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
April 6, 2023
Ms. Nicole Sandkulla
CEO/General Manager
Bay Area Water Supply & Conservation Agency
155 Bovet Road, Suite 650
San Mateo, CA 94402
Re: Fiscal Year 2023-24 Wholesale Water Rates Notice
Dear Ms. Sandkulla,
The San Francisco Public Utilities Commission (SFPUC) has determined that the Fiscal Year 2023-24 Wholesale Water Rates will be $5.21 per CCF, representing a $0.46 per CCF or 9.7% increase from the current rate for treated wholesale water, effective July 1, 2023. 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:
May 9, 2023, 1:30 PM
San Francisco City Hall
1 Dr. Carlton B. Goodlett Place, Room 400
San Francisco, CA 94102
The main drivers of the rate increase are water sales volumes and the balancing account. Unlike in prior years, expenditures are not a major driver; the Fiscal Year 2023-24 Wholesale Revenue Requirement is projected to be essentially flat as compared to the prior year. Reduced water usage as the region recovers from drought will, all else equal, require higher rates. Volumes for FY 2023-24 are projected to be 122.6 MGD, based on the latest currentyear forecasts and an expected slow recovery from drought conditions over the next three years. In addition, the SFPUC plans to fully pay off the balancing account by the end of FY 2022-23, eliminating the balancing account as a tool to mitigate rate increases.
The SFPUC has reduced the projected wholesale rate increase from the 11.6% presented at the Wholesale Customer Annual Meeting, mostly due to increased volume forecasts as drought conditions have improved.
Monthly Meter Charges
As part of the ongoing wholesale meter calibration and replacement project, new meter technologies and sizes are planned to replace certain wholesale meters. To ensure there are valid monthly service charges for all meters planned to be installed during FY 2023-24, Schedule W-25 has renamed the column “Magnetic Meters” to “Electronic Meters” to capture the broader technology, and added a proportional charge for the 10” electronic meter size based on the relative pricing of the new meters and the existing monthly meter charges for the 8” and 12” meters in the same category.
At this time, the SFPUC is not updating the rate structure or changing any of the existing monthly meter charges. However, with changes to meters upcoming, we expect to revisit this issue in the coming years following the process outlined in WSA Section 6.04.B to consider changes to the structure and amounts of the monthly meter charges.
Untreated Wholesale Water Rate Discount Factor
The Fiscal Year 2023-24 Untreated Wholesale Water Rate Discount will be $0.38 per CCF, a decrease of $0.05 from the current rate, effective July 1, 2023. 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. The decrease is driven by expenses (especially capital) for other facilities increasing in cost, causing costs related to Harry Tracy to represent a smaller portion of overall expenditures.
The San Francisco Public Utilities Commission will hold a public hearing on this rate at its May 9, 2023 meeting.
Fiscal Year 2023-24 Billing
As in prior years, the following charges, unrelated to the Wholesale Revenue Requirement, will be effective July 1, 2023:
• 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.
• 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. 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 Revenue Requirements and Wholesale Rates: A schedule showing projected Wholesale Customer water sales and rates for the proposed rate year and the following four fiscal years
• FY 2023-24 Calculation of Untreated Water Discount Factor • Schedule W-25: Wholesale Use with Long-Term Contract - Proposed Fiscal Year 2023-24 Wholesale Customer water rates
• Fiscal Year 2023-24 BAWSCA Bond Surcharge letter and schedule showing the bond surcharge for each member agency
If you have any questions, please contact me at 415-487-5227 or [email protected].
