FINANCE AND ADMINISTRATION COMMITTEE
ITEM:		ACTION ITEM
7.	CONSIDER RECOMMENDATION TO THE BOARD TO FUND REBATES IN THE CALIFORNIA AMERICAN WATER SYSTEM BETWEEN JANUARY 1, 2024, AND THE AVAILABILITY OF FUNDING FROM THE CALIFORNIA AMERICAN WATER GENERAL RATE CASE
Meeting Date:			November 6, 2023	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 Finance and Administration Committee reviewed this item on November 6, 2023, and recommended _____________.
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. The current GRC ends on December 31, 2023. The decision on the 2024-2026 GRC (filed in July 2022) is anticipated in mid-2024. Rather than shutting the Rebate Program down and reducing the current momentum, staff is requesting the Board authorize advance funding from the General Reserve Fund to continue the program 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. Between January 1, 2021, until the GRC is approved with funding for the rebate program, Cal-Am will be collecting only interim rates and is unable to reimburse the District 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 funded since 2007.

The District will be funding rebate advances from its general reserve fund. Cal-Am will reimburse the District for the advanced rebates following GRC approval. If authorized by the Board, the District will process and pay rebates up to a maximum of $200,000 for the first six months of 2024 and invoice Cal-Am for the expenditures when/if they receive GRC approval. Funding for this reimbursable expenditure was not included in the 2023-2024 budget and will be included in the mid-year adjustment. If needed, funding for Fiscal Year 2024-25 will be included in the next budget cycle.

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 should recommend the Board approve interim funding up to $200,000 through June 2023 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

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