Household water costs fluctuate sharply

People across California pay dramatically different amounts for the same amount of water, with price tags set by individual agencies from Crescent City to El Centro.

North or south, inland or coastal, what Californians pay for their water is locally driven, drought or not. Ultimately, retail water’s value is determined in a way similar to real estate – location, location, location.

 One hundred cubic of water, a common unit of measurement, is the equivalent of 748 gallons.

“The cost of the water itself typically is a relatively small cost of the consumer’s price in the end,” said Timothy Worley of the American Waterworks Association’s California-Nevada office. “The cost of infrastructure, the costs of power for delivery and treatment, all those other costs that go into delivering water are somehow obscured.”

A study of 217 water-delivery agencies serving single-family residences reviewed by Capitol Weekly showed total monthly bills ranging from just under $23 in Oroville to $190 in a small Humboldt County district. The 2013 survey was conducted by Worley’s group, which has been doing the studies since 2005 and is in the midst of compiling new figures this year. The organization also examined rates regionally in the state’s southern, northern and central zones, and the San Joaquin Valley. A separate report was compiled on Nevada users.

The figures do not reflect fines and penalties, nor do they reflect the potential impact of an April 20 ruling by a state appeals court, which said the price that districts charge customers for water must be pegged to the deliverer’s cost in providing it.

Typically, about half of the 440 agencies to whom the survey is sent actually respond, although the respondents vary from year to year. Districts in all of California’s 58 counties are represented. The survey examines rates, connection fees and other costs, with the benchmark for an apples-to-apples comparison of 11,220 gallons, or 1,500 cubic feet, of water used per month in a single-family residence. Water utilities serve about 12.5 million households cross California. One hundred cubic of water, a common unit of measurement, is the equivalent of 748 gallons.

Myriad factors go into rate setting, but to the consumer the most important one is simple – the final bill.

“It’s impossible to draw true comparisons because there are many factors that skew the results: the development of water, the treatment of water, delivery costs, energy costs, water usage, environment, socio-economic status, size of property,” said Van Grayer of the Vaughn Water Company in Kern County, which serves about 28,500 people and gets all of its supplies from groundwater.

But the survey does offer a snapshot of the pocketbook impact of residential water use and illustrates the dramatic disparities in the complex rate-setting systems that govern who pays how much.

At the East Bay Municipal Utility District, which serves 1.3 million customers in 20 cities, including Oakland, the bi-monthly bill is $55.45. In Taft in Kern County, where 16,600 customers are served, the bi-monthly tab is about $26. The city of Santa Monica’s bi-monthly bill is $46.21. In Granite Bay east of Sacramento, it’s $41.92. In Costa Mesa, it’s $51.25, while Laguna Beach customers pay $82. Customers in Santee east of San Diego pay $105 bi-monthly, while those in Chula Vista and National City they pay $86. In Santa Clara County, Felton customers pay $148.84 bi-monthly, and in Aptos the bi-monthly tab is $36.90.

Throughout the state, about two-thirds of the water agencies surveyed bill monthly. Almost all the rest bill every other month. At least one, the South Lake Tahoe Public Utility District, bills once every three months.

In the district with the highest rate, the Westhaven Community Services District serving Trinidad in Humboldt County, there are about 200 customers connected to the water system and a freeze on adding any more, said district secretary Sarah Jordan. That means the costs of providing water are shared by relatively few people. The Westhaven cost is $190.02, which includes $144.52 for the cost of the water and $44.50 to cover the costs of the district’s infrastructure, maintenance and operations, among other things.

At the other end, the South Feather Water and Power Agency, which serves small communities near Oroville, has an unusually low rate of $22.95 per month. The district gets all its water from the south fork of the Feather River, generates power and sells it to Pacific Gas and Electric Co. It uses that money to bring down customers’ costs. General Manager Mike Blaze said it costs about $1.02 to provide a 100 cubic feet of water, but that the customers pay only about 40 cents, one of the lowest water rates in the country. The money from PG&E makes up the balance.

“One reason we have low rates is that we purposely subsidize our customers with hydropower generation,” Glaze said.

