May 13, 2025
San Francisco
Public Utilities Commission
Fiscal Year 2025
-
2026 Wholesale
Water Rates
2 Agenda
Wholesale Rate Setting Process
Drivers of Wholesale Rate
Increase
Fiscal Year 2025-2026
Wholesale Water Rate
Historic and Projected
Wholesale Rates
Wholesale Water Rate-Setting Process
Wholesale water rates set annually following
process dictated by the Water Sales Agreement
Rates are calculated based on the wholesale
customers proportionate share of budgeted
Regional Water and Hetch Hetchy water expenses
After fiscal year is complete, the actual expenses
due to wholesale customers are reviewed
Under/over-collection goes to “balancing account”
which is used to ensure all parties pay their share
3 4
Drivers of Wholesale Rate Increase
1. Wholesale Revenue Requirement set based on
adopted budget
• Increasing operating budget, greater use of revenue funded capital, and growth in debt service expenses
2. Water sales volumes
• Wholesale has had a strong drought recovery
• Retail remains low post drought and COVID
3. Balancing account
• Being used to stabilize rates
𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑅𝑅𝑊𝑊𝑅𝑅𝑊𝑊 =
𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑅𝑅𝑊𝑊𝑅𝑅𝑊𝑊𝑅𝑅𝑅𝑅𝑊𝑊 𝑅𝑅𝑊𝑊𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑊𝑊𝑅𝑅𝑊𝑊𝑅𝑅𝑅𝑅 − 𝐹𝐹𝑅𝑅𝐹𝐹𝑊𝑊𝐹𝐹 𝐹𝐹𝑊𝑊𝑊𝑊 ± 𝐵𝐵𝑊𝑊𝑊𝑊𝑊𝑊𝑅𝑅𝐵𝐵𝑅𝑅𝑅𝑅𝐵𝐵 𝐴𝐴𝐵𝐵𝐵𝐵𝑊𝑊𝑅𝑅𝑅𝑅𝑅𝑅 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑉𝑉𝑊𝑊𝑊𝑊𝑅𝑅𝑅𝑅𝑊𝑊𝑊𝑊
Wholesale Share of Expenses
5 • Inflationary increase in operating costs
• Biggest growth in capital expenses
6 Water Sales: Actuals and 10-Year
Financial Plan Projections
7 Balancing Account Impact
• Balancing account owed to wholesale was very high in recent years, allowing for lower rates as SFPUC paid it back
• Money owed to SFPUC beginning FYE 2024, projected to be negative at the end of this fiscal year
• Balancing account owed to wholesale customers to be paid down over four years to stabilize future wholesale rates
FY Beginning Balancing Account Due (To)/From Wholesale Customers 8 FY 2024-25 Rate Increase: 2.3%
Key Drivers of Rate Increase
• Expense growth: revenue funded capital, operating expenses, debt service spending
• Higher allocation of costs to wholesale due to higher wholesale vs. retail proportionate share of water volumes
• Offset by higher wholesale volumes = lower rate
Wholesale Revenue Requirement − Fixed Fee ± Balancing Account Wholesale Volumes
FYE 2026 Rate =
$375.9𝑀𝑀−$5.1M−$1.6𝑀𝑀
131.3 𝑀𝑀𝑀𝑀𝑀𝑀 = $5.80/𝐵𝐵𝐵𝐵𝑐𝑐
FYE 2026 Rate Increase = 2.3%
9 Historic and Projected Wholesale
Rates
Adopted / Forecasted
Rates $4.10 $4.10 $4.10 $4.10 $4.75 $5.21 $5.67 $5.80 $5.86 $5.93 $6.23 $6.73 Rate Change 0.0% 0.0% 0.0% 0.0% 15.9% 9.7% 8.8% 2.3% 1.0% 1.2% 5.1% 8.0% Rate w/o Balancing
Account $ 4.32 $3.85 $4.14 $4.56 $5.48 $5.26 $5.31 $5.83 $5.85 $6.04 $6.27 $6.73
10 DEPARTMENT
Financial Services Division
AGENDA NO. 8
MEETING DATE
May 13, 2025
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Project Manager: Matthew Freiberg
Wholesale Water Rates and Charges for Fiscal Year 2025-2026
Summary of Proposed
Commission Action:
Consider and adopt the proposed Wholesale Water Rates and Charges for Fiscal Year 2025-2026, which will become effective for meter readings on or after July 1, 2025. The San Francisco Public Utilities Commission developed the proposed rates and charges in accordance with the terms of the Water Supply Agreement between the City and County of San Francisco and its Wholesale Customers, which the Commission approved on April 28, 2009, by Resolution No. 09-0069, and amended and restated on January 26, 2021, by Resolution No. 21-0009, with subsequent approval by the Wholesale Customers. This action constitutes the Approval Action for the Project for the purposes of the California Environmental Quality Act (CEQA), pursuant to San Francisco Administrative Code section
31.04(h). The Planning Department has determined that this action is exempt from the CEQA. T
he Commission will rely on that
determination to make its decision on this action.
Background and
Description of
Proposed Action:
Background
The San Francisco Public Utilities Commission (SFPUC) sells water to retail customers , who are located primarily
inside the City and
County of San Francisco ( San Francisco ), and 27 wholesale customers in Alameda County, San Mateo County, and Santa Clara County. The wholesale customers
establish local utility rates for
those retail water customers that they serve in their respective jurisdictions.
