OCWD Pressured to Hold Back Rate Increase

Note: The Surf City Voice website was destroy by hackers in December, 2019 and is under reconstruction. This article was first posted April 18, 2018.

Tonight (April 18, 2018) at 5:30 p.m. the Orange County Water District (OCWD) Board of Directors will consider various options for raising water rates. This article is one of an ongoing series of Surf City Voice articles intended to explain the process of managing the basin, including setting water rates.

By John Earl

Surf City Voice

The Orange County Water District (OCWD) manages the Orange County Groundwater Basin, from which it supplies 75 percent of the drinking water for 2.4 million residents in northern Orange County.

OCWD Director Vincent Sarmiento. Photo: John Earl

OCWD’s 19 member agencies, including water districts, cities, and farmers are “producers” who pump water from the basin for their respective ratepayers.

The producers buy the other 25 percent of their water supply from the Metropolitan Water District of Southern California (MET), which pipes that water directly into the producers’ distribution systems. Those systems need lots of money to keep up, money that comes from selling water and raising rates.

Every spring, by law, the OCWD sets the Replenishment Assessment (RA) for its producers. The RA is what OCWD charges the producers to replenish (refill) the basin, ostensibly to safe levels, and to otherwise manage the basin.

The producers, in turn, set water prices for the ratepayers they serve. Those rates vary according to the type of rate system each agency uses.

There is also the Additional Replenishment Assessment (ARA). All producers but for a handful of farmers pay both fees. In common usage, the RA means both RA and ARA.

The OCWD sets the Basin Pumping Percentage (BPP)at the same time it sets the RA. The BPP is the percentage of total water supply (including MET water) that each producer can pump from the basin without paying a Basin Equity Assessment (BEA).

The other 25 percent of water supply that the producers buy from the MET is potable; when imported, it goes directly to each producer’s distribution system at a cost of $1,050 per acre-foot (AF).

The untreated MET water that OCWD imports and filters into the basin cost $746/AF.

OCWD’s staff of engineers recently recommended raising the RA by $27, from $445/AF to $472 A/F, or 90 cents a month on the average monthly water bill, according to OCWD’s chief engineer, John Kennedy.

But the mayors of three cities, Santa Ana, Fullerton, and Anaheim, wrote a panicky joint-letter also signed by their appointed representatives to the OCWD Board of Directors (city council members Vincent Sarmiento, Bruce Whitaker, and James Vanderbilt, respectively) pleading for no RA increase.

In asking for a price freeze, the three cities pointed out that the RA has increased 72 percent in the past five years, costs that the cities pass on to residents, 30 percent of whom “live in disadvantaged communities and struggle with basic housing needs,” and local businesses.

Then, at a recent OCWD board meeting, Whitaker complained that the public has suffered from “mandatory” water reductions due to drought while “paying more all the time.”

OCWD staff responded with a temporary 1-year compromise that it put on tonight’s meeting agenda for a board vote. It would increase the RA only by $17 while increasing the BPP from 75% to 77% to make up for some lost revenue.

But the proposed compromise would cut millions of dollars designated for needed maintenance projects, including removing sediment that is clogging the Prado Dam.

The compromise would also require the board to charge producers (and ratepayers) more in later years as maintenance costs inevitably escalate.

And raising the BPP will set back efforts to erase a severe basin overdraft created during the recent five-year drought as the OCWD Board of Directors failed to follow its basin management policy—in order to appease producers who didn’t want to raise the RA or lower the BPP.

Staff’s original recommendation to raise the RA by $27 would replenish the basin by 38,000 A/F, but the compromise proposal would raise it by only 6,000 A/F up to 30,000 A/F, depending on the amount of rainfall to come over the next fiscal year, according to staff reports.

Related Surf City Voice stories: The Ideological War Behind Poseidon’s Proposed Desalination Plant; OCWD Rate Increase: ‘Sucking it Up’ Will Lower Costs for Ratepayers and Help Fill the Basin