Decision adopted after significant policy changes were released just 48 hours before vote, raising serious concerns about transparency
From the California Water Association:
The California Water Association (CWA), representing regulated water providers serving more than six million Californians, today expressed deep concern over the California Public Utilities Commission’s decision to adopt significant last-minute revisions to a four-year rulemaking governing water system acquisitions. CWA said the changes establish a new regulatory precedent that creates uncertainty for voluntary consolidation efforts while being adopted without meaningful opportunity for stakeholder review.
The organization announced it is prepared to challenge the decision, arguing the Commission fundamentally misapplied established ratemaking principles while advancing a policy through a process that denied meaningful public participation.
“We are shocked that the Commission chose to adopt a significant new policy after giving affected communities, water providers, and stakeholders less than 48 hours to review and respond right before a holiday weekend,” said Jennifer Capitolo, Executive Director of the California Water Association. “After over 4 years of policy discussions, Californians deserved a transparent process, not a last-minute rewrite on a policy with far-reaching consequences for drinking water customers. We are prepared to challenge this decision through an application for rehearing at the CPUC.”
The newly adopted policy alters how the CPUC evaluates Gain on Sale in water system consolidations, creating uncertainty that CWA believes will discourage the voluntary consolidation of struggling water systems into better-resourced, specialized providers.
California has long relied on voluntary consolidation as a cornerstone of its strategy to improve safe, reliable drinking water in small, rural, and disadvantaged communities. Through the State Water Resources Control Board’s SAFER Program and related initiatives, consolidation has helped communities gain access to operational expertise, long-term infrastructure investment, and improved regulatory compliance.
CWA warned regulators that the proposal would undermine those efforts by making it significantly more difficult for consolidations to happen for communities that need it most.
“This decision is wrong for drinking water customers and wrong for ratepayers,” Capitolo said. “The Commission already possessed the authority to review transactions and prevent excessive gains where appropriate. Instead of strengthening oversight, today’s decision injects unnecessary uncertainty into a process California has relied upon for years to improve drinking water service.”
Beyond the substance of the decision, CWA criticized the Commission’s process, noting that the most consequential policy changes were introduced only days before the final vote despite the proceeding having been under consideration for over 4 years.
“When a state agency adopts significant policy changes without providing meaningful notice or an opportunity for public review, it undermines confidence in both the process and the outcome,” added Capitolo.
CWA is currently evaluating all available procedural and legal options and intends to vigorously challenge the Commission’s decision while continuing to advocate for policies that encourage investment in California’s drinking water infrastructure and expand access to safe, reliable water for communities across the state.
About the California Water Association
The California Water Association represents California’s regulated water providers, delivering safe, reliable drinking water to more than six million Californians while investing billions in water infrastructure, conservation, and environmental stewardship throughout the state.
