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Archive for the ‘Water rates’ Category

Critics of San Diego water rate increase “should know better”

Posted by George J Janczyn on September 20, 2010

“The U-T should know better” said Don Billings, board member of the Independent Rates Oversight Committee (IROC). Speaking during today’s meeting at the Metropolitan Operations Complex, Billings criticized news media and political figures for promoting “false political narratives” that target the City’s Bid-To-Goal (B2G) Program and pension costs as the reason for upcoming water rate increases.

The comments, apparently alluding to a U-T editorial that called the B2G Program a “defenseless water bonus program” and earlier criticism from Councilmember Carl DeMaio, were made as the committee discussed details for an additional $100,000 audit of the Public Utilities Department to be done by the Office of the City Auditor. The new audit will supplement information already obtained from an earlier audit as well as a review of the Bid-To-Goal Program that was performed by the respected independent third-party consultant Brown and Caldwell as recommended by the Audit Committee on May 10.

The new audit will necessarily be limited in scope due to the relatively small amount budgeted for it. As the committee struggled with identifying the appropriate focus for the new audit, members expressed a firm commitment to represent ratepayer interests, but also understanding that increases will be impossible to avoid. Board member Todd Webster wondered aloud whether the expense of all the studies will be worth it when all is said and done.

The committee also received an update on the recently completed Brown and Caldwell assessment of the B2G program that was generally positive and included this praise for the way the program has been managed: “While a number of high performing utilities in water and wastewater sector have performance metrics, the Goal monitoring, measuring and renewal process — an essential feature of the B2G Program — is neither as common nor as rigorous among other agencies.” Under General Observations, the report noted:

…the PUD and its various Divisions have done a commendable job establishing a large majority of Goals which will lead to tangible organizational improvements and sustained benefits to their customers, both internal and external. The City can feel good about it; based on our knowledge of other high performing utilities of similar size and complexity, many would likely not do as well under the same level of scrutiny.

A full copy of the Brown and Caldwell report is available here.

Outgoing Interim Public Utilities Director Alex Ruiz also expressed frustration with the continuing scrutiny and public criticism, saying that people fail to realize that employees have made significant contributions far beyond what is called for as part of their normal jobs as a result of the program and noted that all recommendations from the earlier audit have been implemented.

Posted in Water, Water rates | 1 Comment »

Committee sends water use restrictions and a rate increase request to the San Diego City Council

Posted by George J Janczyn on September 9, 2010

A weakened water use ordinance and a request for a rate increase were among the items forwarded to the City Council yesterday by the Committee on Natural Resources and Culture (click here for agenda and supporting documentation). Councilmembers Donna Frye, Sherri Lightner, and Carl DeMaio were in attendance; Marti Emerald was absent.

Water Use Restrictions

When Councilmember Donna Frye originally proposed that the temporary Drought Response Level 2 measures imposed in June 2009 be made permanent, the idea was to acknowledge the increasingly uncertain reliability of imported Colorado River water due to drought, climate change, and excessive use as well as new challenges in obtaining water from the California Delta via the State Water Project. It was to send a message encouraging city residents to make a lifestyle of using water more conservatively, in accord with living in an arid region where reserves are limited and supply lines are extremely vulnerable to disruption or catastrophic cutoff.

For months Ms. Frye conducted speaking tours and stakeholder meetings to explain why those limitations should remain in place, and on July 19 the Independent Rates Oversight Committee endorsed the proposal. However, for yesterday’s committee meeting, something led Ms. Frye to remove the three-day-per-week watering restriction from the proposal. For one thing, Ms. Frye acknowledged that she was influenced by many stakeholder groups that strongly opposed the ordinance as being “onerous and burdensome.”

Opposition to the proposal also included local landscaping organizations. A letter from Jim Taylor and Glen Schmidt from the American Society of Landscape Architects, San Diego Chapter, argued that weather conditions in San Diego vary significantly between the coast and inland portions of the city and the 3-day per week schedule allows no flexibility for watering plants in San Diego’s varying climate zones.

“Hydro Zones” that permit watering amounts to vary according to the different temperature zones should be included in the ordinance, according to a letter from Sandra Grow and Diane Downey from the California Landscape Contractors Association. During public comment, Sandra also added that using technology (e.g., weather based irrigation controllers) combined with an intensive educational program could be enough to produce sufficient conservation savings.

