Bay Area utility companies have done such a good job conserving water that they are now getting a huge reward: a likely rate increase of at least 47 percent to help make up for the lost revenue in San Francisco’s water system.
Twenty-six Bay Area water districts that rely on San Francisco’s Hetch Hetchy Reservoir are expected to use an average of 143 million gallons of water a day this fiscal year, which is 21 million gallons less than just four years ago.
Since the consumption reduction threatens to reduce the income stream the San Francisco Public Utilities Commission relies on, the agency is proposing to change the price of one unit — 748 gallons of water — from $1.90 to $2.80. And it would increase to $2.90 if average consumption falls below 130 million gallons a day.
Happily for Peninsula and South Bay customers, the 47 percent price increase will be diluted by the time it gets to their bills.
SFPUC Assistant General Manager Todd Rydstrom said the average consumer can expect to encounter a price increase of about 16.5 percent.
Meanwhile, San Francisco water users are already scheduled to assume a 12 percent rate increase starting in July.
Rydstrom explained that despite the laudable conservation efforts, his agency needs to ensure that its income remains steady when it sells bonds.
Water agency officials in San Mateo County said they were not predicting such a large rate hike and many were crunching numbers to figure out what it will mean for their ratepayers.
“I hadn’t intended to have to respond in sort of an emergency fashion either ... but my guess is that we’re looking at a maybe 10 percent rate increase,” said Millbrae Director of Public Works Ron Popp.
Popp said Millbrae already approved a 7 percent increase under the impression that the SFPUC rate hike would be less. He said he will have to consider another hike in fall because of the higher percentage change.
“We are having our finance department analyze the impacts,” Hillsborough City Engineer Cyrus Kianpour said.
Art Jenson, the executive director of the Bay Area Water Supply and Conservation Agency, which represents several of the affected districts, said the news was not met with enthusiasm.
“I’ve never had anybody come to me and say, ‘Will you increase my rates?’” he said.
Jenson added that, nevertheless, the SFPUC needs the money to fix its infrastructure.
“A major earthquake could put people out for 60 days,” Jenson said.
The money also helps pay off debt accrued by a $4.6 billion Water System Improvement Program to Hetch Hetchy’s aging infrastructure and other projects.
The SFPUC had an informational hearing Tuesday and is scheduled to vote on the proposal at its regular meeting May 10.