Looking out for water ratepayers in San Diego County

SAN DIEGO – Every year at this time, water agencies launch the long and thoughtful process of setting rates for the next year. It's always complex and challenging – and 2022 is an even more challenging year due to larger economic uncertainties that are compounded by inflation.

The good news is that the San Diego County Water Authority strategically invested in supply reliability in decades past when costs and inflation were lower – and we are reaping the benefits of those investments during the worst megadrought in 1,200 years. Further, the Water Authority's locally controlled sources have cost-control measures built into the contracts to help guard against sudden price increases.

However, water costs in San Diego County are heavily influenced by the Metropolitan Water District of Southern California. And now, MWD is proposing the largest increases in more than a decade – 17% over the next two years.

Under new management, MWD is undertaking several long-range financial and planning efforts while beginning an investment cycle to ensure its future water supply will be reliable. Over the next several years, MWD is starting a $3.7 billion recycled water plant in Carson followed by a multi-billion-dollar tunneling project in the Bay-Delta.

While these are important projects for MWD to shore up its supplies – especially for their member agencies that may have cutbacks due to their location in MWD's system – they will drive up the cost of water from MWD far faster than the cost of Water Authority water.

Using similar methodology, here are the rate forecasts for each agency over the next 16 years:

· Metropolitan Water District: 7.1% to 9.0% per year increases

· San Diego County Water Authority: 2.8% to 4.2% per year increases

One result is that MWD's water is expected to be more expensive than our supplies within the next decade (as shown in the chart).

The water rates that San Diegans pay vary throughout the county depending on the retail agency that delivers water to them. Wholesale water rates that these agencies pay to the Water Authority are impacted by rates set in Los Angeles by MWD. Water Authority projections include passing through MWD rate increases. The reason the San Diego region's rate increases are less than MWD's increases is the result of our reduced dependence on MWD while it faces large new water investments.

Ratepayers in agencies that are 100% dependent on MWD water will bear higher costs compared to the Water Authority's ratepayers.

On behalf of San Diego County's water agencies, farmers, small businesses, and ratepayers, Water Authority leaders are asking MWD to prioritize affordability and aggressively control costs before imposing significant rate increases. The Water Authority Board and staff have worked very hard to do that at the Water Authority and are committed to advocating on the region's behalf at MWD while supporting the very important work they do.

Submitted by San Diego County Water Authority.