The SFPUC establishes water rates and charges applicable to the wholesale customers (Wholesale Water Rates) in accordance with the terms of the Water Supply Agreement (WSA) between San Francisco and 26 of the 27 wholesale customers ( Wholesale Customers). This Commission approved the WSA on April 28, 2009, by Resolution No. 09-0069, and amended and restated on January 26, 2021, by Resolution No. 21-0009, with subsequent approval by the Wholesale Customers.
Under the WSA, the Commission must consider annual adjustments to the W holesale Water R ates, which are based on projected wholesale-related costs and water deliveries to the Wholesale Customers, in coordination with the SFPUC’s financial planning and budget processes. The WSA also sets forth specific procedures that Title: Wholesale Water Rates and Charges for Fiscal Year 2025-2026 Meeting Date: May 13, 2025
Page: 2
the SFPUC must follow if it intends to increase Wholesale Water Rates during the ensuing fiscal year.
In general, the WSA requires the Wholesale Customers to pay operating expenses and capital costs associated with the SFPUC’s “regional” assets, which serve both the Wholesale Customers and the SFPUC’s retail customers, based on proportional water use. The WSA allows the SFPUC to recover a portion of net annual debt service for new regional assets and to recover the Wholesale Customers’ share of revenue-funded regional capital costs. The WSA also authorizes the SFPUC to collect the Wholesale Customers’ contribution to meet debt service coverage reserve requirements.
In addition, the WSA directs the SFPUC to consider, when establishing Wholesale Water Rates, whether the Balancing Account maintained under the WSA has a balance reflecting an amount that the SFPUC owes to the Wholesale Customers or a balance reflecting an amount that the Wholesale Customers owe to the SFPUC, based on actual costs incurred by the SFPUC and actual amounts of water used by wholesale and retail customers in previous fiscal years. The SFPUC may apply an amount from the Balancing Account to reduce or increase Wholesale Water Rates for the immediately ensuing year.
As discussed in further detail below and shown on the attached revised Schedule W -25: Wholesale Use With Long- Term Contract , SFPUC Finance staff’s proposed Wholesale Water Rates for Fiscal Year (FY) 2025-2026 include:
1. A new volumetric water rate of $5.80 per CCF (1 CCF = 748 gallons), based on: ( a) the Wholesale Customers’ portion of the SFPUC Regional Water System’s capital and operating costs under the WSA, known as the Wholesale Revenue
Requirement; (b) the application of a n amount from the Balancing Account that the SFPUC owes to the Wholesale
Customers; and (3) water sales assumptions.
This new rate
reflects a $0.13 per CCF , or 2.3%, increase from the current rate of $5.67 per CCF.
2. A 2.3% increase to the Monthly Service Charge
component of the Wholesale Water Rates, to correspond with the proposed 2.3% increase for the volumetric water rate. The Monthly Service Charge is a fixed fee that is determined for each Wholesale C
ustomer based on the type and size of
applicable meters.
3. No change to the Untreated Wholesale Water Rate
Discount Factor of $0.39 per CCF applicable to Coastside County Water District, the only Wholesale Customer that receives non -potable water from the SFPUC , rather than treated potable drinking water, and treats that water at its own facilities.
In accordance with WSA section 6.03.A, on March 21, 2025, more than 30 days before this Commission meeting, the SFPUC sent a written notice of the proposed adjustments to the Wholesale Water Title: Wholesale Water Rates and Charges for Fiscal Year 2025-2026 Meeting Date: May 13, 2025
Page: 3
Rates for FY 2025-2026 to the Wholesale Customers and the Bay Area Water Supply and Conservation Agency (BAWSCA), which represents the Wholesale Customers. The SFPUC’s notice to the Wholesale Customers and BAWSCA (attached to this staff report) included tables and schedules illustrating the calculation of the proposed Wholesale Water Rates , which would be effect ive on July 1, 2025, more than 30 days after adoption by the Commission.
Proposed Volumetric Water Rate and Monthly Service Charge Adjustments
SFPUC Finance staff prepared an analysis of the Water Enterprise’s projected revenues and revenue requirements for FY 2025- 2026.
Without the proposed adjustments to the Wholesale Water Rates , the SFPUC would collect a total of $368.4 million in revenue from projected Wholesale Customer water sales in FY 2025- 2026 with (1) the current volumetric water rate applicable to the Wholesale Customers ($5.67 per CCF), (2) the existing Monthly Service Charges, which would total $ 5.0 million, and (3) revenue losses of $2.4 million from the existing Untreated Wholesale Water Rate Discount applicable to Coastside County Water District.
The projected Wholesale Revenue Requirement for FY 2025-2026 is a higher amount: $375.9 million (see Table 1 below). The Wholesale Revenue Requirement for FY 2025- 2026 includes the Wholesale Customers’ proportionate share of anticipated operating expenses, debt service on bonds sold to construct or acquire new regional assets, and new cash -funded regional assets over the course of the fiscal year. As stated in the SFPUC’s M arch 21, 2025 notice to the Wholesale Customers and BAWSCA , the projected amount is approximately $43.7 million greater than the Wholesale Revenue Requirement for FY 2024-2025, primarily due to rising capital costs.
SFPUC Finance s taff project that there will be a Balancing Account balance of approximately $10.4 million owed by the SFPUC to the Wholesale Customers by the end of FY 2024- 2025. Staff propose to apply $1.6 million of that balance to the Wholesale Revenue Requirement for FY 2025- 2026, which adjusts the amount that the SFPUC will collect from the Wholesale Customers via the Wholesale Water R ates to $374.2 million , as shown in Table 1. Staff plan to incorporate the remaining amount in the B alancing Account into Wholesale Water R ates gradually over the next four fiscal years to enable “smoothed” rate adjustments for the Wholesale Customers.
