California Saves Water–But Faces $300M Rate Hike

Californians are about to be punished for exceeding the 25 percent statewide mandatory water savings edict with $300 million in conservation-related rate hikes.

Since May 30, when Governor Jerry Brown instituted mandatory water use reductions to deal with the drought crisis, California residents have achieved an average 27 percent decrease in water use for each of the last six months. But water districts across the “Golden State” want about $300 million in rate increases to maintain bloated costs.

The Southern California Metropolitan Water District (MWD), the nation’s largest supplier of  treated water with 19 million customers in 14 cities and 12 water districts, received water rate increases in each of the last three years totaling almost $800 million, supposedly to pay for the higher cost of purchased water during the drought crisis.

With the MWD leading the way, most of the 122 California water districts also saw similar water rate increases in each of the last three years.

But with water purchases declining due to conservation, the higher customer bills appear to be paying for higher executive pay and other non-crisis costs.

When the San Jose Mercury News recently analyzed the region’s four major water districts, it determined that the average salary for each of the four managers is now about $415,000. That is almost two-and– half times the $173,987 salary Jerry Brown earns as Governor of the State of California.

More importantly, there also are now 134 executives at the four public water districts that earn over $250,000 per year in wages. This does not include the cost of funding lucrative lifetime pensions that in retirement can actually exceed the executive’s working pay.

But with California residents “doing the right thing” and over-conserving mandatory restrictions on water use, bloated water districts that jacked up water rates to spike spending are seeing lower net revenues.

Rather than shrink staff and reducing other costs to match the lower water revenues, the districts are asking for about $300 million in new rate increases, according to state water officials at a recent hearing of the Assembly Select Committee on Water Consumption and Alternative Resources.

According to Reuters, Contra Costa Water District, East Bay Municipal Utility District and the San Diego Public Utilities Department are among many districts that have passed or are now considering conservation-related rate hikes.

Director Mark Cowin of the California Department of Water Resources, under intense questioning from Democrat and Republican members of the State Assembly said, “Well, we have to make the case that sustainability is worth the price we are asking people to pay for.” He emphasized that blaming water extremes on “climate change can actually help state officials make that case to the public” for higher water rates for less water.