate entity and is not used to serve customers on the WA-3 and WA-9 rates. RPU customers who have access to the Gage Canal are placed on the Greenbelt Irrigation Service (WA-8) rate. The Gage Canal will continue to provide irrigation water service to Gage Canal Company shareholders and RPU customers on the WA-8 rate.

 

Can RPU provide customers with Gage Canal Company shares?

Under a stipulated judgment, the Gage Canal Company froze the number of its shares. Consistent with Water Rule 16, shares owned by the City of Riverside cannot be transferred to RPU customers. However, RPU can provide Greenbelt customers with access to Gage Canal water (equal to two shares/acre) at the Greenbelt Irrigation Service (WA-8) rate, which is the same as the cost of water to shareholders plus a small ($9.92) monthly billing service fee

 

Are agricultural customers able to drill wells?

Yes, there is no restriction against drilling wells and accessing groundwater. Customers overlying the Arlington Groundwater Basin (roughly west of Adams Street) will be subject to requirements of the new Arlington Groundwater Management Agency. Customers overlying the Riverside South Groundwater Basin (roughly east of Adams Street) must report production under the Western Groundwater Adjudication.

 

Does Gage Canal water go through a treatment process for drinking water?

Yes, about 80% of Gage Canal water is sourced from wells, pipelines, and treatment plants that meet drinking water standards.

 

How much will this increase to WA-3 and WA-9 rates benefit RPU financially?

The current difference between WA-3 and WA-9 rates and cost of service rates for residential and commercial/industrial customers is roughly $750,000 per year. The rate plan proposal is to gradually transition WA-3 and WA-9 customers to cost of service rates over a five-year period.

 

Is Riverside selling Gage Canal water to Western Municipal Water District?

No.

 

I have a residence with a grove. Does RPU distinguish between water for the house and for the grove? It may be more fair to treat them separately by installing separate meters.

Currently, RPU treats both uses the same if they are off the same meter. RPU understands and appreciates this idea of dual metering, and will investigate it with the assistance of the proposed agricultural rates task force.

 

Couldn't Riverside's agriculture help RPU receive Cap and Trade funding by capturing greenhouse gasses?

RPU understands and appreciates this idea, which will be investigated by RPU with the assistance of the proposed agricultural rates task force.



Solar Customers

 

Are rates changing because so many RPU customers are taking advantage of solar?

No. The proposed rate increase is driven by increasing costs and the need to replace aging infrastructure.

 

I am in the process of installing a solar system - will I have to pay for this rate increase?

How much a solar customer pays under the proposed rates will depend on their Net Energy Metering agreement. Solar customers, like all other customers, are required to pay monthly fixed charges (Network Access Charge, Customer Charge, and Reliability Charge) in order to maintain the electric delivery network on which all RPU customers depend. However, the Network Access Charge will be based on a customer's net energy usage, which may benefit solar customers who reduce their energy use.

 

Are solar rebates still available?

Yes, but they expire on December 31, 2017. Customers who apply for a solar rebate before then will have 18 months to install their solar panels.



Customer Assistance

 

Are there other ways I can save on my bill?

Energy and water conservation measures are the easiest way to save money on your bill. RPU offers a large number of rebate programs that can assist customers in using less energy and water. Customers can pick up a free energy and water conservation kit at a customer service center to get started. There are also LED light bulb rebates that will help lower your bill for a minimal investment. Replacing 10 incandescent bulbs with LEDs can save up to $7 per month and the bulbs last up to 20 years.

 

I am a low-income customer on a fixed income. How can RPU help me?

Qualifying low-income customers can receive $150 towards their bill per year through the SHARE program, as well as a refund of their Reliability Charge (typically $10 per month). RPU also offers low-income customers a no-cost energy and water home audit with free measures including LED light bulbs, heating and cooling system tune-ups, smart power strips, and refrigerator replacement and recycling. Finally, RPU assists low-income customers with solar installations through reimbursement of permitting fees. For more information on RPU assistance programs, please visit our assistance programs page.

 

What tools and resources are available to help better manage my monthly bill?

RPU offers a variety of tools to help customers manage their monthly bills. These include an online "audit" that helps customers find where they use energy and water in the home and identify ways to save. RPU also offers energy and water rebate programs to help customers purchase more efficient appliances. For tips and information on how customers can use energy and water more efficiently, visit GreenRiverside.com.

 

Does RPU offer discounted rates to utility employees?

No. RPU employees who are also RPU customers pay the same rates as all RPU customers, without exception.

 

Is RPU meeting with commercial customers?

RPU is meeting regularly with the Greater Riverside Chambers of Commerce and each of the city's area business councils to address questions and concerns from Riverside's business community.

 

Are rebate programs applicable to commercial?

Yes, RPU offers 20 commercial rebates and incentive programs. Please visit RPU's Business Rebates page for more information



Governance

 

When will my bill change?

The first rate adjustment will appear on bills starting in April 2018. Subsequent annual rate adjustments will appear on bills after January 1 of each of the following four years (2019 through 2022, respectively).

 

How can I learn more and provide comments on the proposed rate increase?

RPU is hosting community meetings across the city to explain the rate proposal and receive comments. Additional questions will be addressed through updates to this FAQ. All customers comments and questions will be submitted to the Board of Public Utilities and City Council.

 

Will the inflation-based rate increases in years 6-10 include the opportunity for public review and comment?

Yes.

 

Is the City of Riverside planning on taking over Western Municipal Water District?

No.

 

Does this rate proposal still have to be approved by City Council?

Yes. Riverside's City Charter gives the Board of Public Utilities the authority to propose utility rates, which are then either adopted or rejected by the City Council.

 

Are there more opportunities to address the Board of Public Utilities about the rate proposal?

The Board of Public Utilities meets on the 2nd and 4th Mondays of the month at 6:30pm in the City Council chambers. The public is welcome and invited to attend these public meetings and address the Board on all topics that relate to Riverside's electric and water utilities.

 

Will the information to be presented at the November 28th workshop be available prior to the meeting?

Yes, all public meeting information will be publicly posted 12 days before the meeting.

 

What is the role of Proposition 218 in the rate-setting process? Does it require voter approval? What about Measure A?

Proposition 218, approved by California voters in 1996, imposes both substantive and procedural requirements for water rates. Substantively, the rates to provide such water service cannot exceed the cost to provide such service. If the rate exceeds the cost, then the City must seek voter approval for the amount in excess of the cost. The City did this in 2013, when Measure A asked voters to approve the water general fund transfer, which is a transfer of up to 11.5% of water utility gross revenues to the General Fund. Voters approved the transfer. Procedurally, Proposition 218 requires the City to provide written notice of a proposed rate increase to ratepayers. If a majority of the ratepayers protest the rate increase, in writing, then the City cannot adopt the rate increase.

 

Are the proposed rates based on an overall plan recommended by the City Council? Is there another plan being considered?

In 2015, RPU conducted a comprehensive master planning effort called "Utility 2.0" and developed four options for future infrastructure and other investments. The City Council requested that RPU develop a rate proposal for Option 3 and to obtain community feedback on the proposed rates. Based on community feedback, RPU will present to the City Council and Board of Public Utilities with a revised rate proposal on November 28, 2017.