As Gov. Gavin Newsom weighs new mandatory drought restrictions, Southern California leaders fear cuts in urban water use could force already sky-high water bills ever higher.
Unlike much of Northern and Central California, the region isn’t hurting for water, yet. Top water officials insist they have enough supplies for at least one more hot summer, perhaps two.
This story is for subscribers
We offer subscribers exclusive access to our best journalism.
Thank you for your support.
That’s because Southern California imports water from the coveted Colorado River and has invested heavily in storage capacity and drought-proof supplies, such as water recycling in Orange County and desalination in San Diego County.
Demand for water has fallen since the last drought as people ripped out lawns and installed low-flow toilets. But that means agencies are pulling in less money for an array of fixed costs, from debt payments on reservoir, canal and other projects to painstakingly negotiated long-term contracts for imported water.
Water bills already are rising to make up the difference, and they could turn sharply higher if California doesn’t get ample snow this winter and Newsom forces residents to conserve further.
Falling sales raise rates
In July, Newsom asked Californians to voluntarily reduce water use by 15 percent, citing dwindling reservoir levels throughout much of the state. Last month, state Natural Resources Secretary Wade Crowfoot said mandatory cutbacks may be needed if the situation doesn’t improve.
“We need conservation, but it’s not an emergency,” said Jeffrey Kightlinger, the recently retired longtime general manager of the powerful Metropolitan Water District of Southern California, which serves roughly 19 million people through smaller agencies, from San Diego to Riverside to Los Angeles.
“When you have lower and lower sales,” he warned, “you’ve got to raise your rates.”
That’s why Metropolitan and the San Diego County Water Authority have been pleading with officials in Sacramento not to implement mandatory drought restrictions that would force residents to cut back even more aggressively. Then-Gov. Jerry Brown imposed the state’s first-ever mandatory restrictions on residential water use in 2015, calling for a 25 percent cutback.
Water managers in San Diego and Los Angeles point out that Southern California has already seen its share of the State Water Project cut to a trickle. That 705-mile system of canals, pipelines, reservoirs and hydro-power facilities transport water from the Sacramento-San Joaquin River Delta to more than 27 million people.
“For the water authority, who has invested in supply reliability and has contracts that have to be paid, further mandatory conservation would mean that we’d still be paying for those contracts, but we’d be selling less water,” said Sandra Kerl, general manager at the Water Authority. “Obviously, the cost of the water would go up.”
One family’s bill
Adding to the financial burden of climate change, ongoing drought throughout the West is now prompting a wave of new water-recycling projects, with San Diego at the forefront.
Nearly all experts agree turning sewage into drinking water is crucial for getting ahead of climate change, especially as drought increasingly imperils the Colorado River and the Sierra Nevada snowpack.
However, the one-two punch of conservation and costly new recycling projects is now threatening to take a serious financial toll. As the San Diego region invests in the expensive technology, for example, its largest challenge will likely be keeping rates under control for its most vulnerable residents.
Conservation advocates often argue that ratepayers can break even by simply using less water. But that’s not the case for City Heights resident Guillermina Rice.
“I don’t do a lot of laundry,” said the 52-year-old, who lives in a two-bedroom house with her husband and teenaged son. “We flush only when we go number two. We try to save water, but sometimes it’s impossible.”
An average single-family home in the city of San Diego uses roughly 18 hundred cubic feet, or HCF, every two-month billing cycle. This summer, Rice’s family got that down to 7 HCF. As a result, they kept that bill to $153.30 with sewer fees.
She made the payment but still owes $677 in back charges. Rice, whose husband went on disability after suffering a stroke a couple years ago, had been able to support the family working for the San Diego Unified School District as a noontime aid. But when COVID hit, she lost work, and the family started falling behind on bills.
“With electricity, they have this (assistance) plan that we qualify for,” she said, “but in water there is no help.”
A growing number of people are struggling to pay their water bills, said Gregory Pierce, co-director of UCLA’s Luskin School of Public Affairs. “The question is not so much is the general price of water going to rise, but how do we shield people who can’t even pay existing prices?”
Experts say limiting fixed charges and increasing tiered rates for the highest water users can help, but the biggest challenge is that Prop. 218 prevents utilities from charging ratepayers to fund programs for low-income customers.