Table 1: Projected FY 2025-2026 Wholesale Revenue
Requirement ($ millions)
FY 2025-2026
Operating Costs $153.9
Debt Service $186.7
Capital: Revenue Funded $32.7
Debt Service Coverage $4.1
Title: Wholesale Water Rates and Charges for Fiscal Year 2025-2026 Meeting Date: May 13, 2025
Page: 4
Less Interest on Balancing Account and
Coverage Reserve
$(1.6)
Wholesale Revenue Requirement $375.9
Balancing Account Amount Applied to
Wholesale Water Rates for FY 2025-2026
$(1.6)
Wholesale Revenue Requirement Applied
to Rates
$374.2
To meet the Wholesale Revenue Requirement Applied to Rates for FY 2025- 2026, SFPUC Finance staff recommend increasing the Wholesale Water Rates on or after July 1, 2025, by 2.3%. As stated in the SFPUC’s March 21, 2025 notice to the Wholesale Customers and BAWSCA , the volumetric water rate will increase from $5.67 per CCF to $5.80 per CCF , and the Monthly Service Charge will correspondingly increase by the same 2.3% to the new schedule of charges based on meter type and size shown on revised Schedule W- 25: Wholesale Use With Long- Term Contract , attached to this staff report.
Table 2 below illustrates how the SFPUC has calculated the proposed new volumetric water rate:
1. Staff has identified the portion of the adjusted Wholesale Revenue Requirement that will be met by the volumetric rate (i.e., the Wholesale Variable Rate Revenue Requirement) .
This is comprised of the Wholesale Revenue Requirement
Applied to Rates from Table 1, less the revenue that the SFPUC will collect from the Monthly Service C harge, plus the revenue that is lost from selling some water at rates below the proposed new volumetric rate due to t he lower costs of raw water and other contractual terms.
2. The Wholesale V ariable Rate Revenue Requirement is then divided by the total projected water sales from the Wholesale Customers over the course of the fiscal year.
Table 2: Proposed FY 2025- 26 Wholesale Volumetric Water Rate ($ millions)
FY 2025-2026
Wholesale Revenue Requirement Applied to
Rates
$374.2
Monthly Service Charge Revenue $(5.1)
Revenue Loss to Contractual Discounts and
Untreated Water
$2.5
Wholesale Variable Rate Revenue
Requirement
$371.6
Full Price Wholesale Water Sales 63,462,442 CCF
Title: Wholesale Water Rates and Charges for Fiscal Year 2025-2026 Meeting Date: May 13, 2025
Page: 5
Discounted Water Sales 417,785 CCF
Untreated Water Sales 220,904 CCF
Total Water Sales for Volumetric Rate 64,075,337 CCF
Wholesale Volumetric Rate $5.80/CCF
Untreated Wholesale Water Rate Discount Factor
The SFPUC’s March 21, 2025, notice also informed the Wholesale Customers and BAWSCA that the Untreated Wholesale Water Rate Discount Factor applicable to Coastside County Water District (CCWD) for FY 2025- 2026 would remain unchanged . Unlike the SFPUC’s other Wholesale Customers, who receive treated potable drinking water from the SFPUC, CCWD receives non- potable water from the SFPUC, which it treats to drinking water standards at its own facilities.
As required by S ection 8 of the Individual W ater Sales Contract between the SFPUC and C CWD under the terms of the WSA , SFPUC Finance staff commissioned an independent analysis in 2010 to evaluate the cost of service for untreated water. The lower contract price of untreated water compared to treated water, which the SFPUC and the Wholesale Customers refer to as a “discount factor,” is based on the unit cost of capital and operating expenses for the SFPUC’s Harry Tracy Water Treatment Plant ,
which is not used to treat the
“raw” water delivered to CCWD.
SFPUC Finance staff recommend preserving the discount factor applicable to CCWD in FY 2025- 2026 at $0.39 per CCF, as shown on Schedule W -25. The SFPUC calculated this discount factor by dividing the total projected costs and expenses for the Harry Tracy Water Treatment Plant in FY 2025-2026 by the total projected water deliveries to the Wholesale Customers in FY 2025-2026.
Environmental
Review:
On April 4, 2025, the San Francisco Planning Department determined the Project to be statutorily exempt from environmental review under the CEQA section 21080(b)(8) and the CEQA Guidelines s ection 15273 ( Rates, Tolls, Fares and Charges) ( Case Number 2025- 002835ENV) related to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges . The exemption determination can be found here:
https://sfpuc.sharefile.com/public/share/web-
s837aae556dfd4d68958e742bd8c8a3ab
This action constitutes the Approval Action for the project for the purposes of the CEQA pursuant to
San Francisco Administrative
Code section 31.04(h).
