More collaborative operational solutions for affordable water

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OPINION – California is unique in that our state policy recognizes the human right to water – a principle that every resident deserves safe, clean, affordable and accessible water. Yet affordability, the ability for families to pay their utility bills without sacrificing other basic needs like rent, food or medicine is increasingly strained. Increasing costs for infrastructure development, regulatory and environmental compliance and climate resilience have made essential services such as water, energy and wastewater more expensive than ever. In many communities, utility rates are increasing faster than inflation, leaving even middle-class California families struggling to keep up.

These rising operational costs inevitably trickle down to ratepayers, which disproportionately impacts those least able to pay. From small, rural regions to low-income urban communities, those with the fewest resources are supported by some of the smallest water systems with limited resources.

This year, however, brought some welcome relief. Thanks to Governor Newsom and legislative champions like Assemblymember Blanca Rubio, California passed Assembly Bill 428, a new law tackling one of the most painful, and familiar, cost pressures Californians face: skyrocketing insurance premiums. Anyone who owns a home or runs a business in California knows this pain firsthand. From wildfires to floods, the state’s mounting climate risks have sent insurance costs soaring. This is a burden shared by homeowners, small businesses, and utilities alike. For water providers, these rising premiums directly threaten affordability.

AB 428 was co-sponsored by the California Water Association (CWA), representing the state’s CPUC-regulated water utilities, and the California Association of Mutual Water Companies (CalMutuals), which represents hundreds of non-governmental, community-owned mutual water systems across the state. Together, these organizations reflect the majority of small and rural systems that are most vulnerable to climate impacts and rising costs, yet least able to absorb them. Their partnership underscores how collaboration across diverse water providers can drive practical, statewide solutions to protect affordability for all Californians.

Consider the Lukins Brothers Water Company in South Lake Tahoe, a system that serves over 3,000 customers. Their insurance premiums jumped by more than 200%, from $56,000 in 2021 to $299,000 in 2023, forcing the company to pass along a $21 monthly increase per customer just to stay insured. This was a crushing blow to a small community already struggling with affordability.

Or, the neighborhood of Del Rio in the City of El Monte, whose residents own and volunteer to operate a community system with only 100 service connections, that could not afford insurance at market rates, until CalMutuals created a Joint Powers Authority in 2017, with less expensive pooled insurance options. But as illustrated in South Lake Tahoe in 2025,  not all small water systems were eligible to join insurance pools.

AB 428 offers a practical, common-sense fix. The measure now allows water corporations to join with mutual water companies and public water agencies to pool resources and buy insurance together, similar to how families save by buying in bulk at Costco rather than paying higher prices for individual items. The bigger the insurance pools, the lower the cost.  The result for utilities: reduced risk, lower costs, stronger financial security, and greater stability for ratepayers.

Of course, this victory is just one piece of a much larger puzzle. Water affordability will require many more such innovations and policies that reduce costs through collaboration and efficiency, without sacrificing water quality or reliability.

The affordability challenges faced by all Californians require bold strategies to ensure long-term equity and sustainability. If we want to deliver on California’s promise of safe, affordable water for all, we must continue to think boldly and work collectively. When systems large and small join forces, we not only save money, but we also strengthen our ability to serve every Californian.

Adán Ortega is Executive Director of CalMutuals, an association dedicated to ensuring effective and compliant operation and governance of small water systems.