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Water district switching to flat rate

Posted: June 14, 2014 8:36 p.m.
Updated: June 14, 2014 8:35 p.m.

Newhall County Water District officials have pulled the plug on a tiered water rate structure initially designed to encourage ratepayers to conserve water.

On May 15, directors for the district – one of four water retailers in the Santa Clarita Valley - voted to drop their tiered water rate structure that’s been in place since 2005. But not all directors are happy about the move.

“The (Newhall County Water District) just took a step backward,” said Director Lynne Plambeck, who voted against the move. “It will now be the only local purveyor without conservation pricing.”

Not so, according to other directors and the district’s general manager who see the new rate structure as a fairer way to pay for water. Other directors also had concerns about legal challenges over the tiered rate system.

Since 2005, customers in the district that takes in Newhall and parts of Canyon Country, Saugus and Castaic have been paying a flat monthly service charge plus a graduated rate on water used. The more water they consumed, the higher the rate per unit for that water.

Under the new system, customers will pay a lower flat monthly rate and the same rate for water used, but that rate will be higher than it was before. District officials call that the “commodity charge.”

“We wanted to reward all users,” district General Manager Steve Cole said last week. “We chose to reduce the service charge for all customers, which is the fixed cost you pay for water.”

The district has reduced its service charge by 20 percent - from $19.18 to $15.27 per month.

“This is fairer for everyone, since we’re putting more of the cost into the commodity charge - which puts it in the customer’s control,” Cole said.

The new rate is for customers with three-quarter-inch metered accounts, which is most residential customers and makes up about 80 percent of the district’s clientele.

For customer balancing their household budgets at the kitchen table, the new rate looks like this:

A service charge per month of $15.27 plus a commodity charge of $2.30 per unit used. One unit equals 748 gallons of water.

The previous service charge was $19.18 and the per-unit charge ranged from $1.067 to $1.981, depending on which tier the customer fell into, which was determined by how much water he or she used.

Plambeck remains convinced, however, that removing the district’s tiered rate system removes the incentive to conserve water.

No incentive

Ten years ago, the district considered a tiered system the best way to proceed in motivating customers to conserve water.

“Water is a precious resource,” said Plambeck, a longtime elected water board member as well as a long-standing member of the local environmental group Santa Clarita Organization for Planning and the Environment.

“Some people will understand its value and use it wisely no matter how it is priced, but many people don’t realize the value of a resource without a pricing structure that reflects its value.”

“California is now experiencing its worst drought in 500 years,” Plambeck said in an interview last week. “Throughout the state, water agencies are looking at ways to encourage conservation.

“Now, no matter how much a customer uses, the rate will be the same - the reward for conservation has been eliminated,” she said.

“This is certainly not the time for any board to dismantle a rate structure that encourages conservation. It sends the wrong message to our water users.”

Legal concerns

One concern about retaining the tiered rate system was a legal one, Cole said.

In jurisdictions outside the Santa Clarita Valley, similar tiered water rate systems sparked more than conservation - they prompted lawsuits.

News of recent civil suits filed against water agencies in Palmdale and San Juan Capistrano that used tiered rates prompted district heads to rethink their own payment structure.

“The tiered system ended with cross-subsidies which were the main issue in two recent court cases,” Cole said. “The courts found their rates were not fair.”

“The tiers were kind of an artificial pricing which exposed us to legal challenges,” Maria Gutzeit, president of the district’s Board of Directors, said Thursday.

“My main consideration was, number one, that the tiered system was fairly arbitrary, and because of that I became concerned about the legal risks.”



missyJk: Posted: June 15, 2014 9:10 a.m.

that sound sounds like a big rate increase..weren't they the ones suing for the merger between Castaic water buying one of the "former" water utilities? the water bills are getting ridiculously high even for those of us who have always conserved water

CaroleLutness1: Posted: June 15, 2014 7:38 p.m.

Regarding the lawsuits, while that pricing structure was over-turned at the trail court, it is my understanding that it was re-instated on appeal. Jim Holt, can you verify this? We really do need to have people mindful of the water they are using and think "conservation" all the time.

bartman: Posted: June 16, 2014 8:01 a.m.

The issue I have with the rate structure I have a large tract home property. The allowances or tiers do not take that into account and are billed the same as a condo owner with similar bedroom bathroom counts.

17trillion: Posted: June 16, 2014 9:24 a.m.

If Lynne Plambeck is against it, it must be a good thing that it passed. I continue to scoff at the notion that residential water users must conserve to fix this phony problem all because of a 3 inch bait fish. Now pardon me while I go needlessly water my lawn after I take a 30 minute shower.

Go lawsuits!

chefgirl358: Posted: June 16, 2014 2:44 p.m.

The bottom line is, the pricing structure doesn't matter because water in SCV overall is dirt cheap. My family uses a ton of water every month, and they always send us the statement saying that we are excess users, and you know what our bill's something like $40 or $60 bucks I think. Maybe even a little more I don't know, but the point's DIRT CHEAP! I mean seriously, if they really want to make people conserve, triple the price. Water rates in Ventura are outrageous. My girlfriend moved there from SCV and said her monthly water bill is like $200! (the worst part is the water quality sucks just as bad as SCV). As long as water is as cheap as it is in SCV, people aren't going to care that much. The city certainly doesn't care because they keep installing plant/tree filled medians all throughout the city that require...WATER! They also continue to approve large scale building projects, many of them including large water features.

chefgirl358: Posted: June 17, 2014 9:06 p.m.

Update: received bill today, it was $70. Whoop de doo. Way too cheap to force people to conserve. Besides agriculture uses EIGHTY percent of the state's water, what we are using is hardly anything by comparison. And that tiered rate structure...didn't account for the number of people in your residence so the water company was totally screwing any large family with (understandably) high water usage.

ricketzz: Posted: June 17, 2014 6:04 a.m.

A 3" fish did not cause the drought. You caused the drought by refusing to admit that you are a pig and a coward.

17trillion: Posted: June 17, 2014 8:11 a.m.

I'm sorry, I couldn't hear you because my sprinklers are on....again!

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