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Pricier by the gallon

Santa Clarita Water Division considers adopting tiered water-price rate system to encourage conser

Posted: April 18, 2009 10:52 p.m.
Updated: April 19, 2009 4:30 a.m.

Tiered water rates work under one simple premise — make wasting water so expensive that ratepayers have to conserve.

It’s a system that may become familiar to many Santa Clarita Valley residents soon.

Newhall County Water District adopted a tiered water system in 2004. The success of the system has prompted Santa Clarita Water Division, the retail subsidiary of Castaic Lake Water Agency, to examine tiered water rates as a way to save water, said Mauricio Guardado, Santa Clarita Water Division retail manager.

Guardado presented Castaic Lake Water Agency board members with the idea of a tiered water-rate system at the April 6 board meeting. Santa Clarita Water Division is in the midst of budget planning, and the tiered water-rate system is up for consideration this year, Guardado said.

A plan isn’t in place yet, but one of the ideas that Guardado is splashing around involves keeping current rates for the average users, increased rates for those who use more, and reduced rates for those who use less than the average allotment of water.

“It’s similar to utility companies,” Guardado said. “If you’re going to have all your lights on all day, you’re going to pay.”

Castaic Lake Water Agency board member Thomas Campbell said the idea better manages the agency’s biggest asset: water. Campbell wants to be clear that the tiered rate is exclusive to the retail operation — Santa Clarita Water Division.

Castaic Lake Water Agency, which is a wholesaler of state water to all retailers in the SCV, would not be affected by a tiered rate system, he said.

Water companies run a balance between generating revenue from water sales and actually managing water as a resource, said Steve Cole, Newhall County Water District general manager.

Newhall County Water uses a four-tier system that sets rates based on the per-home historical average. The average sets the base rate. Use beyond the average defines the higher tiers, Cole said.

“What our board wanted to do is to set up a rate structure to encourage people to use less water,” Cole said about adopting the measure.

After Newhall County Water District adopted its tiered system in 2004, the savings started growing. Between 2004 and 2008 the average household — which uses 267,198 gallons per year, according to district figures — reduced its water consumption by more than 26,000 gallons, according to water district records.

“If it’s a real dry year, more water still gets used,” Cole said.

That was true in 2007, when a dry year registered a spike in water use compared to the previous two years. A relatively wet year — such as 2005, when 55.27 inches of rain fell in the SCV — sent water use plummeting.

Valencia Water Company is the only privately held retailer in the SCV. That puts it under the authority of the California Public Utilities Commission, which set a deadline of January 2011 for the water company to adopt tiered rates, said Bob DiPrimio, Valencia Water Company president.

“The main benefit is to encourage customers to conserve and not waste,” DiPrimio said. “We basically live in a desert, and with climate change, we need to make sure we use water wisely.”

Controversy goes with tiered water rates, Cole said. “We got complaints from people with large yards that do a lot of irrigation.”
Castaic Lake board member Campbell anticipates the same friction when and if Santa Clarita Water Division pursues tiered water rates. “I look forward to hearing the discussion,” he said. “While tiered rates are (a) valid way to save water, they come with controversy.”

Big water users are the target for Cole and other proponents of tiered water rates.

“I think what I’m looking at as a water manager is leveraging those people who use more water than they should to pay for programs that save water,” Cole said.

Newhall County Water District transforms extra dollars from top-tier water users into rebates for low-flush toilets and evapo-transpiration controllers, which more efficiently water lawns, he said.

Before Santa Clarita Water Division can adopt a tiered system, the staff must formulate a plan for board consideration and hold a public hearing.

“We are months away from any of those steps,” Guardado said.



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