New Surcharge: May 8, 2023
Beginning May 8, 2023, customers will see a new surcharge on their bill. This surcharge is for M-WRAM (Monterey-Style Water Revenue Adjustment Mechanism), an account that tracks the revenue received from volume charges.
The surcharge will be $0.3026/CCF. For an average user (11 CCF/month), customers will see an increase of $3.33 per month on their bill. This surcharge will last 12 months and is meant to recover the under-collected balance in the M-WRAM for the period of October 2020 to March 2023.
What is an M-WRAM?
Your water bill includes both a meter charge and a volume charge. The former recovers part of fixed costs such as pipes, tanks and wells. The latter is a volume charge to recover the cost of water and some portion of fixed costs.
Instead of charging a single rate for all usage, SJW has tiered rates to encourage conservation. Tier 1 is at a discount (lowest users), Tier 2 is at the uniform rate (average users), and Tier 3 is at a premium (highest users).
The M-WRAM tracks the difference between the revenue received for actual consumption through the tiered rate, and the revenue received through the uniform rate.
The chart below shows an example where 1,000 CCFs are used at a cost of $2,000 ($2/CCF). This is the average (uniform) rate. Tier 1 shows a discount (1.75), while Tier 3 shows a premium (2.25). If 300 units are used at Tier 1 and 200 units at Tier 3, the resulting under collection will be $25. This amount is recovered via a surcharge.
It’s important to note that this account tracks both the under and over collection of revenue based on consumption levels in Tiers 1 and 3 to ensure fairness to both SJW and our customers. If the premium received at Tier 3 is greater than the discount at Tier 1, there is a refund. The opposite is also true. If the discount at Tier 1 is greater than the premium at Tier 3, there is a surcharge. In the example below, the discount given was greater than the premium received, resulting in an under collection (surcharge).
The chart above is for illustrative purposes only. It's a simplified example of the complicated rate-making process. It is an illustrative example from a company-wide perspective vs. an individual customer. Rates and tiers do not reflect actual SJW rate tiers.
It’s important to note that this account tracks both the under and over collection of revenue based on consumption levels in Tiers 1 and 3 to ensure fairness to both SJW and our customers. If the premium received at Tier 3 is greater than the discount at Tier 1, there is a refund. The opposite is also true. If the discount at Tier 1 is greater than the premium at Tier 3, there is a surcharge. In the example above, the discount given was greater than the premium received, resulting in an under collection (surcharge).