Monday, May 9, 2011

Water Is Plentiful, but Rates for Bay Area Customers (and Conservation) Are on the Rise -
Conservation is up, and after an unusually wet winter, so is the water supply. The reservoirs along the Sacramento and San Joaquin Deltas that are the lifeblood of the state’s water system are filled to the brim.

Yet amid all this abundance, water agencies around the region are planning to raise rates in coming months.

San Francisco residents’ water will become 25 percent more expensive by late 2012, rising to four-tenths of a cent per gallon, with bills increasing to $36 a month for a typical 2.5-member household.

San Francisco’s water department plans to increase the price of water that it sells to 26 Bay Area utilities and cities by 47 percent on July 1. Rates charged by those entities to residents are expected to rise at least 16 percent.

The Marin Municipal Water District could increase rates by 4 percent on June 1. The East Bay Municipal Utility District may increase rates 6 percent this June and another 6 percent next June.

For most commodities, rising supply and falling demand would drive prices down. But that is the opposite of what is happening to Bay Area water prices.

The reasons for the rate increases are similar for all three agencies: Fixed overhead that includes rising chemical and fuel costs and, in the case of the East Bay and San Francisco utilities, high levels of capital spending. In addition, because of the success of conservation, the water agencies’ income stream is slowing. Fewer gallons consumed means less cash in the till.

“The costs to run the San Francisco system are relatively fixed, regardless of how much water is used,” said
Art Jensen, general manager of the Bay Area Water Supply and Conservation Agency.
San Francisco gets most of its water from Hetch Hetchy Reservoir in Yosemite National Park. The water network of pipes, reservoirs and treatment plants is six years into a $4.6 billion project to improve capacity and earthquake resilience and catch up on maintenance.

The New York Times
April 30, 2011

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