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Water supplier moves to raise rates

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LOS ANGELES -- Board members for Southern California's main water supplier voted Tuesday to tentatively increase their water rates by 5.8 percent.

The proposed increase still faces a March public hearing and a final vote in April. But Metropolitan Water District of Southern California officials said this week that rates had only been revised after their tentative approval once in the last 17 years.

The proposed rates would mark the agency's largest increase in more than a decade, and they would affect tens of millions of ratepayers in six Southern California counties, including San Diego County.

Metropolitan officials blamed the proposed $30 per acre-foot increase, which one official predicted would translate to about $1.50 a month for homeowners, on two factors:

- The increasing cost of electricity that is used to push billions of gallons of water from Northern California almost 2,000 feet up and over the Tehachapi Mountains and into Southern California. An acre foot is roughly 325,900 gallons, or enough to sustain two households for a single year.

- The increasing costs of treating water to make it drinkable. Metropolitan has recently introduced expensive "ozone" treatment capabilities at several of its plants. In general, the cost of water consists of what it costs to maintain the infrastructure that delivers it from dams and reservoirs to treatment plants, to pipelines.

Metropolitan's rate hike would not take effect until Jan. 1, 2008, and would increase the cost of Metropolitan's drinking water from $478 per acre-foot to $508 per acre-foot.

James Bond, the San Diego County Water Authority's board chairman, said the hike wouldn't result in a huge monthly increase for the average homeowner.

However, Bond said the Metropolitan increase could be just the first in a series of rate increases.

For example, the Water Authority is planning to adopt its own rate increase in June -- an increase that could be a lot higher than once thought because of the swelling costs of a $4 billion capital improvements projects list.

Meanwhile, the 25 San Diego County cities and water agencies that get their supplies from the Water Authority and Metropolitan will also have to weigh their own potential "trickle-down" rate hikes.

"It's cumulative," Bond said. "It's only a buck and a half a month. Then, it's $1 for the Water Authority, and $1 for somebody else. Pretty soon, it's noticeable."

In recent months, a number of local agencies have increased their rates and blamed it on previous wholesale rate increases from Metropolitan and the Water Authority. Those agencies included the Vista Irrigation District, Encinitas Olivenhain Municipal Water District, the Valley Center Municipal Water District, San Marcos' Vallecitos Water District, and the Rainbow Municipal Water District.

The city of San Diego is also considering water-rate hikes that would tack an extra $15 a month to a typical household bill -- a proposal that does not include the rate increase Metropolitan approved Tuesday.

Metropolitan's proposed rate hike, meanwhile, could have been much larger.

Metropolitan staff members proposed an option that the agency increase its rates by $50 per acre-foot -- a 10 percent increase -- not $30.

That figure reportedly shocked many San Diego County water officials.

Bond said Metropolitan didn't have to raise its rates -- at all -- from 1996 to 2003, and hadn't raised rates by more than 4.4 percent a year since 2004.

In addition to being the Water Authority's board chairman and one of the Water Authority's four representatives to the Metropolitan board, Bond is chairman of Metropolitan's business and finance committee, which debated the issue Monday and successfully recommended the more modest $30 per acre-foot increase.

Metropolitan officials, meanwhile, said they were surprised that San Diego and other water officials were shocked by the proposed increases.

Metropolitan Chief Financial Officer Brian Thomas said that the $50 per acre-foot increase fell within the long-range rate predictions he had been delivering to Metropolitan board members since 2004.

Still, Thomas said power costs had gone up higher than Metropolitan had even predicted a year ago.

- Contact staff writer Gig Conaughton at (760) 739-6696 or gconaughton@nctimes.com.

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