The Morning Report
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San Diego has some of the most expensive water in California – and in the country.
A typical San Diego household pays about $80 a month for water. The national average is less than $40 a month, according to a recent survey by the American Water Works Association.
Water in California is more expensive than elsewhere, but San Diego still has among the highest rates in the state, according to another recent survey. The most expensive water in the state is found in communities along the state’s Central Coast, like Santa Barbara.
By all indications, water prices in San Diego will keep rising.
In its worst-case scenario for the future, the agency projects its water costs could nearly double again in the next decade.
The Water Authority buys water from a variety of sources and then resells that water to local water agencies, like the city of San Diego’s water department.
Those local agencies have their own ways to control costs – or increase them.
Within the county, the difference between the highest and lowest bill is enormous, depending on where a customer lives. A family in the rural North County community of Yuima pays $110 a month for the same amount of water for which a family in Lakeside pays $58, according to a recent survey of rates by the Otay Water District. The city of San Diego’s rates fall in between those two extremes.
Water rates are notoriously difficult to fairly compare. Each water district has its own circumstances, including some beyond its control. Weather, population, topography, income, when a community was first settled, political decisions and even the kinds of soils all affect rates.
But the general trend across San Diego has been ever-rising rates. Not only that, but rates seem to be rising faster here than elsewhere in Southern California.
One of the biggest drivers is the Water Authority’s effort to buy itself out of a bad marriage.
For years, the Water Authority has been trying to distance itself from the Metropolitan Water District of Southern California, the Los Angeles-based agency from which the Water Authority gets much of its water.
Water Authority officials blame Metropolitan for failing to prepare for a drought in the early-1990s and screwing San Diego then and now. To avoid being so reliant on Metropolitan for water, the Water Authority went on a spending spree to find new sources of water. It also built or expanded area dams to prepare for a drought or other emergency. The Water Authority has done so largely with the support of the business community and ratepayers.
“Increasing reliability comes at a cost, and we have never shied away from telling that to stakeholders or ratepayers,” said Mike Lee, a Water Authority spokesman.
In 2003, the Water Authority agreed to buy enough Colorado River water for roughly 1.6 million people a year from another water agency in Imperial County. That was the largest water purchase of its kind in United States. Then, a year and a half ago, it helped open the largest desalination plant in the country, in Carlsbad.
Those supplies are more expensive: The new water is about 62 percent of the Water Authority’s supplies, but 72 percent of the agency’s water costs.
In San Diego, the most expensive water comes from the desalination plant. Its water costs about $2,100 for an acre foot of water, which is roughly as much as eight people need in a year. The cheapest water still comes directly from Metropolitan, which costs about $1,000 an acre foot.
Meena Westford, a Metropolitan representative in San Diego, said the Water Authority has created a situation where it is contractually obligated to buy the most expensive water in Southern California –desalinated water – while it’s only optional to buy the cheaper Metropolitan water.
“As a San Diego resident, I don’t want our most expensive water supplies to be our baseload and our cheapest supplies to be our insurance policy,” she said. “That’s why we will have the most expensive water in California.”
But there’s a gray area of water that is at the heart of San Diego’s higher rates and an endless legal conflict. That’s the Imperial County water.
The Water Authority calls the water it gets from Imperial County its own “independent” supply of water. Metropolitan scoffs at that and says San Diego’s so-called independence relies in large part on the use of Metropolitan’s system. Because the Water Authority never built a pipeline to the Colorado River, it has to rely on Metropolitan to bring the Imperial County water to San Diego.
Metropolitan charges money for that. The Water Authority believes Metropolitan is overcharging it by up to 465 percent to bring that water to San Diego.
The Water Authority filed a lawsuit over the issue several years ago. One court agreed Metropolitan’s rates were too high. Metropolitan appealed. An appellate court’s decision is expected by mid-August. That decision is likely going to be appealed to the state Supreme Court.
At stake is about $7 billion over the next several decades. If the Water Authority wins, rates may do something they never do – go down. If it loses, it’s going to be stuck paying more than it wants for another two decades to an agency it is trying to disentangle itself from.
That’s one of the reasons the Water Authority has launched a statewide “Stop the Spending!” campaign blaming Metropolitan for rising bills in San Diego. In March, the Water Authority signed an 11-month, $220,000 deal with a law firm and with Southwest Strategies, a San Diego-based public relations firm, to “communicate clearly with the public and other public agencies” about the lawsuit and other matters. One of the PR campaign’s manifestations is a local TV segment featuring a pizza shop owner complaining about rising rates.
The Water Authority has also sent several letters to 1,100 people in Southern California – mostly politicians and city officials – trying to persuade them to investigate Metropolitan for “overspending, overcharging and unplanned borrowing.”
Across California, other water agencies praise San Diego’s plan to diversify its supplies. But they also question how expensive it is.
Shane Chapman, general manager of the Upper San Gabriel Valley Municipal Water District, took issue with the Water Authority’s campaign. He praised the Water Authority, for diversifying its water supply.
“However,” Chapman said in a letter to the Water Authority, “I am left with the impression that SDCWA’s recent public relations campaign ‘stop the spending’ and the on-going barrage of lawsuits challenging Metropolitan’s water rates and charges, are very expensive ways to direct attention away from the other cost drivers in your constituent’s [sic] water bills.”
He pointed out that San Diego customers are now paying about $27 more a month more than they were back in 2009. Customers in Los Angeles County – who also receive Metropolitan water – have only seen their rates increase by $11 during that same period.
Maureen Stapleton, general manager of the Water Authority, replied to Chapman. Without disputing any of his numbers, she acknowledged that the new water supplies have “contributed to the rising cost of the Water Authority’s supply” but shifted blame to Metropolitan.
Metropolitan’s general manager, Jeffrey Kightlinger, said the Water Authority is just trying to duck costs by slamming and suing his agency.
“Three million people want to shift cost to 16 million people,” he said, referring to the population of San Diego and the other parts of Southern California that Metropolitan serves.
The Water Authority views the situation in reverse, as 16 million people trying to overcharge 3 million San Diegans.
Since both parties are at endless odds, it seems only a court can settle the matter.
Until then, it’s hard to know how much rates will keep rising.
If the Water Authority wins its lawsuit, rates could still go up as much as 58 percent or as little as 11 percent, depending on other factors. If the Water Authority loses, rates could rise by as much as 87 or as little as 28 percent. For next year, the Water Authority proposes a modest 3.7 percent increase, much of which it says is related to Metropolitan’s charges.
Beyond politics, San Diego’s rates are high, in part because of its distance from major supplies. There are over 250 miles between San Diego and its main source of water, the Colorado River, and 600 miles between San Diego and its second major source, the rivers of Northern California.
San Diego also suffers from a historic combination of poor planning and bad luck. In the early 1900s, Los Angeles built an aqueduct to drain water from the Eastern Sierra, a decision that provides the city cheap water to this day. Orange County has large groundwater basins, which can basically provide free water. San Diego never built its own pipeline system to a distant river nor does it have any major groundwater basins to tap.
So, for now, it pays a markup to buy water from others.