ITEM:		ACTION ITEM
16.	CONSIDER RECOMMENDATION TO THE BOARD TO FUND REBATES IN THE CALIFORNIA AMERICAN WATER SYSTEM BETWEEN JANUARY 1, 2021 AND THE AVAILABILITY OF FUNDING FROM THE CALIFORNIA AMERICAN WATER GENERAL RATE CASE
Meeting Date:			December 14, 2020	Budgeted:	No
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Locke	Cost Estimate:	$200,000
General Counsel Review: N/A
Committee Recommendation: The Water Demand Committee reviewed this item on December 3, 2020 and recommended approval. The Administrative Committee reviewed this item on December 8, 2020 and recommended approval.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: The District and California American Water’s (Cal-Am) Rebate Program is funded through a customer surcharge that is renewed as part of Cal-Am’s General Rate Cases (GRC) every three years. The 2018-2020 GRC ends on December 31, 2020. The decision on the 2021-2023 GRC (filed in July 2019) is anticipated in mid-2021. Rather than shutting the Rebate Program down and reducing the current momentum, staff is requesting the Board authorize advance funding to continue the program until Cal-Am’s GRC is approved and funds are available. The Rebate Program significantly contributes to reduced water consumption on the Monterey Peninsula.

The pending GRC includes a request for $1.1 million in Rebate funding for the Monterey Peninsula for the next three years. Between January 1, 2021, until the GRC is approved with funding for the Rebate Program, Cal-Am will not be collecting the conservation surcharge that funds the rebate program and is unable to reimburse the District for Rebates. Although there is a slight risk that Rebate Program funding will not be approved by the CPUC, all previous requests for funding for the Rebate Program have been approved since 2007.

The District will be funding rebate advances from its general reserve fund. Cal-Am has agreed to reimburse the District for the advanced rebates once collection of the conservation surcharge is resumed. If authorized by the Board, the District will process and pay rebates up to a maximum of $200,000 and invoice Cal-Am for the expenditures when/if they receive GRC approval. Funding for this reimbursable expenditure was not included in the 2020-2021 budget and will be included in the mid-year adjustment.

The District/Cal-Am Rebate Program is credited with a significant portion of the water savings since the Cease and Desist Order in 2009 (savings are reported monthly in the Water Conservation Program Report). The program offers extensive and generous rebates that motivate customers to purchase and install water efficient appliances. Shutting the program down until funding is available would negatively impact the community and the vendors. In 2011, the program was suspended awaiting the 2012 GRC approval. Once funding became available, it took approximately 18 months to achieve current participation levels. Given the urgency of conservation and the Cease and Desist Order (CDO) milestones, staff recommends the Board authorize interim funding.

RECOMMENDATION: The Board should approve interim funding up to $200,000 through June 2021 for the Rebate Program from the District’s general reserve fund. District expenditures for Cal-Am customers will be reimbursed by Cal-Am when a rebate fund is approved in the GRC and collection of the conservation surcharge resumes.

EXHIBIT

None

U:\staff\Boardpacket\2020\20201214\ActionItems\16\Item-16.docx