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As of Aug. 14, the price of having fresh water at home from the California Water Service Company went up and it went down for residents of Atherton, Portola Valley, Woodside and parts of Menlo Park — all located within Cal Water’s Bear Gulch District. The increase was in the service charge; the drop was for water usage.
For the typical residence that has a 5/8-inch pipe connected to the water main, the monthly service charge went up 38 percent, to $19.60 from $14.20.
At the same time, the price of water dropped 3.7 percent. Cal Water measures its water in increments of 748 gallons. Under the new rate, a typical Bear Gulch residential customer pays $4.92 for 748 gallons, down from $5.11.
A typical Bear Gulch residence uses 17,952 gallons per month, and the combined effect of the two new rates translates to a monthly bill of $134.78, up 0.7 percent from $133.82, according to Cal Water.
A few obvious questions: Why, in a severe drought, are we not paying more, sometimes much more, for a gallon of water? Why, in a severe drought, are we now paying more for pipes and water meters and less for water, the stuff that is in short supply? Is it not counter-intuitive?
“I hear what you’re saying. It does appear that way,” said Tu Rash, a director in the rates department at Cal Water. “We’re trying to establish a consistent policy through all (Cal Water’s 25) districts,” she said. “There are many moving parts.”
Elusive equity
A 2009 article, “Water Conservation Made Legal: Water Budgets and California Law,” published by the American Water Works Association describes some of the trade-offs that water agencies such as Cal Water face.
Water rates that emphasize conservation have five key elements, some of which can be mutually exclusive: revenue stability, ease of implementation, conservation effectiveness, affordability for basic water needs and customer equity — “the most elusive element,” the article says.
An agency can dramatically increase water prices for heavy users, but revenues may come to rely on outdoor watering practices susceptible to changes in the weather. It might be effective at conservation, but create revenue instability.
An agency could charge uniformly high rates, but agencies are required to stay “revenue neutral,” meaning they must keep revenues in line with expenses. Revenue-neutral rates may be ineffective at conservation and may be unfair to users with basic needs.
Some 240 water agencies are members of the California Urban Water Conservation Council, which publishes best practices for water management, including guidelines for billing. Generally an agency should derive 70 percent of its revenues from water use and 30 percent from service charges, Ms. Rash told the Almanac.
Cal Water’s districts are inconsistent in this respect, she said. Bear Gulch before the rate change derived 83.6 percent of revenues from water use and 16.4 percent from service charges. New rates adjust the split to 77 percent and 23 percent, she said.
Still, it’s just a guideline and Cal Water is not “married to” the 70-30 split, Ms. Rash said. “Just because we have a policy in place now doesn’t mean we are going to continue with it if it doesn’t make sense.”
Transparency
The Almanac learned of Cal Water’s rate increase and its comparison to the previous rates from a customer who requested the comparison. The information was not included in the bill, nor is it readily available on the company’s website.
Rate comparisons are available on request, Bear Gulch District Manager Dawn Smithson said.
How might customers determine whether a rate structure makes sense if they aren’t informed? “That’s a very good point that you’re making there,” Ms. Rash said. Space on the water bill is limited and Cal Water is “trying to figure (it) out,” she said.
Cal Water is also working on a program to avoid penalizing residents who must increase the size of their water meter/pipe because they’ve installed indoor sprinklers for fire suppression, Ms. Rash said.
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Great article, thanks.
This is a really bad time to implement this rate design.
Reducing rates for water use, especially incremental water use above a baseline, while increasing base rates that are independent of use in the midst of a serious drought is the opposite of what we need.
A disappointing formulaic approach that apparently didn’t seriously consider the facts on the ground.
Hi Dave,
You have shown some interest if water systems, kudos.
I would like to see
reporting on the MPMWS policies. I notice that the district, includes areas outside of the city of Menlo Park, I wonder if this is the best policy since or City Council and commissions are working so hard to fulfill their mission of keeping the bureaucrats who run the department accountable to the public. Should they really have to be responsible for clients that do not live in menlo park? Who are these clients any way? I just noticed this when I looked at a map of the MPMWD overlaid with the MP city limits map.
The issues of equity are also clear in that the some of the city engineers have suggested supplying public water to a private country club to irrigate their golf course. While I admit in this case the golf course is in the City limits, it does not seem to me to be a proper use of water during a drought or even during wetter times when aquifers may be able to recharge and prepare the ecosystem for future dry spells instead of being wasted on a golf course.
Just an idea, you seem like a reporter interested in these things and we need those. I often feel theres is something I don’t know even though and a good reporter might figure it out.