Bruce Reznik from San Diego Coastkeeper was one of the public speakers in favor of the ordinance, although he expressed disappointment at the removal of the 3-day restriction. He said that conservation remains the best way to get more water in the system but unfortunately there’s not much left in the ordinance to encourage it. Saying “we live beyond our water means” Reznik observed that we suffer from “desert denial.” At some point, he suggested, we’ll have to face a choice between water for health and safety versus water for lawns.

The Committee voted unanimously to forward the scaled-back proposal to the City Council. It’s possible the Council may consider adding the “hydro zone” concept or other ways to make it more flexible, but as it now stands, the only permanent restriction for all times of the day is that landscape irrigation must be before 10:00 a.m. and after 6:00 p.m. during the months of June through October, and before 10:00 a.m. and after 4:00 p.m. during the months of November through May. With the real limitations on water use in “normal” times stripped out, that leaves the ordinance’s water conservation message largely symbolic.

Water Rate Increase

The City of San Diego purchases between 85-90% of its water from the San Diego County Water Authority (CWA). CWA, in turn, purchases its water from the Metropolitan Water District of Southern California (MWD).

On April 13, MWD imposed rate increases effective January 1, 2011. On June 24, CWA responded with its own rate increase, “passing through” the MWD increases to its member water agencies in San Diego County, including the City of San Diego.

Now, the San Diego Public Utilities Department is requesting a rate increase to cover the price hike for wholesale water purchased from CWA. Alex Ruiz, interim director of the department, said that the rate increase covers only the higher price from CWA and that none of the increase would go to pay for other departmental expenses.

The picture then gets messy. CWA filed a lawsuit against MWD charging that it used improper methods to calculate its rate increase. MWD will apparently retaliate by refusing to pay an incentive/subsidy agreed to earlier that would have enabled the Poseidon Desalination Plant to sell water at an affordable price (thus putting the county water agencies with contracts to purchase desalinated water in a financial bind, so as a bailout CWA is now in the process of taking over the contracts and agreeing to purchase all water produced at the desalination plant. It will then spread the desal expense to be shared among all county water agencies).

Meanwhile, several county water agencies are complaining that CWA itself is improperly padding its rate increase with internal expenses and that it’s not a true “pass through” rate increase.

Opposing the City’s rate request, Carl DeMaio disputed that the water rate increase will only go to offset the increase in the price of wholesale water that the city purchases from the County Water Authority. He gave a PowerPoint presentation to highlight some of his assertions, saying the increase also will go to pay for increased labor costs, pension costs, bonuses, and salary increases. A little off the point, he also invoked the complaint about water users reducing consumption and then being rewarded with a price increase.

DeMaio recently appeared on two TV stations in advance of today’s meeting to press his campaign against the increase:

Although the Independent Rates Oversight Committee (IROC) previously endorsed the rate request, they did have concerns about MWD’s pricing structure, supported CWA’s lawsuit against it, and thought San Diego should be more involved. Andrew Hollingworth presented a letter indicating that he could support the rate increase only if the City would address that issue as follows:

  1. The Mayor and City Council work with San Diego County state legislators to seek a mandate for an outside review of MWD’s rates and cost structure
  2. The Mayor and City Council review resulting recommendations and sponsor state legislation mandating implementation of the recommendations
  3. The Mayor and City Council formally support CWA’s negotiations and lawsuit against MWD regarding the improper cost allocations

Sherri Lightner made the motion to forward the request to the City Council without a recommendation. That was possibly to help DeMaio avoid voting against the Council being able to consider the item, but he voted no anyway. Only two votes were needed, however, so with Frye voting yes the item goes to the City Council.

Water Budget Based Billing

This item ties in somewhat with the water rate issue. Alex Ruiz spoke briefly about a pilot study launched by Mayor Sanders and Donna Frye that is looking at the feasibility of designing water budgets for households that would allocate and price water in such a way as to encourage conservation without penalizing those who already use water efficiently (and presumably penalize waste).

The designers of the pilot studied the Irvine Ranch Water District which has been successfully using a water budget for years. Much work remains before a full report can be prepared, but you can read an overview in this letter to the City Council from Mayor Sanders and Councilmember Frye.

Local reports about yesterday’s meeting:

 

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IROC examines San Diego water rates, desalination issues

Posted by George J Janczyn on August 10, 2010

It’s like dominoes.

