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Sunday, Nov. 15, 2009 | On a daily basis, it’s nearly imperceptible.
Taking a 10-minute shower in early 2007 cost a dime in San Diego. By July 2010, that same shower will cost 15 cents.
Earlier droughts in the 1970s and 1990s brought similar rate spikes. But after three years of increases, this spike hasn’t peaked yet and the end isn’t in sight. The San Diego County Water Authority, the major water supplier for San Diego and other local cities, forecasts its rates rising every year and doubling by 2018, an increase that will hit the pocketbooks of almost every home and business in the region.
Rates have been increasing faster than the authority expected. Even last year, it wasn’t projecting rates to be as high as they are now until 2012.
San Diego’s water is as cheap now as it will be for the foreseeable future. If San Diego’s City Council approves a proposed rate increase when it meets Tuesday, it’ll clear the way for the city’s sixth hike in the last three years. And it won’t be the last. Another already-approved increase is scheduled to go into effect next July. More increases are on the horizon.
The Metropolitan Water District, the Los Angeles-based wholesaler that supplies the water authority, expects to raise rates as much as 21 percent in January 2011. It currently forecasts 4 percent to 5 percent increases each year after that. Those increases are passed down directly to San Diegans from an agency whose rates used to be steady. Before the recent price hikes started, Metropolitan hadn’t increased rates for six years.
Water is getting more expensive. Since 2003, supplies from the Sacramento-San Joaquin River Delta and Colorado River have tightened, leading water suppliers throughout Southern California to tap more expensive sources and invest billions in infrastructure projects to boost supplies, storage capacity and reliability.
The water authority 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.
“We are investing in something,” said Dennis Cushman, the authority’s assistant general manager. “It’s fair to characterize it as the cost of a reliable water supply. There is a cost of an unreliable water supply.”
Rates are also increasing because local residents are using less water. The agencies that deliver water have budgets whose costs are mostly fixed: They have to pay down debt, repair broken pipes and compensate employees regardless of how much water is sold. Because calls to conserve have worked, Metropolitan is selling about 20 percent less water, said its chief financial officer, Brian Thomas. So its rates have increased about 20 percent to cover the $200 million revenue drop. That gets passed down to San Diego and the other local cities that rely on Metropolitan.
Other major projects currently being planned would also boost rates — though it’s not yet clear when their impact will be felt.
If a $10 billion canal is built to route water around the beleaguered 738,000-acre Sacramento Delta, Metropolitan expects to pay about $2.5 billion of the cost. That would require a 15 percent rate increase, Thomas said.
If the county water authority pushes forward with plans for a seawater desalination plant on Camp Pendleton, it expects to increase rates to pay the plant’s estimated $1.2 billion to $1.9 billion cost.
Metropolitan, which supplies the majority of Southern California’s water, used to pay just pennies for much of its water. Supplies from the Colorado River cost Metropolitan 25 cents for an acre-foot. That’s 326,000 gallons, or roughly enough for two families for a year.
But in 2003, the federal government began restricting how much water California could pull from the Colorado. Metropolitan, which supplies about 2 million acre-feet annually, had historically drawn surplus water from the river — water that it didn’t have rights to, but that other states hadn’t used. The federal decision delivered a hit to Metropolitan, which lost about a quarter of its supply.
It turned to the Sacramento Delta to fill the gap. That water was more expensive. Because the water is pumped 2,000 feet over the Tehachapi Mountains en route to Southern California, electricity costs are higher. So that water is as much as $40 an acre-foot, instead of 25 cents. As reliance on that increased, rates began to inch higher.
The steady creep accelerated in 2007 when the delta came into the state spotlight. A string of dry winters and limits on delta pumping to protect endangered fish forced Metropolitan and the county water authority to look elsewhere. They bought water from farmers who fallowed their fields and Northern California water agencies with surplus for sale. Those supplies cost Metropolitan as much as $340 an acre-foot. Water was suddenly not as cheap as when it cost 25 cents an acre-foot.
As Metropolitan’s rates have increased, local agencies have quickened efforts to wean themselves from the wholesaler. The water authority began such an effort after Metropolitan threatened a 50 percent supply cut to San Diego in 1991. Now the large and small water districts that serve county residents are more seriously considering other sources, such as seawater desalination and recycled sewage.
“There is no more cheap water anywhere,” said Mark Weston, general manager of the Helix Water District, which serves La Mesa. “The best hope is the ocean.”
The Olivenhain Water District, which delivers water to 60,000 customers in Encinitas, Carlsbad and Solana Beach, has a contract to get about 20 percent of its supply from the proposed Carlsbad desalination plant. Though desalination is one of the most expensive new sources of water available, Kim Thorner, the district’s general manager, says its cost continues looking more reasonable.
“Things that were outside the box four years ago, we’re looking at again,” Thorner said. “Not only because of the cost, but because we want local control. We don’t want to rely on water with delta smelt in it or that has to be pumped over the Tehachapis. That’s a lesson we’ve learned in the last couple of years.”
Because desalination is the most expensive water source, its cost provides the ceiling for water’s cost, said Richard Carson, a University of California, San Diego economics professor. The water authority estimates the cost of desalination at Camp Pendleton at $1,700 to $2,100 per acre-foot. That’s about double what it sells water for today.
“Water bills could easily double or triple, but they can’t go up 10 times,” Carson said. “At the cost of desalination, there’s plenty of water and there should be [other sources] cheaper than that.”