Sierra City Water Company Proposes 60% Rate Hike

SIERRA CITY — Sierra Water Resources, Inc., joined by representatives from the California Public Utilities Commission (CPUC), presented details on a proposed rate increase exceeding 60% during a community meeting on Thursday. The plan affects roughly 120 customers served by the gravity-fed system. Under the proposal, the monthly base service charge for a 5/8x3/4-inch meter would increase from $79.88 to $119.45. Customers with a 1-inch meter, required for fire sprinklers in new construction under state rules, would see charges rise from $199.70 to $298.63 before any usage. Water consumption rates per 100 cubic feet—equivalent to about 750 gallons—would climb from $2.49 to $6.50.

Larry Morales, chief executive officer of Sierra Water Resources, addressed an emotional crowd of about 50 people gathered in the Sierra City Community Hall. He outlined the need for higher rates, noting that the company has operated at a loss since he acquired it in February 2024. At that time, the aging infrastructure included multiple active leaks, all of which company staff have since repaired. In several instances, crews replaced full sections of pipe rather than applying temporary fixes, actions classified as capital improvements to prolong the system’s useful life. Morales indicated that, based on its expenditures, the company projects annual losses of approximately $20,000.

Several attendees expressed frustration over the lack of advance notice for both the rate proposal and the meeting itself. Although the company sends monthly bills, many residents reported not receiving their August statements, which included the required public notice. Morales acknowledged delivery problems and attributed some delays to the local postmaster, who he accused of attempting to withhold mailings. The postal service investigated the matter after Morales raised concerns, and no bills were returned as undeliverable. One resident countered, however, that returned mail can take weeks to arrive, casting doubt on the explanation.

Community members also raised issues with how the notice was handled at the post office. They described a pattern where the document appeared on the bulletin board only to be removed repeatedly. Accusations surfaced that company employees had taken it down, though Morales rejected those claims outright. A number of people learned about the notice after the formal protest period had ended, preventing them from submitting timely objections. Morales responded that he had accepted every letter received, irrespective of its date.

Beyond notification challenges, residents questioned the scale of the proposed increase relative to the company’s actual expenses. They pointed out that Morales had conducted personal inspections of the system prior to the purchase, suggesting he should have anticipated major repair needs. Once those initial fixes are complete, participants argued, ongoing maintenance costs should drop considerably in the coming years. Proponents of a smaller adjustment urged the company to gather more operational data over an additional two or three years before seeking such a substantial hike. This approach, they contended, would yield a more accurate picture of long-term needs.

During the discussion, residents appealed directly to CPUC staff about the financial strain on their households. Many customers are retired individuals on fixed incomes who may struggle with the higher charges. Speakers compared proposed rates to those of nearby providers, emphasizing that Sierra Water Resources would charge the area’s highest amounts by a wide margin. For instance, Whitehawk Ranch, previously referenced in CPUC reviews, maintains a base charge of approximately $72 per month and $1.25 per 100 cubic feet. Morales highlighted differences among water systems statewide, but attendees noted the local gravity-fed setup incurs lower baseline operating costs than pumped alternatives.

As the two-hour meeting progressed, the tone softened, with several participants praising improvements in service under Morales compared to prior ownership. They affirmed support for the company’s long-term viability while emphasizing that the proposed jump in rates felt abrupt, overwhelming, and opportunistic. Morales committed to reviewing public input before finalizing the application.

The gathering marked the opening phase of a multi-step approval process overseen by the CPUC, given the magnitude of the increase. Commission staff recorded comments throughout the evening to guide their analysis and draft resolution. If a resolution advances, another 20-day window will open for additional public feedback. Customers who signed the service list at the meeting will receive copies of any draft document.