September 30, 2022
The California Water Efficiency Partnership (CalWEP) is pleased to share that Senate Bill 1469, co-authored by Senators Steven Bradford and Josh Becker, has been signed into law by the Governor. This legislation authorizes the California Public Utilities Commission (CPUC) to allow investor-owned water utilities to adopt a “decoupling” mechanism, an important step in aligning financial policies with California’s water conservation goals.
What is Decoupling?
Decoupling separates a utility’s revenues from its water sales. Historically, investor-owned water utilities have faced challenges when implementing aggressive water conservation programs, as reductions in water use often result in revenue shortfalls. By allowing decoupling, SB 1469 provides utilities with a financial tool that ensures revenue stability while still encouraging robust conservation efforts.
This policy approach has been successfully applied to energy utilities in California, and its extension to water utilities addresses a similar need for balancing revenue stability with conservation goals.
A Step Forward for Water Conservation
The passage of SB 1469 represents an incremental but meaningful improvement for investor-owned water utilities and the communities they serve. By removing a financial disincentive, the bill supports utilities in advancing water-saving programs during a time when California’s long-term water security is a priority.
While this policy change won’t solve all challenges associated with water conservation, it’s an important tool to help utilities contribute to the state’s broader conservation efforts.
Looking Ahead
With the Governor’s approval, SB 1469 will now move into the implementation phase under CPUC oversight. CalWEP looks forward to supporting its members in understanding and navigating this new mechanism and will continue advocating for policies that make water efficiency and conservation more attainable across California.
CalWEP extends its thanks to Senators Bradford and Becker for championing this bill and to the Governor for signing it into law. As we continue to face ongoing water challenges, collaborative and practical approaches like decoupling help create a more sustainable future for California.