Conserving Water Raises Rates

Local residents in San Diego, California, who believe conserving water will save them money are in for an unpleasant surprise. Water rates are actually being increased because there is less water use. According to the Metropolitan Water District, the Los Angeles-based wholesaler that supplies the San Diego County Water Authority (SDCWA), the successful conservation effort has resulted in a $200 million revenue drop to the agency.

The SDCWA and agencies that deliver water have fixed budgets to cover basic operating costs. Water revenue is used to pay down debt, repair broken pipes and compensate employees, regardless of how much water is sold. Conservation means less water use which in turn means less revenue. In order for the SDCWA to meet budget requirements, residents will see nearly a 20% rate increase in their water bill.

In addition to providing water for the county, SDCWA is spending $586 million to raise the San Vicente Dam and double the reservoir's storage capacity. The city of San Diego plans to spend hundreds of millions on water treatment upgrades and pipe improvements. Billions more could be spent in the next decade on projects that would require yet more rate increases.

Metropolitan expects to pay about $2.5 billion of the cost to build a canal to route water around the 738,000-acre Sacramento Delta that would require an additional 15% rate hike. Plans for a seawater desalination plant on Camp Pendleton will also require additional rate increases to pay the plant's estimated $1.2 billion to $1.9 billion cost.