Managing Rates & Charges

Managing Rates & Charges

The Water Authority took steps throughout the year to mitigate rate increases for calendar year 2013. Aggressive refinancing of the Water Authority’s CIP projects reduced debt costs. The Water Authority also worked with member agencies and motivated citizens to convince Metropolitan Water District of Southern California to reduce its 2013 rate increases. Finally, the Board mitigated the impact of increasing CIP debt service costs by accepting a lower senior lien debt service coverage ratio (the amount of net revenues available to pay debt service costs) for one year. 

Nevertheless, three factors drove higher rates for 2013. They were:

  1. Increased water supply and transportation costs from the Metropolitan Water District.
  2. Increased debt service costs necessary to pay for the Water Authority’s $3.5 billion investment in major new water infrastructure projects.
  3. An increase in the quantity and price of the Water Authority’s purchases of water supplies from the Imperial Irrigation District. 

More information on those drivers and the Water Authority’s cost-control measures is available here.

In June, following a six-week review period, the Water Authority Board approved wholesale water rates and charges for calendar year 2013. The total cost for municipal and industrial untreated water rose 9.6 percent from the 2012 rate. The treated water rate for 2013 rose 9.7 percent.