Attachments: 1. New Schedule W-25: Wholesale Use with Long-Term Contract
2. FY 2025-2026 Wholesale Water Rates Notice
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
Resolution No. ______________
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) sells water to retail customers, who are located primarily inside the City and County of San Francisco (San Francisco), and 27 wholesale customers in Alameda County, San Mateo County, and Santa Clara County, who in turn establish local utility rates for the retail water customers that they serve in their respective jurisdictions; and
WHEREAS, The SFPUC establishes water rates and charges applicable to the wholesale customers (Wholesale Water Rates) in accordance with the Water Supply Agreement (WSA) between San Francisco and 26 of the 27 wholesale customers (Wholesale Customers), which this Commission approved on April 28, 2009, by Resolution No. 09-0069, and amended and restated on January 26, 2021, by Resolution No. 21- 0009, with subsequent approval by the Wholesale Customers; and
WHEREAS, The SFPUC proposes to adjust the Wholesale Water Rates for Fiscal Year (FY) 2025-2026 to include a volumetric water rate of $ 5.80 per CCF, which is a $0.13 per CCF , or 2.3%, increase from the current volumetric water rate of $5.67 per CCF; and
WHEREAS, To correspond with the 2.3% increase for the volumetric water rate, t he SFPUC also proposes to increase the Monthly Service Charge component of the Wholesale Water Rates for FY 2025-2026 by 2.3%, as shown in the revised Schedule W-25: Wholesale Use With Long- Term Contract , attached to this resolution and incorporated in this resolution by reference; and
WHEREAS, The SFPUC proposes no change to the existing Untreated Wholesale Water Rate Discount Factor of $0.39 per CCF, which applies only to Coastside County Water District, the one Wholesale Customer that receives non -potable water from the SFPUC, rather than treated potable drinking water, and treats that water at its own facilities; and
WHEREAS, On March 21 , 2025, more than 30 days before the Commission held its April 22, 2025 public hearing to consider the proposed adjustments to the Wholesale Water Rates for FY 2025- 2026, the SFPUC sent a written notice of the proposed adjustments to the Wholesale Customers and BAWSCA, in accordance with WSA section 6.03; and
WHEREAS, A copy of the WSA, and a copy of the SFPUC’s March 21, 2025 notice to the Wholesale Customers and BAWSCA, which included among its attachments a revised Schedule W- 25: Wholesale Use With Long- Term Contract , showing the proposed Wholesale Water Rates effective July 1, 2025, are on file with the Director of Commission Affairs and incorporated in this resolution by reference; and
WHEREAS, On April 4, 2025, the San Francisco Planning Department determined the
Project to be statutor ily exempt from environmental review under the California Environmental Quality Act (CEQA) section 21080(b)(8) and the CEQA Guidelines s ection 15273 (Rates, Tolls, Fares and Charges) (Case Number 2025-002835ENV) related to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges; and
WHEREAS, The Commission is securing revenue to meet estimated FY 2025 -2026 “Regional” operating and capital costs consistent with Article 5 of the WSA; and
WHEREAS, This Commission hereby finds that adoption of this resolution will establish Wholesale Water R ates for the purpose of (1) meeting operating expenses, including employee wage rates and fringe benefits; (2) purchasing or leasing supplies, equipment, or materials; (3) meeting financial reserve needs and requirements ; and (4) obtaining funds for capital projects necessary to maintain service within existing service areas; now, therefore, be it
RESOLVED, This Commission determines that an increase in the volumetric water rate and an increase in the m onthly service charges applicable to the Wholesale Customers are required for Fiscal Year 2025- 2026 and hereby adopts the proposed rate and charges , as enumerated in the revised Schedule W-25: Wholesale Use With Long-Term Contract, attached to this Resolution and incorporated by reference as if set forth here in full, for all water delivered to the Wholesale Customers, on or after July 1, 2025.
I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting of May 13, 2025.
Director of Commission Affairs
San Francisco Public Utilities Commission
SCHEDULE W-25: Wholesale Use with Long-Term Contract
For service to municipalities, water districts and others who, under long-term contracts, purchase water for resale:
First: A Monthly Service Charge based on the type and size of the meter:
Meter
Size
Turbine Meters
(C-701, Class II)
Electronic Meters
(C-715, Class II)
Displacement Meters
(C-700, Class II)
2 in.
- - $146
3 in.
$400 $321 -
4 in.
$690
$551 -
6 in.
$1,471
$736 -
8 in.
$2,575
$1,839 -
10 in.
$3,862
$2,759 -
12 in.
-
$3,679 -
16 in.
$7,173
- -
Second: A charge for water delivered based on one-month’s meter readings:
$2,526.47 per acre-foot or $5.80 per 100 cu. ft.
Third: An Untreated Wholesale Water Rate Discount Factor for Wholesale Customers receiving untreated water, based on one-month’s meter readings:
($169.88) per acre-foot or ($0.39) per 100 cu. ft.
Services of the San Francisco Public Utilities Commission
OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
March 21, 2025
Mr. Thomas Smegal
Chief Executive Officer/General Manager
Bay Area Water Supply & Conservation Agency
155 Bovet Road, Suite 650
San Mateo, CA 94402
Dear Mr. Smegal,
The San Francisco Public Utilities Commission (SFPUC) has determined that the Fiscal Year 2025-26 Wholesale Water Rates will be $5.80 per CCF, representing a $0.13 per CCF or 2.3% increase from the current rate for treated wholesale water, effective July 1, 2025. As required by WSA Section
6.03.A, the SFPUC has scheduled a public hearing to consider the adoption of the wholesale water rate, as follows:
April 22, 2025, 1:30 PM
San Francisco City Hall
1 Dr. Carlton B. Goodlett Place, Room 400
San Francisco, CA 94102
The primary driver of the rate increase is a higher Wholesale Revenue Requirement. The Fiscal Year 2025-26 Wholesale Revenue Requirement, including below-the-line adjustments, is projected to be approximately $43.7 million greater than the prior year. The main contributor to this increase is capital costs rising by $41.2 million, which includes $11.5 million for debt service on existing bonds and $29.7 million for revenue-funded capital appropriations.
