1. 1 Water Utilities Update Low-Income Oversight Board Division of Water and Audits Rami Kahlon, Director August 19, 2015

2. Water Utilities Topics –Drought Update –Customer impacts –Participation Rates –Water Action Plan 2

3. 3 Drought Update –April 1, 2015 – Governor Brown Executive Order Calling for a 25% reduction in potable urban water use –May 5, 2015 - State Water Resources Control Board Emergency Regulation adopted –Targeted reductions for the top 411 water agencies –4% to 36% reductions based on July – Sep 2014 reported figures –Base year 2013 –Effective June 1, 2015 Requires Monthly Monitoring of Water Use –April 2015 – 13.5% reduction –May 2015 – 29% reduction –June 2015 – 27.3% reduction

4. 4 Drought Update –May 7, 2015 - California Public Utilities Commission Resolution W-5041 Orders compliance with State Board EO Must file Schedule 14.1 to implement Mandatory Rationing –Class A and B utilities –Reservoir Levels – August 2, 2015 Shasta – 43% (of capacity) Oroville – 32% (of capacity) Folsom – 28% (of capacity) “Godzilla” El Nino may – or may not – materialize.

5. 5 Low-income Ratepayer Impacts –Schedule 14.1 Mandatory Rationing In place now for Class A and B utilities Drought Surcharges for Low-income ratepayers –50% reduction for over use »Mostly automatic »One case, customers may apply for –No distinction made Appeal provisions More protests / concerns are being expressed from higher users. But IOU customers are stepping up and meeting their water use reductions.

6. 6 Low-Income Programs All large (Class A) water utilities offer low-income bill assistance programs About 250,000 CPUC-regulated residential water customers participating in income water assistance programs Huge increase in participation rates in 2013 Auto enrollment program with data exchange between the energy and water utilities March / September data runs Low-income programs for water started in 2006.

7. 7 Low-Income Program Participation Program participation is leveling off

8. 8 Water Action Plan –Assist Low Income Ratepayers 1.Track service shut offs –Payment options 2.Work with LIOB 3.Develop Standardized Tariff Discounts –Rulemaking 4.Increase Penetration Rates 5.Enhance Website Addressing low-income concerns has been a priority for the Commission.