Met price hike to float local water rate increases

By: BRADLEY J. FIKES - Staff Writer | Saturday, March 15, 2008 8:02 PM PDT ∞

It's a near-certainty that households, businesses and farmers will pay more for water next year. But it will be months before they know exactly how much.

Metropolitan Water District, Southern California's largest water supplier, raised its wholesale price by 14.3 percent at its meeting last week. Based in Los Angeles, Metropolitan imports water for most of Southern California, including San Diego and Riverside counties. The increase goes into effect Jan. 1.

Regional agencies such as the San Diego County Water Authority buy from Metropolitan and other sources. These agencies sell water to local water districts, the direct suppliers to most end users. In this bucket-brigade system, costs follow along with the water. Only when all the agencies have completed their budgets will end users know what they'll be paying.

The county Water Authority will set its rates by June, spokesman John Liarakos said. Then the 24 agencies that buy from the authority will need to determine how the rates affect their own finances.

"Once it gets to the member agencies, it's 24 separate games played," Liarakos said.

Metropolitan estimates that the typical household in its district will pay about $1.50 a month more for its water. But this is just an average across Metropolitan's vast service area, which extends from Santa Barbara to the U.S.-Mexico border.

Metropolitan said it needed to raise rates because it is paying more for electricity; to protect an endangered fish in the Sacramento Bay Delta area; and to remove the Quagga mussel, a fingernail-sized mussel that invaded Southern California's water systems.

The agency approved a rate increase of 5.8 percent for water bought during this fiscal year.

About 75 percent of the San Diego County agency's water comes from Metropolitan, Liarakos said.

In the city of Escondido, utilities manager Mary Ann Mann and her staff are also trying to determine how the Metropolitan rate hike will affect local water rates.

Mann said the hike would be probably noticeably less than Metropolitan's increase, because the cost of Metropolitan's water is a fairly small portion of the end cost to the consumer. Treatment and delivery costs probably won't increase to the same degree, she said.

Moreover, Lake Henshaw will continue to supply about 20 percent of the city's water, and any increases in Escondido's cost won't necessarily correspond to increases in the cost of water from Metropolitan.

The city expects to end up paying $16.2 million in this fiscal year for water from Metropolitan via the San Diego County Water Authority, Mann said. That's an increase from $14.1 million in the 2006-07 fiscal year. The large increase in the current year had a lot to do with unseasonably dry, hot weather last summer. People used more water for their fields, groves and lawns, which were getting less rain, and Lake Henshaw was able to supply less water.

Carlsbad Municipal Water District, one of the local agencies that buys from the county Water Authority, expects to get its budget done by late July or early August, said Mark Stone, the district's general manager.

Businesses in the district are more concerned with the reliability of their water supply than the cost, Stone said.

Agricultural customers are the opposite of other business customers ---- they are extremely price-sensitive. Some, such as those who grow avocados, choose to be first in line to lose water from Metropolitan when supply is insufficient. In return, they get a rate cut, which amounts to about 33 percent in the most agriculturally intensive areas of North County.

Tom Bellamore, counsel and a senior vice president for the California Avocado Commission, said the commission wants Metropolitan to continue that discount program. Some cities and water districts that are Metropolitan members have suggested that the practice be ended, Bellamore said.

"We're working very hard to have the program remain in place," Bellamore said.

Staff writer Chris Bagley contributed to this story. Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.

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