San Diego regional water news roundup Jul 8-14, 2013
Posted by George J Janczyn on July 15, 2013
[NOTE: Please also see clarifying remarks by Roger Bailey in the comment section]
There wasn’t much water news reported last week in San Diego aside from the San Vicente hydropower project described in a separate story today.
However, the City Council’s Natural Resources and Culture Committee (NR&C) meeting on Wednesday July 10 had several items of interest on the agenda from the Public Utilities Department (PUD): an update on the city’s Water and Wastewater Cost of Service Study, a report on the Recycled Water Study, and a report on a Water Budget Based Billing study.
The Water Budget Based Billing study examines a billing method that offers an alternative to water use restrictions to motivate customers to reduce water consumption. However, the report was deferred until the next meeting even though Equinox Center Executive Director Lani Lutar appealed during the public comment period that it would better to consider it together with the Cost of Service Study.*
Upcoming San Diego water and sewer rate increases for 2014 will be based partly on information contained in the Cost of Service Study. The upcoming SDCWA rate increase for imported water will almost certainly have to be passed through to city customers, since PUD absorbing increases from prior years cannot be sustained without harming operations and maintenance. The Cost of Service Study proposals would not apply to multi-family dwellings or commercial customers.
During the public comment period, San Diego County Taxpayer’s Association Vice-president Chris Cate complained that the study was only being described at this meeting whereas the full draft report was not provided even to councilmembers. Following up on that point, NR&C chair David Alvarez asked PUD director Roger Bailey “can’t we at least see the draft Cost of Service Study?” Bailey’s reply: “To the extent that the mayor will allow us to release a draft report, we certainly will do that.” A PUD staffer added that PUD doesn’t normally make drafts available to the public.
The Cost of Service Study will be taken up again at the July 31 NR&C meeting, with or without a copy of the full draft.
An interesting fact emerged from the Recycled Water Study report: while the process of producing recycled water involves taking wastewater and putting it through primary, secondary, and tertiary treatment, only the tertiary component of recycled water costs are being passed along to recycled water customers. The current price recovers about 1/3 of the cost of producing recycled water. Potable water customers (i.e., everyone else) pay the primary/secondary treatment costs, meaning that recycled water, which is priced considerably lower than potable water, is subsidized by the “water base.” Recycled water customers outside the city of San Diego also benefit from the subsidy. If all costs associated with providing recycled water were incorporated into the price of recycled water, the price would be significantly higher than the current and proposed price (NR&C chair Alvarez did say he thinks higher prices for recycled water are definitely in our future).
Instead of forwarding the Recycled Water Study to the full City Council, NR&C sent it back to the Independent Rates Oversight Committee (IROC) for further vetting. Interestingly, the study was already on IROC’s agenda for Monday (today).
During the NR&C meeting it was revealed that PUD’s director Roger Bailey is resigning. His last day will be Aug 2 (he will be taking a new position as General Manager of the Central Contra Costa Sanitation District). Equinox’s Lani Lutar tweeted that his departure may have been motivated by friction with Mayor Filner, especially after Filner pressured him to resign from the SDCWA Board of Directors. Another tweet about Bailey from Lutar said “He totally saved the city from getting screwed during the desal negotiations” (a reference to reliability and availability fees San Diego will have to pay for Carlsbad Desalination Plant water even though the city will normally not purchase desalinated water except in emergency).
* Lani Lutar sent me this comment about my characterization of her comment on the Cost of Service Study: “You misunderstood my comments at the NR&C hearing. I contacted Alvarez’s office prior to the hearing to request that the water budget based billing item be continued to allow for more time to review. I was glad they didn’t take it up. While it’s directly related to the rate case, since structure changes can’t be made in time for the next rate case, it didn’t matter if the system was taken up at the same time. Yes, ideally, it would’ve been nice if the structure study came out first. But that’s another reason it’s good the rate case is only for two years.”
Here’s the (usually more populated) local water news listing:
|
The consultant, the desert aquifer and the future of San Diego’s water / Voice of San Diego : “As the Water Authority prepares to discuss the Bay Delta plan and, ultimately, vote on whether to support it, it will be receiving advice from Frahm. Brownstein’s contract with the Water Authority is vague about Frahm’s role. It states that Brownstein will provide legal services for the agency, but it also includes a clause stating that Frahm herself works for the authority as a “consultant.” Water Authority officials wouldn’t comment on what, exactly, she consults on…” |
El Cajon won’t put sewer charges on tax bill / U-T San Diego : “Nearly 200 El Cajon residents packed City Council chambers Tuesday to tell council members that a proposal to include sewer charges on semi-annual property tax bills should be flushed down the proverbial toilet…” |
|
|
It’s better than bottled! / San Diego Coastkeeper : “Aside from tasting great, recycled water has other benefits for San Diego. Over 80% of our drinking water is imported from the Colorado River or northern California, which uses energy and costs money. To address this, Coastkeeper advocates for potable reuse – a process in which highly-treated wastewater is added to local reservoirs to increase drinking water supply. Utilizing recycled water will help secure a local and reliable source of water for our city. And if I’m still here to write this blog post, maybe toilet to tap isn’t so bad after all.” |
|
GrokSurf's San Diego 
George Courser said
George, a great collection of articles and opinions as always. I appreciate your coverage and insight on recycled and potable re-use, something I see as inevitable for San Diego. My main interest at this time is the Salton Sea – and what remediation obligations are due from SDCWA, IDD, Metro – to salvage the Sea and prevent it becoming the next Owens Valley. Anything related would be appreciated. Best, george George Courser 3142 Courser Avenue San Diego, Ca 92117 858-273-2426 Date: Mon, 15 Jul 2013 13:08:09 +0000 To: gcourser@hotmail.com
George J Janczyn said
Thank you, George. I do have Salton Sea on my radar and try to make sure news reports about it make it into my weekly roundups. At some point I may muster up the energy to write a story about it.