Throughout the state, about two-thirds of the water agencies surveyed bill monthly. Almost all the rest bill every other month. At least one, the South Lake Tahoe Public Utility District, bills once every three months. More districts have gone to monthly bills because monthly billing helps convey information on consumption and pricing. As rates increase and bills get larger, customers may find it easier to pay smaller monthly bills than larger bi-monthly bills, the study noted.

From afar, California water is viewed as a north-south issue and the crux of political battles between farmers, environmentalists, property owners and urban and rural users.

It’s all that – and a lot more.

Water rates are remarkably complex, reflecting “geography, climate and service area, as well as the use of taxes, subsidies and grants,” according to the report, and that “in recent years, water rates have increased faster than the overall rate of inflation.”

Rates aren’t the only disparate costs: Water connection fees also fluctuate wildly around the state.

One reason water rates differ from district to district is infrastructure – the cost of building and maintaining pipelines and treatment plants, for example, and the costs of connecting new customers. There may be seismic safety charges, water quality costs, supply shortages, debt payoffs, even decreasing per-capita consumption – good in a drought but perhaps not so good in a district strapped for revenue.

There are geographic anomalies, such as having to pump water to higher elevations in steep terrain, or building pipes or flumes to carry water over significant distances. Regulatory controls can add costs, while efficient management technological improvements can cut them.

Rates aren’t the only disparate costs: Water connection fees also fluctuate wildly around the state.

A residential connection fee in Novato in Marin County was $28,600, the highest of any noted in the survey. Livermore was $27,249 Lathrop was $22,297, and in Nipomo in San Luis Obispo County it was $18,849. In Bishop in Inyo County, the connection fee was $2,000; in Temecula, $1,425; and in Tahoe City it was $2,500. The Aromas Water District in San Juan Bautista charged $10,843 to hook up to the system; a few miles away, in Hollister, the charge was about half that, $5,461.

In Quincy, in Plumas County, connecting to the system costs $3,637, while in the city of San Diego, it’s a little bit less – about $3,047.

Gov. Brown said in a written statement following the ruling that the “practical effect of the court’s decision is to put a straitjacket on local government…”

Perhaps three-fourths of California water-deliverers have “inclining” rates, with the goal of encouraging conservation. Inclining rates rise in a per-unit charge depending on how much water is used. In one southern district, for example, the first 172 gallons of daily usage costs $2.91. The cost beyond 173 gallons per day is $3.60 per unit and for usage over 393 gallons per day, the unit cost is $4.42.

But a water-rating structure in San Juan Capistrano came under fire by a state appeals court last week, which ruled that customers can only be charged for what it costs to provide the service. The ruling, which has the ultimate potential to put tiered rating systems in jeopardy, cited voter-approved Proposition 218, which originally dealt with property taxes and fees, but in 2006 was expanded to include water and other utility charges.

The court decision could have a major impact on retail water pricing.

Gov. Brown said in a written statement following the ruling that the “practical effect of the court’s decision is to put a straitjacket on local government at a time when maximum flexibility is needed.” Brown also called for $10,000 fines for water wasters, a 20-fold increase over the current $500 penalty, and for mandatory cutbacks of 25 percent for homes and businesses.

Tim Quinn, the executive director of the Association of California Water Agencies, or ACWA, also was critical.

“It’s a serious concern, and it comes at a time when water agencies throughout the state need every tool available to manage through this historic drought and meet mandatory water use reduction targets that will be adopted soon by the State Water Resources Control Board.”

Sen. Lois Wolk, D-Davis, who chairs the Senate’s delta restoration committee and co-authored the $7.55 billion water bond approved by voters, suggested that the initial reaction to the court ruling may have been too hasty.

“It’s doable to do tiered water rates that reflect the cost of service,” she said. “The notion of tiered water pricing has not been thrown out. You can still have a rating system that reflects the value of the water.”

Worley agreed.

“It’s going to be a bit more of a burden on water utilities as they design their inclining rate structures to really focus on the specific cost of the next increment of water,” he said. “The court did not rule out this rate structure, but said it has to be tied to the actual cost the utility faces,” he said.

But the decision made caught the attention of water districts up and down the state.

“We’re looking very closely at it,” said Grayer, “very closely.”