SAN DIEGO COUNTY WATER AUTHORITY
WATER RATE PASS‐THROUGH
OCTOBER 15, 2024
The San Diego County Water Authority substantially
increased water rates beginning January 1, 2025
Why are we here?
• 4‐year rates adopted November 2, 2021
• Effective for Calendar Years 2022, 2023, 2024 and 2025 • Water purchase costs = ~60% of water operating
budget
• Adopted rates assumed 6% annual increase for
purchased water costs
Poway Water Rate Overview
• Authorized by California Government Code
• Best practice: many California utility agencies use pass‐ through adjustments to recover the cost of water
supplies, treatment services, and electric power
• 20 of 23 water retail providers in San Diego County have pass‐through provisions in their adopted rate structure • Poway does not
Overview of Pass‐Through Rate Adjustments
• Much larger increase for 2025 to Poway vs anticipated in current rate schedule
• Projected rate Increase = 6.0%
• Actual rate increase = 13.52%
• Financial Impact to Poway = additional $1.27 million in 2025 for purchased water costs
• Water Fund cannot absorb this large wholesale water
purchase cost increase from the San Diego County Water
Authority
San Diego County Water Authority Rate Increases
• Major factors impacted pass‐through rate adjustments
from SDCWA:
• Capital projects
• Project Labor Agreements
• Metropolitan Water District purchases
• Rainbow and Fallbrook detachment from SDCWA
San Diego County Water Authority Rate Drivers
• City retained Raftelis Financial Consultants as third‐party water rate setting experts with over 30‐years experience • Scope: analyze water rate model based on large wholesale water purchase cost increases from the San Diego County Water Authority
• Calculate equitable and legal pass‐through rate
adjustments for consideration
• Comply with Proposition 218 and other statutes
Third Party Water Rate Setting Experts
Calculated San Diego County Water Authority Pass‐
Through Rates
Difference
Estimated 2025 Water
Supply Costs Based on
Adopted SDCWA Rates
Water Supply Costs in
Adopted 2025
RatesItem
$1,266,063$20,220,031$18,953,968SDCWA Costs
3,941,1123,941,112Demand (HCF)
$5.13 $4.81 Unit Cost of Service
$0.32 Required Pass-Through Adjustment ($/HCF)
Average Single Family Residential Customer Impact
• Current 2024 countywide water service bill under same scenario is $271/bimonthly period
• Poway has remained right at the countywide average since 2021 4‐year rate adjustments
• 2025 San Diego County Water Authority increases affect all retail water service providers
1. Assumes the average residential customer has a ¾” meter and uses 29 units of water bimonthly.
2. Proposed rate increase impact for the average residential customer.
Existing
Approved
Jan. 2025
Proposed
Jan. 2025
Revenue Increase (%) N/A 8% 3.2%2
Estimated Water Bill1 $269.90 $293.41 $302.73
Impact ($) N/A $23.51 $9.32
Proposed San Diego County Water Authority Pass‐
Through Rates
Revised
2025 Rates
Proposed Pass-
Through
Adjustment
Adopted 2025
RatesCommodity Rate
Single Family Residential
$6.72$0.32$6.40Tier 1: 0-20 HCF
$7.78$0.32$7.46Tier 2: 21-56 HCF
$10.69$0.32$10.37Tier 3: 57+ HCF
$6.88$0.32$6.56Multi-Family Residential
$9.41$0.32$9.09Landscape Irrigation
$7.29$0.32$6.97Non-Residential
$7.29$0.32$6.97City Potable Usage
• Set the San Diego County Water Authority pass‐through rate public hearing for December 3, 2024 at 7:00pm, and • Authorize the issuance of a Proposition 218 notice
(Attachment A to the staff report)
• If approved rates would be effective January 1, 2025
Requested Council Action