Sincerely,
Erin Corvinova
Financial Planning Director
Enclosures
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
Charles Perl, SFPUC, Deputy CFO
Alison Kastama, SFPUC, BAWSCA Liaison
Sheryl Bregman, SF City Attorney
Catherine Malina, SF City Attorney
Christina Tang, BAWSCA, Finance Manager
Balancing Account / Rate-Setting Calculation Schedule N-1 Reference Section 6.03.A.3
Fiscal Year 2023-24
FY 2021-22 FY 2022-23 FY 2023-24
1. Actual Changes to Balancing Account for FY 2021-22
A. Balancing Account as of June 30, 2021 (unaudited) $ (62,980,471) B. Interest on Balancing Account and Coverage Reserve $ (625,733) C. Wholesale Revenues for Fiscal Year $ (257,016,936)
D. Wholesale Revenue Requirement for Fiscal Year $ 287,385,517 E. Net Change in Wholesale Revenue Coverage $ 2,278,271 F. Settlement Credits or Other Adjustments $ 346,750
G Balancing Account as of June 30, 2022 (unaudited) $ (30,612,601)
2. Projected Changes to Balancing Account for FY 2022-23 A. Balancing Account as of June 30, 2022 $ (30,612,601) B. Interest on Balancing Account and Coverage Reserve $ (346,573) C. Wholesale Revenues for Fiscal Year $ (287,269,832)
D. Wholesale Revenue Requirement for Fiscal Year $ 309,804,997 E. Settlement Credits or Other Adjustments $ -
F. Balancing Account as of June 30, 2023 $ (8,424,009)
G. Net Change in Wholesale Revenue Coverage $ 14,151,740 H. Total Revenue Deficiency or (Surplus) $ 5,727,731
3. Projected Changes to Balancing Account for FY 2023-24 A. Balancing Account as of June 30, 2023 $ 5,727,731
B. Interest on Balancing Account and Coverage Reserve $ (205,946) C. Wholesale Revenues for Fiscal Year $ (316,910,758)
D. Wholesale Revenue Requirement for Fiscal Year $ 309,852,665 E. Settlement Credits or Other Adjustments $ -
F. Balancing Account as of June 30, 2024 $ (1,536,308)
G. Net Change in Wholesale Revenue Coverage $ 1,692,800 H. Total Revenue Deficiency or (Surplus) $ 156,491
I. Projected Water Sales in CCF 59,998,214
J. Deficiency or (Surplus) $/CCF $ 0.00
K. Deficiency or (Surplus) CCF as a Percentage of Revenues 0% Schedule of Projected Water Sales, Wholesale Revenue Requirements, and Wholesale Rates Schedule N-3 Reference Section 6.03.A.3
Fiscal Year 2023-24
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Water Enterprise
Operations & Maintenance Expenses
Source of Supply $ 20,894,757 $ 20,931,214 $ 21,756,703 $ 23,961,009 $ 24,706,839 $ 26,863,628 Pumping $ - $ - $ - $ - $ - $ -
Treatment $ 34,620,283 $ 34,680,688 $ 36,048,432 $ 39,700,722 $ 40,936,479 $ 44,510,037 Transmission & Distribution $ 18,650,456 $ 18,682,997 $ 19,419,820 $ 21,387,363 $ 22,053,083 $ 23,978,212 Customer Services $ 207,908 $ 208,271 $ 216,485 $ 238,418 $ 245,839 $ 267,300 Total Operations & Maintenance Expenses $ 74,373,404 $ 74,503,170 $ 77,441,440 $ 85,287,512 $ 87,942,241 $ 95,619,177 Administrative & General Expenses
Countywide Cost Allocation Plan (COWCAP) $ 1,358,012 $ 1,360,382 $ 1,414,033 $ 1,557,297 $ 1,605,771 $ 1,745,947 SFPUC Bureaus $ 17,027,659 $ 17,057,368 $ 17,730,080 $ 19,526,424 $ 20,134,220 $ 21,891,841 Compliance Audit $ 97,396 $ 97,566 $ 101,414 $ 111,689 $ 115,166 $ 125,219 Other Administrative & General $ 8,135,537 $ 8,149,732 $ 8,471,143 $ 9,329,407 $ 9,619,802 $ 10,459,564 Total Administrative & General Expenses $ 26,618,605 $ 26,665,048 $ 27,716,670 $ 30,524,817 $ 31,474,958 $ 34,222,571 Property Taxes $ 1,340,685 $ 1,343,024 $ 1,395,990 $ 1,537,427 $ 1,585,282 $ 1,723,669 Capital Cost Recovery
