1) Proposed Rate Structure Changes
Your water bill is determined based on what it costs to serve water to your home or business. Due to state requirements, the changing water use trends driven by the recent drought, and our fiscal responsibility, we need to reassess our rate structure.
- We worked with an independent rate consultant to ensure proper allocation of costs among customers. Our proposed rate structure changes align water rates with the cost of your water service, nothing more.
- These structural changes only affect how rates and charges are allocated among customers; they do not result in additional funds for the District overall.
- With the proposed rate structure changes, some customers’ bills will go down, while others will go up depending on their service.
NOTABLE CHANGES UNDER THE RATE STRUCTURE
The untreated water rates will be standardized to increase ease of understanding and administration.
Annual Service Charge – The annual service charge for agricultural irrigation purposes is currently assessed per acre. The service charge is proposed to be assessed the same rate per account. The service charge covers the customer service and billing costs.
Usage Charge – The usage charge covers the cost of purchasing source water, delivery, and conservation programs. The usage charge for agricultural irrigation service has historically been lower than other customer classes. In response to customer feedback on our draft plan, the proposed increase in the usage charge is part of a three-year phase-in of rate adjustments to bring the rates to be the same as for all customers. The current usage charge is $124.92 per acre-foot (or $0.38 per thousand gallons). The proposed standard usage charge for all customer classes is $2.13 per thousand gallons (or $694.02 per acre-foot). The District recognizes that the rate adjustment may have a significant business impact for customers, therefore is proposing to make the usage charge adjustments for agricultural irrigation service over three years. The proposed rate adjustment is $1.47 per thousand gallons (or $478.97 per acre-foot).
2) Proposed Annual Rate Adjustment
Water rates pay for the transport and delivery of safe, high-quality, and reliable water to all District customers. Based on our annual review (PDF), we are proposing a rate adjustment to generate up to a 6% revenue increase for 2019 to maintain your water service. These adjustments are necessary to:
- Meet the increasing costs of operating and maintaining the system as well as delivering water
- Continue repairing and replacing aging pipes and other facilities
- Account for new state mandates
- Fund employee salaries and benefits
- Rebuild financial reserves for the next drought
Putting It All Together: Current Rates Compared to Proposed Rates
For an untreated water agricultural irrigation customer who uses 890 gallons of water per day (325,000 gallons or approximately 1 acre-foot per year) pays about $20.81 per month for their water service. With both the proposed rate structure changes and annual revenue increase, the per month cost would change to $48.08. This would result in an increase of $27.27 per monthly billing cycle for the next year (see chart for details).
Example: The current and proposed structure and rates changes are shown in the table below. It provides a summary for an untreated water agricultural irrigation customer with 5 acres of land using 890 gallons of water per day (1 acre-foot per year). The columns have been broken down to separately show changes with the updated rate structure, and then combined with the annual rate review. If approved, the new rate structure and rates will become effective on February 1, 2019.
All Changes to Rates and Charges
The chart to the right shows the full list of proposed untreated water rates and charges. Charges shown reflect the cumulative proposed change with the updated structure and rates.
|Agricultural Irrigation Customers||Current Charge||Proposed Charge|
|Agricultural Irrigation – Livestock (currently per year)||$ 66.16||$ 66.16|
|Agricultural Irrigation (currently per acre)||$ 24.95||—|
|Agricultural Irrigation (proposed $/month)||—||$ 8.27|
|Usage Charge ($/AF)||$ 124.92||$ 478.97|
|Usage Charge ($/kgal)||$ 0.38||$ 1.47|
AF = Acre foot
kgal = Thousand gallons