Tiered Water Rates Ruled OK : Conservation: Appeals court supports policy of charging higher fees to heavy users during a drought. Decision is victory for Bay Area utility district.

A water district can charge higher rates for heavy residential water use to encourage conservation during a drought, a state appeals court ruled Monday.

The 1st District Court of Appeal said the East Bay Municipal Utility District’s former rates, which were nearly four times as high for high volumes of water as for low volumes, were not an illegal tax or an excessive fee.

Most large water districts in the state have used a similar rate structure during recent droughts, said Verna Bromley, a lawyer for the East Bay district. She said a state law passed last year authorizes differential water prices to promote conservation.

A lawyer for residents who challenged the rates could not be reached for comment.

The East Bay district, which serves more than 1.1 million residents of Alameda and Contra Costa counties, adopted the four-tier rate structure in May, 1991, and increased the differential the next month. After five straight dry years, the district said its goal was to cut water use 15% without raising overall rates.

Families in the lowest tier, using up to 250 gallons a day, were charged $1.05 for 748 gallons. Those in the highest tier, over 1,200 gallons a day, were charged $3.94 for the same amount. The district’s board said the top tier consisted of 3.5% of the families who used 17% of the water that went to residential customers.

The highest tiers were eliminated in April, 1993, after a wet winter, leaving only a modest difference in rates.

The suit was filed by a group of customers who said the rates discriminated against residents of hotter areas, east of the Berkeley-Oakland hills, and amounted to a tax increase without voter approval, in violation of Proposition 13. Bromley said the customers did not request a refund but sought to prohibit differential rates in the future.

Upholding a decision by Contra Costa County Superior Court Judge David Dolgin, the appeals court ruled 3-0 that the rates were a legal conservation measure.

The district had evidence that “the profligate usage of water” by individuals was a major reason that mandatory conservation was needed, said the opinion by Richard Hodge, an Alameda County Superior Court judge assigned to the appeals court for the case.

Because additional water supplies would cost more, Hodge said, a rate structure tied to water use was a fee related to the district’s cost of service, not a tax.