Pre-2009 Assets (K-1 to K-4) $ - $ - $ - $ - $ - $ -
Pre-2009 Assets (K-5) $ - $ - $ - $ - $ - $ -
Debt Service on New Assets $ 173,054,150 $ 172,612,150 $ 173,197,331 $ 176,447,902 $ 176,532,126 $ 179,939,115 Revenue Credit for BABs Subsidy $ (13,929,253) $ (13,510,503) $ (13,282,490) $ (13,034,940) $ (12,752,688) $ (12,440,134) Revenue Funded Capital $ 16,900,000 $ 16,737,500 $ 16,827,500 $ 16,915,000 $ 16,992,500 $ 17,070,000 True-Up of Wholesale Capital Fund $ - $ - $ - $ - $ - $ - Total Capital Cost Recovery $ 176,024,897 $ 175,839,148 $ 176,742,341 $ 180,327,961 $ 180,771,938 $ 184,568,981 Hetch Hetchy Water & Power
Operations & Maintenance Expenses $ 20,052,018 $ 20,087,004 $ 20,879,200 $ 22,994,601 $ 23,710,350 $ 25,780,149 Administrative & General Expenses
Countywide Cost Allocation Plan (COWCAP) $ 558,639 $ 559,614 $ 581,684 $ 640,618 $ 660,558 $ 718,222 SFPUC Bureaus $ 3,579,000 $ 3,585,245 $ 3,726,640 $ 4,104,209 $ 4,231,960 $ 4,601,390 Other Administrative & General $ 3,900,561 $ 3,907,367 $ 4,061,466 $ 4,472,959 $ 4,612,188 $ 5,014,810 Total Administrative & General Expenses $ 8,038,200 $ 8,052,225 $ 8,369,790 $ 9,217,786 $ 9,504,706 $ 10,334,422 Property Taxes $ 186,932 $ 187,258 $ 194,644 $ 214,364 $ 221,037 $ 240,332 Schedule of Projected Water Sales, Wholesale Revenue Requirements, and Wholesale Rates Schedule N-3 Reference Section 6.03.A.3
Fiscal Year 2023-24
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Capital Cost Recovery
Pre-2009 Assets (K-1 to K-4) $ - $ - $ - $ - $ - $ -
Pre-2009 Assets (K-5) $ - $ - $ - $ - $ - $ -
Debt Service on New Assets $ - $ - $ - $ - $ - $ -
Revenue Funded Capital $ - $ - $ - $ - $ - $ -
Total Capital Cost Recovery $ - $ - $ - $ - $ - $ -
Wholesale Revenue Requirement $ 309,804,997 $ 309,852,665 $ 316,041,108 $ 333,739,950 $ 338,959,154 $ 356,565,183 Balancing Account as of June 30 (Beginning of Year) $ (30,612,601) $ 5,727,731 $ 156,491 $ (7,176,606) $ (328,395) $ 80,243 Balancing Account Deferral $ (5,727,731) $ (156,491) $ 7,176,606 $ 328,395 $ (80,243) $ - Interest on Balancing Account and Coverage Reserve $ (346,573) $ (205,946) $ (273,414) $ (315,614) $ (294,609) $ (305,304) Settlement Credits and Other Adjustments $ - $ - $ - $ - $ - $ - Wholesale Debt Service Coverage Reserve $ 14,151,740 $ 1,692,800 $ 521,076 $ 4,773,343 $ 370,437 $ 4,691,319 Wholesale Revenues Before Rate Change
Volumetric Charges $ (244,230,329) $ (284,991,518) $ (319,301,806) $ (327,029,408) $ (328,010,496) $ (336,225,110) Excess Use Charges / Minimum Purchase $ - $ - $ - $ - $ - $ - Service Charges $ (4,320,061) $ (4,320,061) $ (4,320,061) $ (4,320,061) $ (4,320,061) $ (4,320,061) Total Wholesale Deficiency or (Credit) $ 38,719,442 $ 27,599,179 $ (0) $ (0) $ 6,295,787 $ 20,486,271 Wholesale Deficiency or (Credit) as a Percent of Volumetric Charges 15.9% 9.7% 0.0% 0.0% 1.9% 6.1%
Projected Water Sales (MGD) 122.1 MGD 122.6 MGD 125.6 MGD 128.6 MGD 129.0 MGD 129.4 MGD Projected Water Sales (CCF) 59,568,373 59,998,214 61,286,335 62,769,560 62,957,869 63,319,230 Wholesale Deficiency or Credit ($/CCF) $0.65 $0.46 $0.00 $0.00 $0.10 $0.32 Wholesale Rate ($/CCF) $4.75 $5.21 $5.21 $5.21 $5.31 $5.63 Projected Service Charge Revenues $ 4,320,061 $ 4,320,061 $ 4,320,061 $ 4,320,061 $ 4,320,061 $ 4,320,061 Projected Volume Charge Revenues $ 282,949,771 $ 312,590,697 $ 319,301,806 $ 327,029,408 $ 334,306,283 $ 356,487,263 Total Wholesale Revenues After Rate Change $ 287,269,832 $ 316,910,758 $ 323,621,867 $ 331,349,468 $ 338,626,344 $ 360,807,324 Calculation of Untreated Water Discount Rate for Coastside County Water District Rate-Setting for Fiscal Year 2023-24