This increase is partially offset by the application of a portion of the balancing account owed to BAWSCA from SFPUC and projected increased water sales.
Higher water usage as the region returns to new normal after the impact of the recent drought softens the volumetric rates. Volumes for FY 2025-26 are projected to be 131.3 MGD, based on the latest current-year forecasts and an expected slow recovery from drought conditions over the next two years.
The SFPUC’s proposed volumetric rate is in the middle of the anticipated range of rates that were presented to BAWSCA in January.
Monthly Meter Charges
As discussed last year, the SFPUC will annually update monthly meter charges in Schedule W-25 by the same percentage increase as the volumetric rate. The updated charges with a 2.3% increase from FY 2024-25 are shown in the attached schedule.
Untreated Wholesale Water Rate Discount Factor
The Fiscal Year 2025-26 Untreated Wholesale Water Rate Discount will be $0.39 per CCF, with no changes from the current rate, effective July 1, 2025.
The discount factor is equal to the Harry Tracy Water Treatment Plant total projected cost. The discount is calculated by dividing the relevant cost by total wholesale water deliveries.
Fiscal Year 2025-26 Billing
As in prior years, the following charges, unrelated to the Wholesale Revenue Requirement, will be effective July 1, 2025:
• BAWSCA Bond Surcharge: The monthly bills include the February 2013 prepayment of the Pre-2009 Assets surcharge for the repayment of BAWSCA issued bonds. The amounts of the surcharge are proportionate to water consumption and have been adjusted accordingly. The SFPUC bills and collects the surcharge on behalf of BAWSCA and remits these amounts to the trustee.
• Water Management Charge: Per the BAWSCA Board, the cost of development of the Long Term Reliable Water Supply Strategy 2050 project (“Strategy 2050”) is to be funded through the Water Management Charge and be allocated among the Wholesale
Customers in proportion to their water purchases from SFPUC during FY 2000-01. The monthly bills for each Wholesale Customer include a separate line item for the Water Management Charge, to be paid during the 18-month period of September 2024 through February 2026. • Late Fees: Late payment penalties as specified in Schedule W-44 will be in effect. The SFPUC encourages Wholesale customers to sign up for electronic billing and payment services to make timely payments and to avoid late fees. Please sign up with our SFPUC BillPay service at myaccount-water.sfpuc.org to receive and pay your bills online. If you have any questions, please contact customer assistance at (415) 551- 3000.
Enclosures
Per WSA Section 6.03.A, supporting documents are required if there is a rate increase. This year, we are also providing various materials associated with the changes to the monthly service charges following WSA Section 6.04.B. We are attaching the following:
• Attachment N-1: Balancing Account/Rate Setting Calculation: A table showing the change in the Wholesale Revenue Requirement and how the wholesale rate was calculated
• Attachment N-3: Schedule of Projected Water Sales, Wholesale R
evenue Requirements and Wholesale Rates: A schedule showing pr
ojected Wholesale Customer water sales and rates for the proposed r
ate year and the following four fiscal years
• FY 2025-26 Calculation of Untreated Water Discount Factor • Schedule W-25: Wholesale Use with Long-Term Contract - Proposed Fi
scal Year 2025-26 Wholesale Customer water rates
• Fiscal Year 2025-26 BAWSCA Bond Surcharge letter and schedule s
howing the bond surcharge for each member agency
• BAWSCA Water Management Charge letter and schedule showing the water management charge for each member agency
P
lease contact me at [email protected] i f you have any questions.
S
incerely,
M
atthew Freiberg
Financial Planning Rates Manager
E
nclosures
cc:
Dennis Herrera, SFPUC, General Manager
Ronald Flynn, SFPUC, Chief of Staff
Steve Ritchie, SFPUC, Water Enterprise Assistant General Manager Nancy Hom, SFPUC, CFO & Business Services AGM
Laura Busch, SFPUC, Deputy CFO
Erin Corvinova, SFPUC, Financial Planning Director
Alison Kastama, SFPUC, BAWSCA & Wholesale Customer Liaison Sheryl Bregman, SF City Attorney
Catherine Malina, SF City Attorney
Christina Tang, BAWSCA, Finance Manager
Wholesale Customer Representatives
Balancing Account / Rate-Setting Calculation Schedule N-1 Reference Section 6.03.A.3
Fiscal Year 2025-26
FY 2023-24 FY 2024-25 FY 2025-26
1. Actual Changes to Balancing Account for FY 2023-24
