Water Authority Increases 2009 Water Rates to Secure Water Supply Reliability

Short Title
Water Authority Increases 2009 Water Rates to Secure Water Supply Reliability
Higher Supply Costs Drive Increased Water Rates
June 26, 2008

Faced with additional costs sparked by growing water supply challenges, the San Diego County Water Authority Board of Directors today approved an 11.9 percent increase in wholesale treated water rates and charges and a 15.0 percent increase in untreated water rates and charges. The new rates will become effective January 1, 2009.

Drought conditions in California, limited water supplies from the Colorado River and court-imposed restrictions on pumping in the Bay-Delta have reduced imported water deliveries from the State Water Project are the driving forces behind increased supply costs.

The Water Authority’s increase follows the Metropolitan Water District of Southern California’s 14.3 percent increase in the cost of treated water and 17.4 percent increase for untreated water to its member agencies. MWD currently supplies up to 80 percent of the water to the San Diego region.

“These rates and charges are necessary to continue diversifying our water supply portfolio, improve water supply reliability and complete vital infrastructure projects to meet the needs of our 3 million residents and $163 billion economy” said Fern Steiner, Water Authority Board Chair.

The Board approved an overall treated water rate increase of $82 per acre-foot (to $766 per acre-foot for 2009, up from $684 in 2008) and a $78 per acre-foot increase for untreated water (to $598 for 2009, up from $520 in 2008) based on projected water sales and fixed charges. (An acre-foot of water is enough to provide for the needs of two average families of four for a year.) The Water Authority is mitigating the rate increase by using reserves including a significant draw from its rate stabilization fund.

Rate impacts to individual retail water agencies will vary based on their water purchases in 2009. Regionwide, the Water Authority estimates that the rate increase’s impact on the average household’s monthly water bill will be $3.42.

The Water Authority and its 24 member agencies are implementing a number of plans and programs to increase long-term water supply reliability. For example, this year the Water Authority’s water transfer with the Imperial Irrigation District and supplies from canal lining projects will provide San Diego County with more than 81,000 acre-feet of water. By 2011, the water transfer and canal lining projects in Imperial County will provide more than 160,000 acre-feet of water. By 2021, they will provide 280,200 acre-feet annually.

The Water Authority and its member agencies also are making significant investments in developing new local water supplies such as groundwater, recycled water and seawater desalination that will reduce the Water Authority’s dependence on Metropolitan water supplies.

In addition, the Water Authority is executing a major capital improvement program to enhance the operational flexibility and storage capacity of the region’s water supply system. Among the projects under way is the raising of the San Vicente Dam to expand local water storage capacity by more than 150,000 acre-feet.

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