1,2,3,- Trichloropropane, commonly referred to as “TCP” is a synthetic organic chemical compound that was used in pesticides in the 1970s and 1980s and has been found in groundwater in California. On July 18, 2017, the State Water Resources Control Board adopted new standards that set a maximum contaminant level (MCL) of 5 parts per trillion for TCP allowed within domestic water systems.
Installing TCP treatment systems on any affected well in California will be very costly, and Vaughn Water does want the parties responsible for causing the TCP contamination, rather than our customers, to cover the costs of treatment. However, the State of California has given all affected water companies a very short time period to comply with the new regulation, and as such, our customers will bear the construction costs and operations costs of the TCP treatment systems until such time that we receive anticipated recovery costs from our pending litigation against the responsible parties, Dow Chemical and Shell Oil. We are looking to recover all current and prospective capital costs and operation and maintenance costs in a lawsuit pending since 2012.
In order to remain in compliance with State water quality regulations, the Company must have TCP treatment systems installed at all of our impacted wells in 2018. The cost to install the required equipment is very expensive and the Company will need to finance the project. This borrowing will require a substantial user rate increase to cover the new debt service payments. In addition to the TCP treatment capital costs, the ongoing operation and maintenance will also increase due to the new State regulation.
Effective January 1, 2018 the “monthly base rate” will increase for metered customers and flat rate customers (an increase of $10.17 for 1” metered connections). The tiered quantity rates for metered connections will also be adjusted resulting in an overall 24% rate increase. Equivalent rate adjustments were made to Flat Rate and Commercial accounts.
Vaughn Water Company directors and staff are committed to provide the finest quality water with outstanding service at the lowest price to you our customer. We will continue our efforts to keep our rates reflective of the costs of doing business today while preparing for future needs.
Vaughn Water Company