A. Balancing Account as of June 30, 2024 (adjusted but unaudited) 9,740,392$ B. Interest on Balancing Account and Coverage Reserve (674,992)$ C. Wholesale Revenues for Fiscal Year (319,168,674)$
D. Wholesale Revenue Requirement for Fiscal Year 320,428,960$ E. Net Change in Wholesale Revenue Coverage 1,692,800$
F. Settlement Credits or Other Adjustments -$
G Balancing Account as of June 30, 2024 (unaudited) 12,018,486$
2. Projected Changes to Balancing Account for FY 2024-25 A. Balancing Account as of June 30, 2024 12,018,486$
B. Interest on Balancing Account and Coverage Reserve (1,540,692)$ C. Wholesale Revenues for Fiscal Year (354,630,696)$
D. Wholesale Revenue Requirement for Fiscal Year 332,731,019$ E. Settlement Credits or Other Adjustments -$
F. Balancing Account as of June 30, 2025 (11,421,883)$
G. Net Change in Wholesale Revenue Coverage 976,547$
H. Total Revenue Deficiency or (Surplus) (10,445,336)$
3. Projected Changes to Balancing Account for FY 2025-26 A. Balancing Account as of June 30, 2025 (10,445,336)$
B. Interest on Balancing Account and Coverage Reserve (1,601,046)$ C. Wholesale Revenues for Fiscal Year (374,249,433)$
D. Wholesale Revenue Requirement for Fiscal Year 373,405,853$ E. Settlement Credits or Other Adjustments -$
F. Balancing Account as of June 30, 2026 (12,889,963)$
G. Net Change in Wholesale Revenue Coverage 4,092,531$
H. Total Revenue Deficiency or (Surplus) (8,797,431)$
I. Projected Water Sales in CCF 62,094,519
J. Deficiency or (Surplus) $/CCF (0.14)$
K. Deficiency or (Surplus) CCF as a Percentage of Revenues 2% Schedule of Projected Water Sales, Wholesale Revenue Requirements, and Wholesale Rates Schedule N-3 Reference Section 6.03.A.3
Fiscal Year 2025-26
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 Water Enterprise
Operations & Maintenance Expenses
Source of Supply 23,700,745$ 23,622,156$ 24,478,652$ 25,303,742$ 26,181,761$ 27,076,842$ Pumping -$ -$ -$ -$ -$ -$ Treatment 42,795,982$ 42,654,076$ 44,200,634$ 45,690,484$ 47,275,907$ 48,892,137$ Transmission & Distribution 21,047,628$ 20,977,837$ 21,738,454$ 22,471,182$ 23,250,914$ 24,045,797$ Customer Services 246,996$ 246,177$ 255,103$ 263,702$ 272,852$ 282,180$ Total Operations & Maintenance Expenses 87,791,351$ 87,500,246$ 90,672,844$ 93,729,110$ 96,981,434$ 100,296,957$ Administrative & General Expenses
Countywide Cost Allocation Plan (COWCAP) 1,777,455$ 1,771,561$ 1,835,795$ 1,897,673$ 1,963,520$ 2,030,648$ SFPUC Bureaus 20,162,177$ 20,095,322$ 20,823,942$ 21,525,844$ 22,272,774$ 23,034,217$ Compliance Audit 29,102$ 29,102$ 29,102$ 29,102$ 29,102$ 29,102$ Other Administrative & General 10,548,661$ 10,513,683$ 10,894,890$ 11,262,119$ 11,652,905$ 12,051,286$ Total Administrative & General Expenses 32,517,396$ 32,409,668$ 33,583,728$ 34,714,738$ 35,918,301$ 37,145,252$ Property Taxes 1,351,875$ 1,378,913$ 1,406,491$ 1,434,621$ 1,463,313$ 1,492,580$ Capital Cost Recovery
Debt Service on New Assets 169,720,353$ 180,830,863$ 182,459,072$ 184,825,593$ 197,365,649$ 208,342,816$ Revenue Credit for BABs Subsidy (13,409,611)$ (13,192,530)$ (13,012,922)$ (12,665,241)$ (12,290,920)$ (11,891,831)$ Revenue Funded Capital 14,099,608$ 40,916,815$ 54,433,140$ 53,528,128$ 53,760,749$ 44,072,248$ True-Up of Wholesale Capital Fund -$ -$ -$ -$ -$ -$ Total Capital Cost Recovery 170,410,349$ 208,555,148$ 223,879,291$ 225,688,480$ 238,835,479$ 240,523,234$ Hetch Hetchy Water & Power
Operations & Maintenance Expenses 23,551,264$ 23,473,171$ 24,324,265$ 25,144,152$ 26,016,633$ 26,906,069$ Administrative & General Expenses
Countywide Cost Allocation Plan (COWCAP) 502,237$ 500,572$ 518,722$ 536,206$ 554,812$ 573,779$ SFPUC Bureaus 4,189,967$ 4,176,074$ 4,327,491$ 4,473,355$ 4,628,577$ 4,786,815$ Other Administrative & General 4,277,037$ 4,262,855$ 4,417,418$ 4,566,314$ 4,724,761$ 4,886,288$ Total Administrative & General Expenses 8,969,242$ 8,939,501$ 9,263,631$ 9,575,875$ 9,908,150$ 10,246,882$ Property Taxes 183,815$ 187,492$ 191,241$ 195,066$ 198,968$ 202,947$ Capital Cost Recovery
Debt Service on New Assets 5,581,039$ 5,946,395$ 5,999,936$ 6,077,756$ 6,267,986$ 14,142,221$ Revenue Funded Capital 2,374,687$ 5,015,320$ 2,984,045$ 9,713,199$ 4,773,830$ 20,945,100$ Total Capital Cost Recovery 7,955,727$ 10,961,714$ 8,983,981$ 15,790,955$ 11,041,816$ 35,087,321$ Wholesale Revenue Requirement 332,731,019$ 373,405,853$ 392,305,473$ 406,272,997$ 420,364,095$ 451,901,242$ 1 Schedule of Projected Water Sales, Wholesale Revenue Requirements, and Wholesale Rates Schedule N-3 Reference Section 6.03.A.3
Fiscal Year 2025-26
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 Below the line Adjustments