Gj
Mark Watton said
Potable water customers at the city do not pay for any sewer costs. Sewer processing is now and will in the future be properly assessed to sewer users in the city and the other Metro JPA member agencies.
Regarding the desal rate: The desal cost impact has not been settled at SDCWA. A Cost of Service Study will be initiated soon and SDCWA board will set rates based on the study. It is premature to speculate on the desal rate impact to any SDCWA member agency.
George J Janczyn said
Nothing was stated above about sewer fees for potable customers; rather, PUD’s report to NR&C was that potable water users subsidize recycled water customers by absorbing the primary and secondary treatment costs for recycled water. However, city users definitely do pay a substantial sewer base fee and sewer service charge in their monthly bill.
Ms. Lutar might have her own response on your desal point, but I don’t think she was speculating about what SDCWA rates would be for desal.
Mark Watton said
Potable water customers do not pay primary, secondary or direct sewer system collection costs. Sewer users pay those costs. The debate is to what extent potable and recycled water users share or subsidize each system including the cost of recycled water production beyond the required sewer processing cost which for recycled water does not involve primary or secondary processing.
SDCWA desal rates soon to be under study relate directly to the SDCWA wholesale treated and untreated water rates which relate directly to what the city or other members agencies of SDCWA will pay SDCWA for desal. So, it is a little early to speculate what the city will pay for the desal cost impact to regional wholesale rates ahead of the study and SDCWA Board action.
George J Janczyn said
That’s very interesting. In that case, what is the Sewer Base Fee and Sewer Service Charge for potable customers in the city’s bill for?
And if you view the video of the PUD presentation at the NR&C meeting, you’ll see that it was stated that potable water customers subsidize the primary and secondary treatment portion of the recycled water expense.
Mwwatton said
The bill is a combined water, sewer and storm drain bill. Sewer billing is the base fee plus a variable fee based on your winter water usage. I was there for the presentation. It was confusing for most people. I’d be happy to speak with you. May be easier than a series of emails. 619.670.2210
Sent from my iPhone
George J Janczyn said
I guess it’s a technicality. Water customers pay sewer charges based on their water usage, but the sewer fee is itemized separately.
Roger Bailey said
Just a few clarifying comments: Potable water customers do not and have not paid for primary and secondary treatment at the North City and South Bay Reclamation Plants. The Ocean Pollution Reduction Act was passed in 1994 which allowed the City to reapply for a Section 301(h) secondary treatment waiver at Pt. Loma Treatment Plant. As a condition of the waiver, the City was required to build a reclamation program with a capacity to treat 45 MGD by 2010. This was accomplished by the completion of the 30 MGD North City Plant in 1997 and the 15 MGD South Bay Plant in 2002. The costs to build the two treatment plants as well as the primary and secondary treatment costs were funded by the Wastewater Fund and the Metro JPA. Please note that the Water Fund and Wastewater Fund are two separate legal entities that have separate rates and reporting.
A 1995 federal court order required the City to construct a recycled water distribution system at North City comprised of 66 miles of pipeline, 9 MG reservoir and 2 pump stations at a cost of $69.8M; this was funded by the Water Fund. The City Water Fund has since expanded this system and has invested an additional $52.9M. In 2001, the City lowered the recycled rate from $1.34 per HCF to $.80 per HCF to incentive recycled use. This resulted in a substantial subsidy dy by potable water customers who continue to pay for the bulk of the infrastructure and operating costs of the recycled distribution system. The modified Cost of Service approach as presented at the July 10, 2013 NR&C meeting proposes to recover, on a forward looking basis, the costs related to the production and distribution of recycled water.
In summary, if the costs are not raised, the water (potable) customers continue to subsidize costs related to the distribution of recycled water (recycled O&M, existing debt service, proposed debt service and proposed pay go – note: tertiary treatment is currently being paid for by Wastewater).
If the costs are NOT raised, the sewer customers will continue to subsidize the tertiary treatment costs, and water customers will continue to subsidize the distribution costs.
On a typical single family residential (SFR) customer bill you will see charges for Water, Sewer and Storm Water. Sewer rates for each SFR customer is based upon the amount of water they used during the previous winter (Winter Monitoring Period – December through March). For more information on the Winter Monitoring Period, please see the department’s website: http://www.sandiego.gov/water/rates/wintermonitoring.
George J Janczyn said
Roger,
Thank you very much for clearly explaining this very nuanced subject.
I know many people are sorry to hear that you are leaving San Diego and that you will truly be missed. Best wishes for continued success in your future endeavors.