Wholesale Share of HTWTP Expenses to be Removed
Operations & Maintenance $ 9,933,451
Cash Funded Capital $ -
Debt Service $ 13,016,807
Total HTWTP Expense to be Removed $ 22,950,258
Total Wholesale Water Consumption (CCF) 59,998,214
Untreated Water Rate Discount ($/CCF) $ 0.38
Untreated Water Rate Discount ($/acre foot) $ 165.53
Impact on Wholesale and Retail Customers
Untreated Water Rate Discount ($/CCF) $ (0.38)
Projected Coastside County Water District Annual Consumption (CCF) 409,082 Net Impact of Untreated Water Rate Discount $ (155,451) Wholesale Retail
Proportional Annual Use 66.95% 33.05%
Allocation of Untreated Water Rate Discount $ (104,075) $ (51,377) Projected Annual Treated Water Usage (CCF) 59,177,098 27,098,598 Average Wholesale Rate Impact ($/CCF) $ (0.0018) $ (0.0019)
SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Effective July 1, 2023
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
Disc/Compound
Meters
Crest Meters Electronic
Meters
Turbine Meters
5/8 in. $11 - - -
3/4 in. $18 - - -
1 in. $30 - - -
1 1/2 in. $43 - - -
2 in. $79 - - -
3 in. $158 - - -
4 in. $318 $353 - $577
6 in. $476 $685 - $1,256
8 in. $635 $1,335 $2,265 $1,875
10 in. $793 $1,732 $3,769 $3,391
12 in. $953 $1,840 $5,159 -
16 in. $1,270 $5,628 - $7,215
18 in. - $6,133 - -
20 in. - $6,349 - -
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:
$2,269.48 per acre-foot or $5.21 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:
($165.53) per acre-foot or ($0.38) per 100 cu. ft.
155 Bovet Road, Suite 650, ⚫ San Mateo, CA 94402 ⚫ ph 650 349 3000 ⚫ fx 650349 8395 ⚫ www.bawsca.org March 23, 2023
Mrs. Erin Corvinova, Financial Planning Director
San Francisco Public Utilities Commission
525 Golden Gate Avenue, 4th Floor
San Francisco, CA 94102
Subject: BAWSCA FY 2023-24 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 2023-24 annual and monthly bond surcharge for each member agency that was adopted by the BAWSCA Board on March 16, 2023. 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, 2023.
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 2023-24 Bond Surcharges
cc: Nancy Hom, SFPUC
Charles Perl, SFPUC
Alison Kastama, SFPUC
Nicole Sandkulla, BAWSCA
Allison Schutte, BAWSCA Legal Counsel
Attachment
BAWSCA FY 2023-24 Bond Surcharges
Agency
Annual
Bond
Surcharge
Monthly
Bond
Surcharge
Agency
Annual
Bond
Surcharge
Monthly
Bond
Surcharge
Alameda County WD $1,953,084 $162,757 Mid Pen WD $382,716 $31,893 Brisbane Water $88,836 $7,403 Millbrae $259,068 $21,589 Burlingame $535,692 $44,641 Milpitas $603,300 $50,275
Coastside County WD $200,844 $16,737 Mountain View $1,259,184 $104,932 CWS - Bear Gulch $1,741,944 $145,162 North Coast WD $384,468 $32,039 CWS - Mid Peninsula $2,117,772 $176,481 Palo Alto $1,681,620 $140,135 CWS - South SF $1,254,756 $104,563 Purissima Hills WD $284,196 $23,683 Daly City $611,436 $50,953 Redwood City $1,238,604 $103,217 East Palo Alto WD $227,640 $18,970 San Bruno $243,912 $20,326 Estero Municipal ID $594,012 $49,501 San Jose (North) $678,312 $56,526 Guadalupe Valley $13,908 $1,159 Santa Clara $534,180 $44,515 Hayward $2,445,576 $203,798 Stanford University $263,520 $21,960 Hillsborough $382,572 $31,881 Sunnyvale $1,463,484 $121,957 Menlo Park $408,612 $34,051 Westborough WD $64,524 $5,377 Total $21,917,772 $1,826,481