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Water rate increase proposed

Posted: September 3, 2009 9:32 p.m.
Updated: September 4, 2009 4:55 a.m.
 
The public can weigh in on Santa Clarita Water Division's plan to convert to tiered water rates at the retailer's Wednesday board meeting.

Citing the increased cost of buying and treating water, the water division wants to charge its 29,000 customers more money - depending on how much water each consumes, said Mauricio Guardado, general manager for Santa Clarita Water Division.

If approved, the average household bill would jump from $40 per month to $42 beginning 2010.

The water division charges customers based on how many units of water they use. Each unit is equivalent to 748 gallons of water.

Under the proposed rate change, it will charge customers $1.30 per unit to use up to 10,742 gallons of water a month.

Customers who exceed 10,742 gallons would pay $1.45 per unit, and those who consume more than 36,652 gallons of water would pay $1.91 per unit.

Santa Clarita Water Division's current rate is $1.26 per unit for all users.

Guardado hopes the tiered system will spur conservation.

"This system benefits the user that saves water," he said.

The tiered rate system also provides a windfall for Santa Clarita Water Division that will pay for future conservation efforts.

"There are some users who won't save water no matter what. They will just pay the bill," he said. "We can use the revenues from their water use to pay for future conservation programs."

Santa Clarita Water's rate increase is being driven by multiple forces, one being its operation cost, Guardado said.

"We need to increase rates to cover the cost of water treatment and capital costs," he said.

The water division also must bump up rates to cover the increased cost of buying water from Castaic Lake Water Agency, the Santa Clarita Valley's local water wholesaler, which just hiked its own water rates, he said.

"We need to increase our rates as a pass-through of the increased wholesale rates by Castaic Lake Water Agency," which owns Santa Clarita Water Division, Guardado said.

The water retailer isn't alone in its proposed retail rate increase - Newhall County Water District is also looking into raising its retail rates.

With Castaic Lake Water adopting its new wholesale rates, the customers may have to swallow an average increase of $54 per year, said Steve Cole, general manager of Newhall County Water District.

The Castaic Lake Water resells water to the Santa Clarita Valley's four water retailers and is the source for about 50 percent of the area's drinking water. The water agency raised its wholesale rates from $295 per acre-foot to $400 per acre-foot, said Dan Masnada, Castaic Lake Water Agency general manager.

"The driving force behind the rate increase was full recovery of our operating costs," he said.

Sale of water to the four retailers in the SCV pays for the cost of operating Castaic Lake Water's plant, to pay employees and to maintain the water system.

The cost to purchase water from the State Water Project comes from property tax revenues, Masnada said.

The Sacramento-San Joaquin Delta supplies the State Water Project, and that supply has gotten more expensive to tap, Masnada said.

To account for the increased cost of purchasing state water, Castaic Lake Water approved a tax increase for property owners during its Aug. 26 meeting.

Homeowners will pay 6 cents for every $100 of assessed home valuation. The rate was previously 4 cents per $100 of assessed home value, Masnada said.

The public hearing for Santa Clarita Water Division's proposed retail rate increase is set for 6:15 p.m. Wednesday at the Rio Vista Water Treatment plant, located at 27234 Bouquet Canyon Road.

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