The Metropolitan Water District of Southern California (MWD) is raising rates for wholesale water. The San Diego County Water Authority (CWA) which purchases most of its water from MWD will pass-through the increase to the 24 water agencies it serves in San Diego County. Local agencies, in turn, are announcing their own pass-through rate increases and the San Diego Water Department is pursuing a rate hike as well. The new rates would be effective Jan 1, 2011.

The rate hike situation was discussed at Monday’s (Aug 9) meeting of the Independent Rates Oversight Committee (IROC).

Marsi Steirer, Interim Assistant Director of the Public Utilities Department, shared copies of a Notice of Public Hearing that will be mailed to water customers informing them of a November 15 hearing to consider the proposed water rate changes. The notice has a well-organized presentation of details about rates and charges, and includes a form that can be used to file a protest against the increase.

Committee members then discussed the related draft IROC Report on Water Rates Study. The report states that MWD is improperly passing expenses to San Diego by including costs other than the price they pay for water. Factors said to contribute to the disputed costs include:

  • MWD’s compensation structure
  • MWD’s scheduling of the CIP program and ‘pay-as-you-go’ financing
  • MWD’s misallocation of water supply costs to their transportation rate

The report recommends that the City seek a state legislative mandate for an audit of MWD’s rate and cost structure, and that the Mayor and Council support CWA’s lawsuit against MWD’s improper cost allocations (so far I’ve only seen the report in hard copy; I’m checking to see if IROC plans to put it on their web page; else I’ll ask for a copy to post). [11/19: here’s the report]

Andrew Hollingworth was both outspoken and soft-spoken about MWD. He said we’ll never be able to control the retail price of water until MWD’s wholesale price structure receives critical examination.

He also expressed concern about ratepayers paying more and more even though they’re using less. He predicted that without an audit, we face the prospect of never-ending price increases from MWD that will lead to a ratepayer revolt. An audit, he said, is the only way to move a body as big as MWD to change. There’s no desire to harm MWD, he said, he just wants to “apply some heat without causing damage.”

Don Billings said “MWD seems to exist in a bubble” inside which “compensation rates are rich.” The bubble needs piercing, he said, but he doesn’t foresee much coming from an audit, if one could even be done.

Chairman Jim Peugh cautioned that it might be unrealistic to expect the legislature to authorize more spending in order to audit MWD; Marsi Steirer drew attention to the 4 San Diego members on the MWD board, saying they have been closely following MWD’s pricing and their influence should not be discounted.

The discussion ended with two motions, one to approve the pass-through increase and send it on to the Natural Resources & Culture Committee. If everything proceeds according to schedule, the City Council would take up the matter at their September 21 meeting and the November public hearing would be on. All but Hollingworth voted in favor of this motion.

The other motion, to press forward with a request for the state legislature to mandate an MWD audit did not pass. With meeting time running out and too many details and questions not addressed, only Todd Webster and Andy Hollingworth were ready to vote yes. The committee agreed, however, to return to the issue at an upcoming meeting.

______________________________

In other meeting news, the committee received a desalination update from Bob Yamada, Water Resources Manager at CWA. The talk, interspersed with members’ questions and comments, was mostly a recap of previously publicized information about the possible CWA Water Purchase Agreement with Poseidon Resources for desalinated seawater from the Carlsbad Desalination Plant.

Gail Welch observed that electricity for the plant promises to be a major expense that will keep rising. She also noted that SDG&E is not yet in compliance with California’s mandate for 20% of electricity from renewable resources (which may become 33%). Mr. Yamada said that situation hasn’t been fully analyzed yet but CWA is working on it.

Other details that came out during questions and comments:

  • Desalinated water from the Carlsbad plant will be piped to the Twin Oaks Treatment Plant north of San Marcos, which will require Pipeline 3 of the San Diego Aqueduct to flow in the opposite direction. The desalinated water will then be blended with treated water from Twin Oaks, and then shipped back south into the CWA system through Pipeline 4. Due to the distance from the desalination plant to Twin Oaks, the desalinated water may require additional treatment en route.
  • The MWD subsidy for the desalinated water is still an open question because of CWA’s lawsuit against MWD. Unable to predict what will happen, although MWD is likely to make a decision about it soon.
  • The output of the desalination plant will probably vary somewhat depending on the season and demand, but the average per day will be 50 mgd.
  • All CWA member agencies will share the supply and delivery cost of the desalinated water. However, agencies that don’t buy treated water won’t be charged for the treatment portion of the desal cost.
  • When the Encina power station goes offline, lots of re-permitting (e.g., water intake) will be required and costs will rise, but the term sheet appears to not address that.
  • CWA is planning to hold desalination plant workshops beginning Sept-Oct. IROC would like to be on the list for one of those.

