ITEM:		CONSENT CALENDAR
3.	CONSIDER CONTINUING REBATE FUNDING FOR CALIFORNIA AMERICAN WATER CUSTOMERS UNTIL APPROVAL OF THE GENERAL RATE CASE
Meeting Date:			June 17, 2024	Budgeted:	Yes
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 Finance and Administration Committee reviewed this item on June 10, 2024, 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 Peninsula’s highly successful water saving rebate program is primarily funded by customer collections that are renewed as part of Cal-Am’s General Rate Cases (GRC) every three years. A decision on the 2024-2026 GRC (filed in July 2022) is anticipated in September 2024, and the District has been front-funding rebates since January 2024. Rather than shutting the rebate program down and reducing the current momentum, staff is requesting the Board continue to authorize advance funding from the General Reserve Fund until Cal-Am’s GRC is approved and funds are available. The District has prefunded rebates in the past three GRCs while awaiting the final decision.

The pending GRC includes $1.1 million in rebate funding for the Monterey Peninsula for the next three years (2024-2026). From January 1, 2024, until the GRC is approved with funding for the rebate program, Cal-Am is only collecting interim rates and is unable to reimburse the District for rebates until final approval of the GRC. Although there is a slight risk that rebate funding will not be approved by the CPUC, the program has been approved for funding since 2007.

Rebates are currently being funded from the District’s general reserve fund. Cal-Am will reimburse the District for the advanced rebates following GRC approval. If authorized by the Board, staff will process and pay rebates up to a maximum of $200,000 for the first six months of FY 2024-25 and invoice Cal-Am for the expenditures when/if they receive GRC approval.

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), staff recommends the Board authorize interim funding.

RECOMMENDATION: The Finance and Administration Committee recommends the Board approve interim funding up to $200,000 from July 1 through December 2024 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.

EXHIBIT

None

U:\staff\Boardpacket\2024\06172024\Consent Calendar\03\Item-3.docx