Interest on Balancing Account and Coverage Reserve (1,540,692)$ (1,601,046)$ (1,309,191)$ (1,372,312)$ (1,082,407)$ (1,055,790)$ Settlement Credits and Other Adjustments -$ -$ -$ -$ -$ -$ Wholesale Debt Service Coverage Reserve 976,547$ 4,092,531$ 651,476$ 977,208$ 4,586,612$ 6,737,672$ Wholesale Revenue Requirement with Adjustments 332,166,874$ 375,897,338$ 391,647,757$ 405,877,893$ 423,868,300$ 457,583,124$ Balancing Account as of June 30 (Beginning of Year) 12,018,486$ (10,445,336)$ (8,797,431)$ (9,248,148)$ (2,264,862)$ 295,412$ Balancing Account Deferral 10,445,336$ 8,797,431$ 9,248,148$ 2,264,862$ (295,412)$ -$ Revenue Loss to Contractual Discounts 2,344,158$ 2,398,470$ 2,423,537$ 2,452,782$ 2,578,117$ 2,787,009$ Revenue Loss for Untreated Water 83,574$ 86,153$ 91,936$ 95,187$ 98,552$ 102,037$ Wholesale Revenues Before Rate Change
Volumetric Charges (323,512,446)$ (363,307,161)$ (385,476,341)$ (391,553,594)$ (398,356,378)$ (420,753,981)$ Excess Use Charges / Minimum Purchase -$ -$ -$ -$ -$ -$ Service Charges (4,982,503)$ (5,097,101)$ (5,149,920)$ (5,211,719)$ (5,475,381)$ (5,914,818)$ Total Wholesale Deficiency or (Credit) 28,563,479$ 8,329,794$ 3,987,686$ 4,677,261$ 20,152,937$ 34,098,783$ Wholesale Deficiency or (Credit) as a Percent of Volumetric Charges 8.8% 2.3% 1.0% 1.2% 5.1% 8.1% Projected Water Sales (MGD) 127.3 MGD 131.3 MGD 136.2 MGD 136.6 MGD 137.7 MGD 138.4 MGD Projected Water Sales (CCF) 62,094,519 64,075,337 66,461,438 66,818,019 67,176,455 67,536,755 Wholesale Deficiency or Credit ($/CCF) $0.46 $0.13 $0.06 $0.07 $0.30 $0.50 Wholesale Rate ($/CCF) $5.67 $5.80 $5.86 $5.93 $6.23 $6.73 Projected Service Charge Revenues 4,982,503$ 5,097,101$ 5,149,920$ 5,211,719$ 5,475,381$ 5,914,818$ Projected Volume Charge Revenues 349,648,193$ 369,152,332$ 386,948,554$ 393,682,887$ 415,832,646$ 451,633,312$ Total Wholesale Revenues After Rate Change 354,630,696$ 374,249,433$ 392,098,474$ 398,894,606$ 421,308,027$ 457,548,130$ 2 Calculation of Untreated Water Discount Rate for Coastside County Water District Rate-Setting for Fiscal Year 2025-26
Wholesale Share of HTWTP Expenses to be Removed
Operations & Maintenance 12,073,284$
Cash Funded Capital -$
Debt Service 13,061,685$
Total HTWTP Expense to be Removed 25,134,969$
Total Wholesale Water Consumption (CCF) 64,075,337
Untreated Water Rate Discount ($/CCF) 0.39$
Untreated Water Rate Discount ($/acre foot) 169.88$
SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Effective July 1, 2025
SCHEDULE W-25: Wholesale Use with Long-Term Contract
For service to municipalities, water districts and others who, under long- term contracts, purchase water for resale:
First: A Monthly Service Charge base on the type and size of the meter:
Meter Size Turbine Meters
(C-701, Class II)
Electronic Meters
(C-715, Class II)
Displacement Meters
(C-700, Class II)
2" - - $143
3" $400 $321 -
4" $690 $531 -
6" $1,471 $736 -
8" $2,575 $1,839 -
10" $3,862 $2,759 -
12" - $3,679 -
16" $7,173 - -
The service charge for a battery of meters installed on one service in lieu of one meter or for a special type of meter , shall be based on the size of single or multiple standard type meters of equivalent capacity.
Second: A charge for water delivered based on one-month’s meter readings:
$2,526.47 per acre-foot or $5.80 per 100 cu. ft.
Third: An Untreated Wholesale Water Rate Discount Factor for Wholesale Customers receiving untreated water, based on one-month’s meter readings:
($169.88) per acre-foot or ($0.39) per 100 cu. ft.
155 Bovet Road, Suite 650, ⚫ San Mateo, CA 94402 ⚫ ph 650 349 3000 ⚫ fx 650349 8395 ⚫ www.bawsca.org
January 17, 2025
Mrs. Erin Corvinova, Financial Planning Director
San Francisco Public Utilities Commission
525 Golden Gate Avenue, 4th Floor
San Francisco, CA 94102
Subject: BAWSCA FY 2025-26 Bond Surcharge Schedule
Dear Erin:
Pursuant to Section 3.01 (a) of the Prepayment and Collection Agreement between the Bay Area Water Supply and Conservation Agency (BAWSCA) and the City and County of San Francisco (San Francisco), dated January 1, 2013 (Agreement), BAWSCA shall deliver a written schedule to San Francisco at least 45 days prior to the beginning of each fiscal year showing the amount of the surcharge that BAWSCA seeks to impose for such fiscal year.
Attached is BAWSCA’s FY 2025-26 annual and monthly bond surcharge for each member agency that was adopted by the BAWSCA Board on January 16, 2025.
Pursuant to Section 3.02 (a) of the Agreement, San Francisco shall include the identified monthly surcharge in the first wholesale water bill for the largest amount delivered to BAWSCA’s member agencies each month, effective July 1, 2025.
If you have any questions about the billing of BAWSCA’s surcharges, please contact me at (650) 349-3000.