 

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San Diego regional water news roundup June 18-23, 2010

Posted by George J Janczyn on June 24, 2010

 


City looks into earth-friendly solar power / The Coast News“OCEANSIDE — SunEdison presented an overview of a proposed solar photo-voltaic system at a community workshop held June 9. The solar system promises to fuel part of the San Luis Rey Water Reclamation facility at a lower cost and reduce the plant’s carbon footprint.”

Indirect potable reuse: the solution to San Diego’s water crisis [student contest essay] / Voice of San Diego“Purified wastewater is completely safe for drinking and has the potential to alleviate environmental strains and aid in reversing San Diego’s water crisis.”

Helix votes to hike water rates — again / East County Magazine“By a 3-2 vote, Helix Water District’s Board on June 16 voted to increase water rates as recommended by staff. Board members Kathleen Coates Hedberg and De Ana Verbeke opposed the rate hike, while members Richard Smith, John Linden and Chuck Muse voted in favor of raising rates. The rate hike would average 8.8% per household, or an average of $10.06. But higher water users may pay up to 12% more.”

Lutar: Taxpayers support and need Carlsbad desalination project [commentary] / San Diego News Network“As an independent, non-profit organization fighting for the rights of California’s taxpayers, the San Diego County Taxpayers Association believes the Carlsbad Desalination Project is an innovative public-private partnership that protects taxpayers from financial risk while providing a desperately needed new drinking water supply.”

County Water Authority prepares for major quake / 10News“The most recent earthquakes to shake San Diego have raised more awareness of the possibility of a major earthquake hitting southern California, but water officials said they have already begun preparing.”

Water conservation in Calexico to remain until treatment facility is operational / Imperial Valley Press“Water conservation here will remain in effect until technicians finish work on a facility that may not be completed until the end of July, an official said Tuesday. Calexico’s 10 million gallon clarifier was severely damaged during the 7.2-magnitude April 4 earthquake which prompted the call for residents to conserve water.”

Poseidon desal deal? Govt may rescue junk bond project / Surf City Voice“Due to soaring cost estimates and lack of private financing for a proposed 50-million-gallon per day Carlsbad desalination project, a government water agency may negotiate a takeover deal with the project’s developer, Poseidon Resources, Inc.”

Agencies ask Water Authority to save desal project / North County Times“Local cities and water districts are asking the Water Authority to take over their contract with Poseidon Resources Corp., said officials from the nine agencies involved. The Water Authority is scheduled to consider that request at its board meeting Thursday, according to its agenda.”

CA Attorney General’s office threatens lawsuit against Padre Dam after water district defies Native American Heritage Commission, continues construction at site deemed sacred / East County Magazine“Community leaders testify on Viejas’ behalf, ask Padre’s water board to find alternative solution;
Viejas to ask judge on Friday to extend injunction”

More questions about public pensions — at Helix Water [commentary] / La Mesa Today“The Saturday edition of the U/T reported a planned 8.8% hike in water rates for the Helix Water District (HWD). This outrageous action is another instance of our elected representatives putting the well being of public sector employees above their constituents. While the HWD Board asks ratepayers for more money, they continue to pay outrageous benefits to their employees.”

 

Posted in Helix Water District, Indirect potable reuse, Poseidon Desalination Plant (Carlsbad), Regional water news roundups, San Diego County Water Authority (SDCWA), Water, Water rates | Tagged: , , , | Leave a Comment »

Water rates comparison in San Diego County

Posted by George J Janczyn on June 19, 2010

One unit = 100 cubic feet (HCF) = 748 gallons.

Chart is from the Helix Water District Water Rate Study published June 2010.

28 units or HCF is considered average domestic home usage for a 2-month billing period. Helix Water District bills per unit, San Diego Water Department bills per HCF. Both measures represent the same amount.

In communities served by the San Diego Water Department, the first 14 HCF used costs $3.293 per HCF; the second 14 HCF is $3.571; and above 28 HCF is $4.009 (current rate will increase in the near future).

In communities served by the Helix Water District, the first 10 units used costs $2.10 per unit, 11-30 units is $2.92; 31 units and above is $3.88 (based on the proposed rate increase).

 

Posted in Helix Water District, Water, Water rates | 4 Comments »