Sunday, July 19, 2009 | When the first reduction in San Diego’s water supplies in two decades loomed earlier this year, a long list of people weighed in on Mayor Jerry Sanders’ proposal to reduce citywide use.

Lobbyists lobbied. Economists critiqued. Concerned residents questioned.

One group was notably silent: The City Council.

That changed in early April after revealed misrepresentations that Water Department staff had made about the benefits of Sanders’ proposal, which had based proposed cuts on residents’ historic use. Very quickly, the council got a lot more interested in shaping a policy that had previously been entrusted to the Mayor’s Office and Water Department staff to develop and market.

Then San Diego got a reprieve. The 20 percent supply cut the city had prepared for didn’t manifest. Instead, the region is coping with an 8 percent reduction. But as the potential for cuts looms again next year, City Council President Ben Hueso is now prodding his colleagues to develop their own water-reduction strategy — not rely on the mayor.

In a recent memo, he asked them to submit ideas for promoting water conservation and new supplies and has proposed a series of public meetings about water.

A key ingredient in Hueso’s proposal: Tiered water rates that encourage water conservation. Under that type of system, a household is budgeted an individualized amount of water depending on how many residents and how much landscaping it has. Those who use more than they’re budgeted get charged steeper rates than those who use what they’re supposed to. The approach penalizes inefficient use and rewards conservation.

The Irvine Ranch Water District in Orange County is commonly held up as a model for the approach. It adopted water budgets with tiered rates in the early 1990s, helping to drive down per-capita consumption.

“Some individuals use more than their fair share,” Hueso said. “A tiered program will ensure that if those people don’t want to change their habits that we’ll have a policy that will help them change their habits.”

Earlier this year, water officials exaggerated the challenges of instituting tiered rates with water budgets, while acknowledging it was a fairer way to reduce use. Water officials and Sanders instead offered a plan that would’ve allowed the largest users to have still remained the largest users, regardless of whether they were using water efficiently.

But that idea has been shelved, and support is growing for a tiered-rate system like Irvine Ranch’s among council members. Councilman Carl DeMaio said the council should have a tiered-rate system in place by the winter. Councilmen Todd Gloria and Kevin Faulconer and Councilwoman Marti Emerald want to explore the concept. Councilwoman Donna Frye said she likes it too, and believes it could be adopted by next summer.

“If a commodity costs nothing, that becomes the value of it,” Frye said. “And people are not going to conserve what has little or no value to them.”

Water is growing more expensive. San Diego’s water rates, which cost the average resident about $76 monthly, are scheduled to increase this year and next. The Los Angeles-based Metropolitan Water District, the major supplier of San Diego’s water, is boosting rates 20 percent in the next two years. That will be passed on to all residents and businesses throughout San Diego County.

“The more water efficient we are, the lower our cost of operating and cost of living,” DeMaio said. “This is a no-brainer, common-sense way to transition our households and economy to more sustainable living and operating.”

Cities and water districts that use tiered rates and water budgets do so to dissuade inefficient use and give customers a financial incentive to conserve. Like the Hummer owner in the era of $4-a-gallon gasoline, residents who want to irrigate inefficiently still can, as long as they’re willing to pay more for it.

Price becomes the motivator — not the threat of their neighbor tattling to the water cops if they irrigate on the wrong day.

San Diego has tiered rates currently, though they are not as steep as Irvine Ranch’s and are not tied to efficient use. Customers in Irvine Ranch pay 940 percent more for their wasteful use than the lowest users pay. San Diegans pay 22 percent more for water in the highest tier compared to the lowest.

The council members all said a change should be evaluated regardless of how San Diego’s water supply picture develops during the next year. Water managers have optimistically pointed to the development of an El Niño, a weather pattern that often brings wet winters, as a sign that next year may be wetter and potentially loosen water restrictions.

“If we don’t have a cut next year, that’s great news — but we occupy an arid region with a growing population and competing demands from other communities,” Gloria said. “If we get lucky with an El Niño, fantastic. But we have to make some tectonic shifts in the way we use water. And I think folks expect us to do that.”

Such a move wouldn’t be without challenges. The city’s Water Department would have to increase staffing to handle requests for exemptions, while boosting public education. And tailoring the approach to businesses and industry would be more difficult than single-family homes.

Water-use footprints can vary from business to business. A restaurant will use more water than an accounting firm occupying the same space. Business groups will push for a method that accounts for what they call “process water” — the water that surgeons use to disinfect their hands, that biotechs use to keep equipment cool, that bottling companies use to create Coca-Cola.

Frye said she believes the council will encounter resistance. “I think it’s going to be a tough sell,” she said. “Those who are going to be affected by it will push back mightily.”

But some business groups say they support a tiered-rate structure, if done fairly.

“If the allocation is set the right way, the tiered-rate structure makes sense,” said Craig Benedetto, a lobbyist for the San Diego Building Owners and Managers Association. “You have to accurately gauge usage by business — by the individual type of building and the type of tenants you have.”

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