Businesses, Consumers Face Mandatory Conservation MWD & Municipalities: Rate Increases on the Horizon

Southland consumers and businesses for the first time in 18 years will face mandatory water conservation restrictions this summer, a reflection of drought, the region’s limited water reserves and worsening environmental and regulatory conditions in Northern California’s Sacramento-San Joaquin Delta.

The board of directors of the Metropolitan Water District of Southern California today reduced supplies delivered to its member public agencies for the first time since 1991, effective July 1. The financial impacts of higher Delta costs due to supply reductions caused by new regulatory restraints also were primary factorsbehind a rate increase approved by the Metropolitan board in a separate action. The effect on Southland consumers will depend on how much of Metropolitan’s imported water is purchased by their local water agency to augment supplies, such as groundwater..

“Up to 19 million Southern Californians this summer will feel the impact of a new water reality that has been in the making for years, if not decades,” said Metropolitan board Chairman Timothy F. Brick.

Metropolitan General Manager Jeffrey Kightlinger said the tight water supply situation has had a cumulative, region-wide effect. “When you consider the cuts we had already made to our agricultural customers and to groundwater replenishment deliveries, along with the reductions being asked for from consumers, the total amounts to about a 20 percent reduction in water usage for Southern California,” said Kightlinger. 

The approved allocation action offers local water providers the flexibility to choose among various conservation strategies, from tiered pricing to limits on outdoor water use, to ensure that demands stay in balance with limited supplies.  As the region’s wholesale supplier of water imported from Northern California and the Colorado River, Metropolitan provides water to its 26 member public agencies and helps supplement local supplies to meet the needs of 19 million Southern Californians in MWD’s six-county service area.

After consecutive critically dry years in the Sierra Nevada, the state Department of Water Resources’ most recent snow survey of the winter season indicates snowpack water content statewide is 81 percent of normal. DWR officials rely on snow water content to determine the availability of supplies to be delivered from Northern California via the State Water Project.

In the face of Delta environmental restrictions, the statewide drought and low reservoir levels, DWR has currently established a 20 percent allocation of State Water Project deliveries to Metropolitan. On the Colorado River, Metropolitan cannot expect
additional deliveries as that watershed has yet to recover from eight years of record drought.

Metropolitan’s allocation plan, first approved by the board in February 2008, will limit supplies and impose penalty rates on member agencies for any water use above the target levels. Funds collected by Metropolitan through penalty rates would help
finance conservation programs within the boundaries of that member agency. more .
. . . .
In its rate action, Metropolitan’s board approved an 8.8 percent increase in the district’s Base wholesale water rate plus a $69-per-acre-foot Delta surcharge. 

The Delta surcharge reflects Metropolitan’s costs in dealing with the loss of State Water Project supplies due to the environmental collapse of the Delta. 

“The supply losses caused by that collapse have required us to purchase expensive replacement supplies, accelerate funding of alternative water supply programs and finance Delta sustainability projects, including the protection of endangered species,” Kightlinger said. 

The effect of the rate adjustment and Delta surcharge on Southland consumers will depend on how
much of Metropolitan’s imported water is purchased by their local water agency to augment supplies, such as groundwater and recycled supplies.

For more information on Metropolitan, visit the district’s www.mwdh2o.com