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CWA approves rate increases

 

Last updated 7/10/2008 at Noon



The San Diego County Water Authority approved rate increases for 2009.

The June 26 approval of the new rates will result in a 17.8 percent increase in the municipal and industrial untreated supply rates from $390 to $463 per acre foot, a 23.4 percent increase in the rate for untreated agricultural water from $261 to $322 per acre foot, and an 11.8 percent increase in the Infrastructure Access Charge from $1.70 to $1.90 per meter equivalent.

The rates are those the CWA charges to its member agencies, who can either absorb the rate increases or pass them on to retail customers.

“I think the important thing about the rates is that we tried to, if you will, look over the next ten-year period to make sure that our rate increases were smooth and not spiking,” said CWA deputy general manager Paul Lanspery.

“This is a large rate increase, but as we look out over the next several years that curve is not going to go like this,” Lanspery said. “Looking out over five and ten years we kind of ramped it down a little bit.”

The components of the $73 per acre foot municipal and industrial cost increase include a $58.60 increase in the Metropolitan Water District of Southern California rate. “In this particular increase the major driver is the MWD water that we’re purchasing,” Lanspery said.

The MWD purchase component, combined with the lower base rate for the agricultural water supplies, explains the higher increase for agricultural water despite the cutbacks to those customers.

The CWA increase also covers $18.20 for spot water purchases and storage costs, although the agricultural customers do not pay storage costs.

The net $73 increase also includes a decrease of $3.80 per acre foot due to lower wheeling costs and deferred cost recovery.

The CWA’s water rates are based on a melded rate involving delivery of water from MWD and water purchased from the Imperial Irrigation District under the Quantification Settlement Agreement.

The municipal and industrial rate per acre foot increased to $390 in 2008 from $365 in 2007 and the agricultural rate increased from $241 in 2007 to $261 in 2008.

The Interim Agricultural Water Program provides surplus MWD supplies to agricultural customers at a discounted rate, and the IAWP conditions allow for a reduction of up to 30 percent prior to implementing any mandatory reductions to municipal and industrial customers.

An agricultural property may choose to pay the municipal and industrial rate and not be subject to the IAWP cuts, although the current reduction program stipulated a participant obligation cutoff date of December 31, 2006.

The CWA rates also include a surcharge for treated water which was increased from $164 to $168 per acre foot.

The CWA’s transportation rate, which is a uniform rate set to recover capital, operating, and maintenance costs of the CWA’s aqueduct system, increased from $60 to $64 per acre foot.

(The transportation rate only applies to member agencies utilizing CWA facilities; the delivery point from the MWD pipeline is six miles south of the county line and certain Fallbrook Public Utility District and Rainbow Municipal Water District turnouts do not utilize the CWA infrastructure.)

The Infrastructure Access Charge is used for CWA fixed expenditures which are incurred even when water use is reduced.

The CWA’s Customer Service Charge, which is also intended to recover costs which support the operations of the CWA and is allocated among member agencies based on a three-year rolling average of all deliveries, was increased from $15,200,000 to $16,000,000.

The Storage Charge, which recovers costs related to emergency storage programs and is also allocated based on a pro-rata share of deliveries, will increase from $22,200,000 to $23,000,000.

The CWA also has a Standby Availability Charge of $10 per acre or $10 for a parcel under one acre, and that remains unchanged.

The distribution of the Customer Service Charge includes $791,871 assessed to the Rainbow Municipal Water District, $482,872 payable by the Fallbrook Public Utility District, and $1,602 charged to Camp Pendleton.

The Storage Charge will include payments of $455,699 from Rainbow, $398,624 from FPUD, and $2,694 from Camp Pendleton.

MWD also has a Readiness to Serve Charge, which is set on a fiscal year basis and which also involves credits for the standby charge and administrative costs.

The CWA’s share will increase from $9,782,918 to $10,865,652, and that charge will be allocated to member agencies based on a ten-year rolling average of demands.

The MWD Capacity Charge, which is allocated to CWA member agencies proportionally based on a five-year rolling average of flows during peak periods, will remain unchanged at $8,812,800.

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