| Use Only the Finest Ingredients and Serve with a Smile | |
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Two major capital projects
planned for 2006 are a new membrane treatment plant in Bakersfield,
California, and renovation of an existing treatment plant in Lucerne,
California. Both projects will use state-of-the-art technologies to enhance
the quality of water we serve to our customers. Going forward, water quality
will continue to be a top priority for us, as we strive to meet every state
and federal water quality standard, every day, in every system. But customers require more than safe, high quality water; they also expect responsive customer service. So, when they told us that they wanted to interact with us online and pay their bills electronically, we responded with a new e-billing service that allows them to view and pay their bills on our web site. We will refine the program, which we introduced in September 2005, throughout the coming year. Also in 2006, we plan to provide our Customer Service Representatives with a new, comprehensive training program. And finally, we will expand our efforts to communicate with customers about the many things we do to ensure that when they turn on a faucet, they get what they expect. Helping customers understand the true value of water and the services we provide will be important, particularly as we continue to pursue fair and reasonable water rates. |
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| If Your Recipe Isn’t Turning Out Right, Keep at It—Persistence Pays Off | |
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Fair regulatory treatment is an
important ingredient for success for all regulated water utilities. For the
past few years in California, it was an ingredient that was in short supply.
Fortunately, we are beginning to see signs of an improved regulatory
climate. This improvement is partially due to changes at the CPUC, and
partially due to the persistence of our industry and our own Regulatory
Affairs team. Through the California Water Association (CWA), the investor-owned water utility industry has tepped up efforts to advocate for fair regulatory decisions. In 2005, CWA opened an office directly across the street from the CPUC in San Francisco and hired a seasoned, well-qualified Executive Director to promote the industry’s interests on a full-time basis. Even more important, our own Regulatory Affairs team has continued to work diligently for rates that accurately reflect the costs of providing water service. As a result, the CPUC issued timely decisions on the eight General Rate Cases filed in 2004, and we expect the same for the eight General Rate Cases filed in 2005. In 2006, we will file for eight more districts, with decisions expected in mid-2007. Our cautious optimism about the regulatory environment in California comes partly from the timeliness of the decisions being issued by the CPUC, and partly from the nature of those decisions. As we mentioned earlier, the CPUC has developed a Water Action Plan for California that is viewed favorably by the water industry. In addition, in 2005, the CPUC ruled that we had indeed managed our surplus property sales program in accordance with the Water Utility Infrastructure Act of 1995, as we had maintained. We expect the CPUC to issue a final ruling on how such gains on surplus property sales should be treated on an industry wide basis in the near future. With regard to another type of regulation, and one that is faced by all publicly traded companies, we continued in 2005 to take the steps necessary to comply with the Sarbanes-Oxley Act. We are pleased with our performance in this area, and are confident that we will continue to meet both the letter and the spirit of the law. |
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