Sound and Stable Utilities

Having well-run, reliable, low-cost, city-owned utilities has proven an economic advantage throughout Roseville’s development. With Roseville being a full-service city, the key infrastructure decisions are under the control of a single entity. This makes the development process more streamlined and reliable, allows the City to focus on keeping rates among the lowest in the region, and makes the protection of these assets a high priority. In FY2014-15, our concern will focus on water reliability issues related to the drought and the Bay Delta Conservation Plan, legislative advocacy regarding new laws and regulations that affect the operations and costs of running the City’s electric, water, wastewater, and solid waste utilities, and investment in infrastructure to continue our utility services.

Water reliability

The drought declared in early 2014 underscored the need to address California’s water supply challenges. Staff is developing a long-term strategy to ensure Roseville’s water reliability, and the focus remains on regulatory change and water infrastructure investment. A high level of certainty regarding water supplies is the key to investment in our region – leading to economic growth, more jobs, and a rise in our region’s standard of living.
To complicate this challenge even further, municipalities and water agencies are encumbered with a state and federal water regulatory framework that lends to inconsistent decision making, unbalanced waterway flows and inflexible water quality standards.
Roseville continues to take a proactive stance on issues that affect our water supply to ensure that our community’s and our rate payers’ interests are protected and promoted in ensuring water reliability.

Rate cases

While Roseville residents and businesses enjoy utility rates that are among the lowest in the region, in FY2014-15, the utilities will begin rate studies to ensure rates cover operational costs. At the City Council’s direction, the utilities undertake these studies every two years with the intention of having smaller, more frequent adjustments that align with costs and give customers more reliable projections as they plan and budget. Any recommended rate adjustments would occur in FY2015-16.

The electric, water, wastewater and solid waste utilities have seen success with their conservation and recycling efforts and have seen decreased demand in some areas due to the weak economy.  That is accompanied by increases in expenses directly tied to state regulations, including new electric regulations requiring a diverse portfolio of renewable energy sources, new definitions of what constitutes a renewable energy source, new requirements for stormwater permits, and potential additional expenses related to legislation involving organic waste, among other issues. As those costs continue to put pressure on the utilities and its customers, the City is working its legislative and regulatory avenues for clarification and relief. The City is a member of several legislative advocacy groups on the regional, state and federal level that combine the strength of their unified voice to advocate for utility customers.

The drought will add to costs for the water utility as it fast tracks construction to enhance supply and adds staffing to promote conservation efforts among its customers.  As those costs increase, revenues from sales will go down since the City has required water cutbacks from its customers.  A slight rate increase for electric customers is also a result of the drought.  Since the less expensive hydro energy is not available, the electric utility must purchase more expensive forms of power for its customers.

New rate cases will consider these impacts on costs and revenues and also take into account the proactive rehabilitation of infrastructure to ensure both reliability in supply and consistency in rates.