Calif. water company's reward to users for conserving: 24% rate hike

[Newsjock]

Source: San Francisco Chronicle

East Bay residents will see an average 24 percent hike in their water bills, starting next month, after the East Bay Municipal Utility District on Tuesday approved a bump in rates, largely to make up for revenue lost during the drought.

The agency, which expects to generate $1.8 billion for operations over the next two years, has brought in less money recently as customers cut back their water use amid the statewide call for conservation.

At its meeting Tuesday, the agency’s governing board unanimously approved a temporary 25 percent drought surcharge on the metered portion of the bill, to cover expected losses, as well as a long-planned permanent rate hike of 8 percent, on average, across the whole bill, to replace aging infrastructure and pay down debt on water projects.

The typical household, using 246 gallons of water per day, will see its monthly bill rise about $12, from roughly $48 to $60, according to the agency.

Read more: http://www.sfgate.com/bayarea/article/33-percent-water-rate-hike-approved-for-East-Bay-6317270.php

[Travis_0004]

1. Water and especially sewer is almost all fixed cost to maintain the infrastructure.

The marginal cost of delivering a few extra gallons is very low, so I can see how they would need to raise rates.

I guess the good news is if you conserve your bill did not go up.

[yeoman6987]

2. I would love to pay 60 dollars for my monthly bill

That's not the point though. I guess the company could keep losing money and close up shop. Or they could raise the price at a smaller percentage quarterly until they are making money again. That would be the nice way to do it.

[Travis_0004]

4. I guess its relative to where you live

I got a 60 dollar bill one time (and we are billed quarterly).

I was shocked and went around the house checking for leaks. It turns out they read the meter wrong. I spend less than 200 a year on water (I'm on septic which is part of the reason its so cheap). They tried to make septic users help pay for sewer infrastructure, thankfully it didn't pass.

[yeoman6987]

5. I was in a ceptic tank method but now use water company

Maryland is more expensive with everything. I don't mind as I chose to live in Arnold Maryland. Thank goodness that ordinance didn't pass. That sounds rather unfair to you guys for sure.

[tularetom]

3. Stuff like this is what helps advocates for privatization get their foot in the door

1. Public water agency attempts to deal with expected water shortage by urging its customers to conserve water.

2. Civic minded customers fall into line behind agencies calls for conservation and demand takes a dive.

3. Agency suddenly and belatedly discovers to its amazement that a decrease in water consumption leads to a shortfall in revenue and an inability to meet operating expenses, utters a Condoleeza Rice-like explanation, "Nobody could have predicted this".

4. Customers are pissed and water agency loses all credibility.

5. Private water company rushes into the confidence gap with vague promises to lower rates and pissed off customers respond with calls to privatize the water system.

I'm on a private well, so I pay directly for the power to pump the water I use. But if I were a customer of a municipal water agency I would use every last goddamned gallon I was legally entitled to, knowing that I'd get screwed either way anyhow.

[LuvLoogie]

6. It seems they know what they are doing.

https://www.moodys.com/research/Moodys-assigns-Aa1-to-East-Bay-Municipal-Utility-Districts-CA--PR_325447?WT.mc_id=AM~RmluYW56ZW4ubmV0X1JTQl9SYXRpbmdzX05ld3NfTm9fVHJhbnNsYXRpb25z~20150514_PR_325447

"The Aa1 rating reflects the following credit factors: largely built-out nature of the district's large and economically diverse service area; customers' wealth and income levels which remain significantly above national medians for counties; the district's ample supply of high quality water with good reliability and a large degree of independence from Bay Delta quality and supply issues and a sound plan to address the ongoing drought. The high rating additionally reflects a history of sound financial operations with timely rate increases which result in ample liquidity for the rating level, which offsets the historical debt service coverage levels that while stable, remain significantly below the median for similarly rated systems."