Residents across the region will likely face increased water rates in coming years as local utilities grapple with continued rate hikes and reduced allocations from their main supplier, officials said.
The Metropolitan Water District of Southern California this week raised the rates they charge member agencies, like Glendale and Burbank, by 15% in the next two years. The board of directors also voted to maintain smaller exports, which have been cut 10% in response to the state’s water shortage crisis.
“The supply restrictions require us to continue saving water now and into the future,” board Chairman Timothy Brick said in a statement. “Our water challenges are not going to be solved by one or two wet winters.”
Local utility officials from Glendale, Burbank and the Crescenta Valley said rate increases would likely be needed in the coming budget cycle to remain financially viable as they face rising costs. The higher charges will come at a time when most customers have already seen the trickle down effect of Metropolitan’s 20% rate hike last year.
“We buy half our water from them, so it just follows if the cost of water goes up then our rates have to go up,” said Bill Mace, Burbank Water and Power’s assistant general manager.
Still, Metropolitan’s rate increase could have been as high as 22%, had the agency also not agreed to cut $20 million in operational costs to make up the difference, officials said.
“If anything this rate increase is low,” said Peter Kavounas, Glendale Water & Power assistant general manager for water services, who previously served as Glendale’s representative on the Metropolitan board. “I think as difficult as it is for people to understand emotionally, water rate increases are necessary because it costs money to provide the potable water on a continuous, reliable basis.”
At the same time, utilities are facing reduced revenues as a result of successful water conservation measures, such as limiting outdoor irrigation to two or three days per week.
Less water used has meant less money made.
Widespread compliance with the measures kept the utilities from incurring heavy penalties from Metropolitan for overusing water, but they also hit bottom lines, officials said.
“It’s a double-edge sword. Our water consumption went down by 18% last year, which is terrific,” Kavounas said. “But as a result of it, we are probably going to have to raise rates.”
Meanwhile, utility officials said the continuing increases underscore the need for increasing local supplies in order to decrease dependence on more expensive imports.
“We continue to expect that Metropolitan’s rates will increase,” said Nina Jazmadarian, general manager of the Foothill Municipal Water District, a regional water wholesaler to Crescenta Valley, La Cañada and other agencies. “Developing more local supplies will end up being more cost effective.”
But the recycled water and groundwater projects proposed by the various utilities also carry million-dollar price tags — which once again could increase rates in the short term, officials said.
“In the long run, they keep long-term costs down,” Kavounas said. “The challenge that we face as a city is telling people that it’s OK to spend the money now in order to build these local projects, with the promise that 10 years from now, we will be coming out ahead.”