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CWA adopts transitional ag discount rates

The San Diego County Water Authority has adopted an ordinance setting transitional Special Agricultural Water Rates for customers who opt out of the Metropolitan Water District’s Interim Agricultural Water Program.

The December 18 action sets Calendar Year 2009 transitional SAWR supply rates at $412 per acre-foot for untreated water and $580 per acre-foot for treated water.

The total costs, including customer service and transportation charges, will average $503 per acre-foot for untreated water and $671 per acre-foot for treated water.

“This was just kind of turning up loose ends and finally adopting the rates,” said Dana Friehauf, the SDCWA’s Principal Water Resources Specialist.

MWD has had an agricultural water program in place since 1958.

In November 1990 the Incremental Interruption and Conservation Program was adopted by MWD, and the agricultural program was incorporated into the IICP in 1991.

The Interim Agricultural Water Program was implemented by MWD in 1994.

The twelve participating MWD agencies have a maximum annual cap of 155,190 acre feet, although agencies can use less than their allocation.

The San Diego County Water Authority was allocated 100,459 acre feet.

During Fiscal Year 2005-06 the 17 participating CWA agencies utilized 84,993 acre feet of IAWP supplies.

On October 14 the MWD board approved changes to the Interim Agricultural Water Program which will phase out the IAWP over a four-year period.

The IAWP provides surplus Metropolitan Water District of Southern California 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 (M&I) rate and not be subject to the IAWP cuts, although when MWD adopted a 30 percent reduction program to be implemented at the beginning of 2008 a participant obligation cutoff date of December 31, 2006, was stipulated.

The phase-out of the IAWP program allows for customers to opt out, and be subject to M&I rates, at the beginning of any calendar year during that four-year transition period.

Because agricultural customers will be cut back in a drought, they are not subject to certain County Water Authority storage costs or supplemental supply costs.

The CWA’s Special Agricultural Water Rates program exempts SAWR customers from the melded supply and treatment charges from Imperial County water and from the CWA member agency’s proportional share of the fixed storage charge.

“The rate reflects that. They’re paying for Met water. They’re not paying for the Water Authority supplies,” Friehauf said.

On October 23 the CWA board approved a two-year transitional program for customers opting out of the IAWP program which would provide the same discounts from storage and supply costs as continuing IAWP customers.

The customers choosing to participate in the transitional program are subject to the same allocation of water from the Emergency Storage Project and the future Carryover Storage Project as continuing IAWP customers and they are also subject to MWD regional cutback levels if the CWA’s supplies are cut back.

The October 23 board action also formed a workgroup which will return to the board by the end of Calendar Year 2009 with options for programs beyond the transitional period.

The transitional program is only available to customers who had been in the IAWP and have opted out.

Customers may remain in the IAWP throughout the phase-out period and be eligible for all CWA discounts.

Customers who remain in the IAWP will continue to receive the IAWP discount but will also be subject to higher cutback amounts than M&I customers if a continued drought leads to further cutbacks.

“If you don’t want to have greater cuts in the future, you opt out,” Friehauf said.

“If you stay in IAWP you get the cheap water,” he added. “But you could experience even more severe cutbacks.”

During Calendar Year 2009, member agencies will pay M&I supply rates of $463 per acre-foot for untreated water and $631 per acre-foot for treated water.

The member agencies will also pay $64 per acre-foot in transportation costs to recover capital, operating, and maintenance costs of the CWA’s aqueduct system.

The CWA’s Customer Service Charge covers costs which support the operations of the CWA and is allocated among member agencies based on a three-year rolling average of all deliveries; that charge is assessed to both M&I and IAWP customers and the CWA-wide average is $27 per acre-foot.

The Storage Charge recovers costs related to emergency storage programs and is also allocated based on a pro-rata share of deliveries; the average is $44 per acre-foot.

The full M&I rates average $598 per acre-foot for untreated water and $766 per acre-foot for treated water, and CWA member agencies pass along their costs to customers.

The IAWP total rates average $413 per acre foot for untreated water and $556 for treated water.

The IAWP supply rates per acre foot are $322 for untreated water and $490 for treated water.

“We’ve got options for the farmers and it’s really their decision,” Friehauf said. “We’re giving them options on how to move forward.”

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