The Public Service Commission (PSC) is going to allow the City of Lodi to recover the cost of the unapproved $1.8 million booster station project through resident’s water bill.
The PSC voted May 23 to allow the recovery of the cost of the project in the city’s current water rate case, which will be paid through the help of Lodi’s 1,329 metered customers. The city previously began construction on a west side booster station in April of 2017, which resulted in a reprimand and a referral to the state attorney general after failing to obtain a certificate of authority.
The city built the booster station for the new primary school and residential development in order to supply an adequate level of water pressure to the area. Lodi determined the previous two pressure zones would not be satisfactory.
Lodi submitted an application for authorization to build the booster station on March 20 of 2018 to the PSC. The project’s engineer consultant, MSA Professional Services, advised the city the construction of the booster station could not start until they received authorization.
However, due to the time constraints for the project, the city began construction before approval. In response to a list of questions from the PSC, the City of Lodi said “the consultant indicated to the City they were hopeful the merits of the project, the project schedule and the request for construction authorization would have resulted in an expedited review and issuance of authorization.”
The PSC opened their investigation into the project on Aug. 8 after the booster station was built. An investigation from the PSC determined the cover letter for the request for authorization did not request expedited review. The booster station was placed into service on Aug. 28.
According to a memorandum from the PSC staff, they indicated that the booster station was necessary to “ensure adequate and reliable service for present and future water demands on the west side of Lodi.”
In a letter to the Division of Water, Telecommunications and Consumer Affairs, Lodi indicated they would also need the extra revenue to fund their main replacement program, which replaces old and undersized mains that contain lead joints and service laterals. The city noted they needed to recover the cost of the booster station because the main replacement program would deplete cash reserves to
“dangerously low levels.”
Although Lodi has not had compliance issues in the past, the commission did express concern for the city’s deliberate actions to build the booster station during their investigation. The commission voted to allow the recovery of costs 2-1.
According to a memorandum, the PSC has opened 18 investigations into unauthorized construction since 2017, and they have allowed recovery in the majority of cases.
The City of Lodi delivered a letter to the PSC in January with a list of procedural steps they will take following the letter of reprimand they received. The letter includes measures the city will implement to avoid a recurrence of similar noncompliance issues.