Sincerely,
Christina Tang
Finance Manager
Attachment: BAWSCA FY 2025-26 Bond Surcharges
cc: Nancy Hom, SFPUC
Laura Busch, SFPUC
Alison Kastama, SFPUC
Tom Smegal, BAWSCA
Allison Schutte, BAWSCA Legal Counsel
Attachment
BAWSCA FY 2025-26 Bond Surcharges
155 Bovet Road, Suite 650 ⚫ San Mateo, CA 94402 ⚫ ph 650 349 3000 ⚫ fx 650 349 8395 ⚫ www.bawsca.org
July 19, 2024
Via email to [email protected]
Mr. Dennis Herrera
General Manager
San Francisco Public Utilities Commission
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
Subject: Water Management Charge
Dear Mr. Herrara,
At its meeting on July 18, 2024, the BAWSCA Board of Directors approved the staff recommendation to fund the development of the Long-Term Reliable Water Supply Strategy 2050 (Strategy 2050) by means of the Water Management Charge authorized in Section 3.06.A of the 2021 Amended and Restated Water Supply Agreement.
The purpose of this letter is to formally request the San Francisco Public Utilities Commission (SFPUC) to include, as a separate line item on water bills sent to Wholesale Customers, a Water Management Charge in the amount and for a time- period described below.
The BAWSCA Board approved a budget of $2,447,000 intended to fund the development of Strategy 2050. The work will commence in January 2025 and will continue through January 2027. This amount will need to be collected over 18 months, starting with bills issued in September. The Board also decided that the cost of the development of Strategy 2050, to be funded through the Water Management Charge, should be allocated among the Wholesale Customers in proportion to their water purchases from SFPUC during FY 2000-01.
The attached table shows the amount of the Water Management Charge to be included in each Wholesale Customer’s monthly water bill as its proportional share of Strategy 2050 costs.
Ms. Kastama has been helpful in starting the preparations to implement collection of the Water Management Charge in anticipation of the Board’s action. Ms. Kastama has indicated that the SFPUC water billing program will be tested in August to ensure that it is capable of including the Water Management Charge once the SFPUC has received a formal request from BAWSCA. Ms. Kastama has indicated that she is confident that the system can accommodate our request.
Mr. Dennis Herrera
July 19, 2024
I have asked Negin Ashoori to take the lead role in coordinating with SFPUC on the administrative matters involved in billing, collecting and remitting Water management Charge revenue. She will be in touch with Ms. Kastama shortly. Naturally, if you have any questions about this letter, or if any concerns arise while the Water Management Charge is being implemented, please let me know directly.
Thank you for your continued cooperation.
Sincerely,
Nicole M. Sandkulla,
Chief Executive Officer / General Manager
cc: N. Hom, SFPUC Chief Financial Officer/Asst. GM, Business Services S. Richie, SFPUC Asst. GM, Water Enterprise
A. Kastama, SFPUC, BAWSCA Liaison
M. Frieberg, SFPUC Rates Manager
BAWSCA Water Management Representatives
A. Schutte, Hanson Bridgett
Mr. Dennis Herrera
July 19, 2024
Table 1: Application and Allocation of Water Management Charge for Development of Strategy 2050
Project: Long Term Reliable Water Supply Strategy 2050 Total Cost ($M): $2.447
Collection Time Period: Sep. 2024 – Feb. 2026 (18 months) Derivation of Monthly Charges for Each Agency
Agency Actual FY 2000-01 SFPUC
Purchases
Water Management Charge
Proportionate
to Usage
Ccf/Yr. Percentage Total Agency Share Dollars/Month
A B C D
Alameda CWD 5,733,920 6.7% $164,441 $9,136
Brisbane 178,451 0.2% $5,118 $284
Guadalupe Valley ID 222,972 0.3% $6,395 $355
Burlingame 2,373,507 2.8% $68,069 $3,782
Cal Water-Bear Gulch 5,833,013 6.8% $167,283 $9,294
Cal Water-Mid Peninsula 8,499,018 10.0% $243,741 $13,541 Cal Water-SSF 3,775,630 4.4% $108,280 $6,016
Coastside 755,636 0.9% $21,671 $1,204
Daly City 2,215,685 2.6% $63,543 $3,530
East Palo Alto 1,045,526 1.2% $29,984 $1,666
Estero 2,873,777 3.4% $82,416 $4,579
Hayward 8,959,450 10.5% $256,945 $14,275
Hillsborough 1,861,166 2.2% $53,376 $2,965
Menlo Park 1,684,982 2.0% $48,323 $2,685
Mid-Peninsula 1,747,989 2.0% $50,130 $2,785
Millbrae 1,339,215 1.6% $38,407 $2,134
Milpitas 3,444,476 4.0% $98,783 $5,488
Mountain View 5,423,871 6.4% $155,550 $8,642
North Coast 1,676,847 2.0% $48,090 $2,672
Palo Alto 6,730,016 7.9% $193,008 $10,723
Purissima Hills 1,066,141 1.2% $30,576 $1,699
Redwood City 5,749,916 6.7% $164,900 $9,161
San Bruno 1,192,026 1.4% $34,186 $1,899
San Jose 2,349,220 2.8% $67,373 $3,743
Santa Clara 1,997,584 2.3% $57,288 $3,183
Stanford 1,315,366 1.5% $37,723 $2,096
Sunnyvale 4,785,841 5.6% $137,252 $7,625
Westborough 493,441 0.6% $14,151 $786
Total 85,324,682 100% $2,447,000 $135,944