MWD May Increase Water Rates 24% : Supplies: The price hike, to reduce a deficit caused by the drought, is expected to be passed along to consumers.

Facing a projected drought-related budget deficit, officials of the Metropolitan Water District said Monday that they will seek a 24% increase in the price of water sold to agencies throughout Southern California.

Water agencies from San Diego to Ventura County will likely have to pass the increase to consumers, said MWD officials.

The MWD, which supplies about 60% of all water consumed in the six-county region, is anticipating a $200-million budget shortage because of reduced water sales in this fifth year of drought, officials said.

Today, the MWD board will consider imposing a 24% across-the-board rate increase--its first since 1984--to avert the deficit. If adopted, the increase would take effect in July.

The MWD sells water through a network of 27 member agencies that supply water directly to consumers or to smaller retail agencies.

The Los Angeles Department of Water and Power, one of the largest purchasers of MWD water, would see its bill rise by about $21 million if the increase is adopted. Jim Wickser, DWP assistant general manager for water, said the increase will be automatically passed along to consumers.

Because DWP gets only a portion of its water from MWD, Los Angeles customers will only see about an 8% rise in their water bill, Wickser said.

Because of the extreme drought conditions, MWD will have about 35% less water to sell this year than in recent years, said Greg D. Leddy, MWD director of finance. Many of the agency’s expenses, such as interest payments on bonds and operation of canals and aqueducts, are fixed and so new sources of funds had to be found.

In addition to the proposed rate increase, which was approved by the key Water Problems Committee on Monday, the MWD will tap its sizable reserves to cover $120 million of the shortfall. The MWD has a $405-million “rate stabilization” fund that is used to ease the impact of rising costs.

With the MWD projecting reduced water sales for the next three years, the fund could be nearly exhausted unless still more rate increases are adopted.

MWD board member John Killefer, who represents the Coastal Municipal Water District in Orange County, said: “It would be irresponsible for us to do anything less” than adopt the proposed increase. As for its impact on consumers, Killefer said, “The average consumer pays more for his cable (TV) hookup than for water,” which he said is typically less than $1 per day.

Even as it struggles with reduced sales, the MWD is being forced to find ways to cuts its deliveries further.

With both of its water sources--the State Water Project and Colorado River--drying up, the MWD is trying to find more ways to persuade its members to use less water.

The Water Problems Committee also recommended that the MWD shut off funding for water projects with Southland agencies that do not adopt mandatory 20% water conservation programs.

Don Adams, MWD director of resources, said members must find ways to “share the burden as we go through this shortage.”

Passage of the resolution would impose greater restrictions on agencies and could end some of the bickering between water-rich and water-poor districts over how to distribute this year’s limited supplies of water.