Water wholesaler cites recession, conservation, pumping limits
By BRADLEY J. FIKES - bfikes@nctimes.com Posted: April 13, 2010 4:23 pm
Font Size:Default font sizeLarger font sizeShare Southern California's largest water wholesaler, Metropolitan Water District, voted Tuesday to hike water rates by 7.5 percent Jan. 1 and another 7.5 percent a year later.
Metropolitan's board also voted for a second consecutive year of mandatory water conservation, for what the agency said was the first time in its history.
The rationale for the rate hike was that Metropolitan's water sales have taken an unexpectedly severe tumble because conservation during the state's drought was compounded by the recession.
In addition, court-imposed restrictions on pumping water from the Sacramento-San Joaquin Bay delta have crimped supplies, Metropolitan said, despite a relatively wet winter. The restrictions also increase the cost of water, the agency said in a statement.
Cost increases from Metropolitan flow down to its member agencies, such as the San Diego County Water Authority. The authority in turn passes along its higher costs to local agencies that sell water at retail to business and residential customers.
Metropolitan board members from San Diego County opposed all of the rate hikes, said board member Keith Lewinger, who is also general manager of Fallbrook Public Utility District. The district buys water from the San Diego County Water Authority.
"San Diego takes issue with how Metropolitan allocates its costs," Lewinger said in a phone interview. "The cost allocation disproportionately charges San Diego under any of the rate scenarios presented."
The rate hike was one of four options presented by Metropolitan's staff that called for raising rates as much as 12.4 percent on Jan. 1.
The chosen option leaves Metropolitan with a $20 million shortfall. Under one proposal, the difference was to be made up from reserves. But Metropolitan's board instead ordered the budget balanced by a $20 million reduction in spending.
Metropolitan's budget for the year ending June 30 is $2.03 billion.
Call staff writer Bradley J. Fikes at 760-739-6641. Read his blogs at bizblogs.nctimes.com.
Posted in Business on Tuesday, April 13, 2010 4:23 pm
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