Water Authority approves basic rate increase $5 per acre-foot increase to enhance region’s water reliability

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Water Authority approves basic rate increase $5 per acre-foot increase to enhance region’s water reliability
May 24, 2001

In a move aimed at ensuring a reliable water supply for the San Diego region, the San Diego County Water Authority’s board of directors today voted to increase the basic cost of water to its member agencies by $5 per acre-foot. The rate increase, which will take effect Jan. 1, 2002, was necessary to help fund the Authority’s $1.21 billion Capital Improvement Program. The CIP includes new pipeline projects, pumping facilities and the Emergency Storage Project (ESP). The ESP is a 12-year, $827 million project to construct a system of reservoirs, pipelines and other facilities that will help meet the region’s emergency water needs well into the 21st century. “This small, but necessary, increase ensures the Water Authority will have the capital to fund its long-range projects, and is consistent with the Authority’s long-range financing plan,” said James Turner, chairman of the Water Authority board.

“It will help us ensure a safe and reliable supply of water for the county by investing in our infrastructure for the future.”

The increase would raise the Municipal and Industrial (M&I) commodity water rate from $90 to $95 per acre-foot. This would be the first increase in this rate since January 1, 2000. The increase is in line with the Water Authority’s long-range financing plan, which calls for a $5 per acre-foot increase in the M&I commodity rate each year until 2009.

“The gradual rate increases programmed under our long-range financing plan are intended to ensure our customers are not exposed to water rate spikes,” said Turner. “And although the increases are programmed, they are not automatic; last year, when it was apparent that we could meet our planned needs and avoid spikes, no rate increase was implemented.” “It’s important to also note that when we have collected revenues in excess of our needs, as was the case last year, we promptly refund them to our member agencies”.

One acre-foot of water is approximately 326,000 gallons, enough to supply the needs of two typical households for a year. The revenue increase will generate

$2.4 million based on projected water sales of 482,325 acre-feet for calendar year 2002.

The current Special Agricultural commodity charge is $80 per acre-foot and will remain the same for the next year. This rate is for agricultural customers who pay a lower rate, but agree to be the first to be cut back if there is a shortage of water supply.

Also remaining unchanged are the Infrastructure Access and Standby Availability charges and the continued pass-through of the Metropolitan Water District’s (MWD) Readiness to Serve and New Demand charges.

The San Diego County Water Authority is a public agency serving the San Diego region as a wholesale supplier of water from Northern California and the Colorado River. The Water Authority works through its 23 member agencies to provide a safe, reliable water supply to more than 2.9 million county residents.

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