The Metropolitan Water District (MWD), wholesale supplier to local districts serving 13 million Southern California customers, is expected to approve its first water rate reduction in 25 years beginning July 1 under a proposed cut of $9 per acre-foot.
The recommendation from MWD staff officials will be voted on Tuesday in Los Angeles by the district's directors.
The proposal follows an increase of $53 per acre-foot that was put into effect last year for 27 member agencies from Ventura to San Diego counties. It would be only the fourth rate reduction since the district began wholesaling water in Southern California in 1941.
The City of Los Angeles is a member despite taking most of its water from the Owens Valley.
The recommended cut, announced this week, results from an unexpected $26 million in energy credits that the wholesaler will receive from the state of California. District officials had proposed maintaining current rates for another year. Prices now range from $197 to $229 an acre-foot for water used for domestic and industrial use, and from $153 to $185 an acre-foot for water purchased for future emergency use. (An acre-foot of water equals 325,900 gallons, or enough to supply an average family of five persons for a year.)
The rate reduction will be achieved by using $13 million from the energy credits, MWD spokesman Bob Gomperz said Thursday.
"It comes as a little bit of a surprise," said Larry Michaels, general manager of the San Diego County Water Authority, which usually purchases nearly a third of the water district's annual supplies. "But it will help some, especially for local agencies which increasingly are going to have to depend more on MWD for their water."
One of the reasons for the $53 boost last year was the use by member agencies of large amounts of rainwater they stored from winter storms. The agencies purchased less water from the MWD, and the district was forced to raise its rates to cover its fixed costs.
More Water to Be Bought
However, Michaels said that local reservoir storage has declined to the point that most members will be purchasing significantly more water from the district in the next year or so.
The energy credits are a consequence of the district using less power than expected from hydroelectric plants located along the State Water Aqueduct from the Sacramento Delta to Southern California. The power is used to pump the water over the Tehachapi Mountains.