The state will likely feel mounting pressure to approve some type of financial-assistance program in coming years, Pierce said. “Even if you have really great rate design, there’s going to be some households who can’t pay, and rates are going to rise.”
Things are almost certainly about to get tougher for the Rice family and many others throughout San Diego.
The city is building a $5 billion sewage-recycling program, known as Pure Water, which is expected to send water bills soaring.
The city council, for example, recently voted to raise sewer rates for single-family homes by 31 percent over the next four years. The increase is intended to help fund the new recycling project, as well as badly needed maintenance.
At a public hearing in September, scores of residents voiced their concerns, including Norma Sanchez with the San Diego Workers Benefit Council.
“Raising the rate is not acceptable until low-income workers earn a living wage that’s enough to pay the basic necessities like housing, utilities, food, medical care and education,” she told the city council.
The recycling project, which is projected to eventually provide roughly half of the city’s drinking water, is also having the unintended consequence of taking business away from the region’s wholesaler, the Water Authority.
Much like conservation, the switch to local recycling projects deprives wholesalers of millions of dollars in revenue they’ve long relied on to import and store water from the Delta and Colorado River.
That’s especially the case since there are more than a dozen such recycling projects being planned throughout Southern California, including the East County Advanced Water Purification Program, which will service El Cajon, Santee and surrounding areas, as well as a recently revived $8 billion project at the city of Los Angeles.
While the city of San Diego voted to increase its sewer rates, the council also endorsed a 3 percent hike on the price of drinking water starting in January. The move comes to cover the fast-rising cost of buying supplies from the Water Authority, similar to a 7 percent hike in 2019.
City officials are now concerned wholesale rates are getting out of control. The Water Authority recently estimated that the cost of its water could nearly double over the next decade.
The agency, which buys water from Metropolitan and Imperial Irrigation District, currently charges $1,736 an acre foot for treated water. (An acre foot is enough water to cover an acre a foot deep, or 325,851 gallons.) It estimated that by 2031 that price could jump to as much as $3,092 an acre foot.
Meanwhile, Water Authority sales have slumped from more than 660,000 acre feet in 2007 to about 354,000 acre feet last year.
Rather than worrying about not having enough water, city leaders are now pressuring the Water Authority to prepare for the possibility it will need to resell some of its contracted water. That includes looking for buyers of the wholesaler’s supply of water from the Colorado River as well as from the $1 billion desalination plant in Carlsbad.
San Diego City Councilman Chris Cate, who sits on the water authority’s board of directors, recently spearheaded a push to explore such options.
“I think those rate projections opened a lot of eyes about the situation of affordability,” Cate said. “There’s a point where our ratepayers are only going to be able to take so much.”
Jack Bebee, general manager of Fallbrook Public Utility District, echoed that concern. His agency is looking at ditching the Water Authority in favor of contracting with another wholesaler due to the agency’s rising rates.
“The Water Authority’s saying, ‘You agreed to this contract, everyone. You figure out how to pay for it,’” Bebee said, “and all of us are saying, ‘You need to look at ways to potentially modify that investment.’”
Officials with the Water Authority have downplayed the potential need to resell water. They’ve argued that population growth will likely cover reductions in demand from conservation and new recycling projects.
Meanwhile, some officials have focused on striking a deal that would allow the agency to store excess water in Lake Mead, the largest reservoir on the Colorado River.
“Before you can resell it, you have got to be able to bank it,” said Jim Madaffer, a Water Authority board member and long-time San Diego political insider. “We’re in high-level discussions right now.”
Metropolitan is also looking at creative solutions to the financial pressures being brought on by climate change-fueled drought.
The wholesaler is now planning to build one of the largest sewage-to-drinking-water recycling plants in the country. To make the project pencil out, the agency is looking to partner with the Southern Nevada Water Authority and the Central Arizona Water Conservation District.
The Nevada agency has already contributed $6 million toward planning the project, with a similar investment from the Arizona agency now pending. If the collaboration goes forward, the agencies will help fund the construction in exchange for future water supplies.
Kightlinger, formerly of Metropolitan, said that the recycling project could come online sometime next decade.
“They would pay to help build and operate the plant in exchange for Colorado River water,” he said. “They have sufficient supplies for their growth up until the mid-2030s, so it does feather in nicely.”