Water Rates vs. Conservation
Water delivery in Foster City is provided through a Water Enterprise Fund operating as the Estero Municipal Improvement District (EMID). EMID operates as a not-for-profit type business where it purchases water from the San Francisco Water Department, a department of the San Francisco Public Utilities Commission (SFPUC). The water is delivered to the EMID through the Hetch Hetchy water distribution system where it is stored in our water tanks. The water is then sold to us as customers of the district based primarily on water usage. The funds received are used to purchase the water, continuously test water quality, maintain the delivery system, and pay workers. By definition, Enterprise Funds are intended to be self-sustaining.
In 2008, San Francisco city officials approved a $4.4 billion project to seismically retrofit the Hetch Hetchy water system and a debt that will be repaid by us as consumers. The project is intended to upgrade the aging infrastructure and introduce modern technology to deal with a potential major earthquake. The Hetch Hetchy system crosses three major earthquake fault lines delivering water to the three peninsula counties as well as Alameda County.
It is estimated that by 2030, the amount of water needed will increase to an average of 300 million gallons per day from the current 265 million gallons. The approved project is geared to maintain the 265 million gallon average until 2018. The SFPUC plans to study how the remaining 35 million gallon shortfall can be addressed. Local conservation has been identified as something that can be started immediately and the public outreach has started.
The water conservation message made its way out to the public and was taken very seriously. Those of us in the Hetch Hetchy water system have done such a good job of conserving water that our water rates have noticeably increased. The question is why rates are going up when usage is going down. The principles of supply and demand we learned in Economics class do not seem to apply. One would think that because demand is down supply would increase which usually results in lower prices. Not so when it comes to the public sector.
The SFPUC appears to operate on a base costing method and counts on expected revenue levels. Through serious water conservation from consumers, revenues from the sale of water have been reduced thereby prompting the SFPUC to charge higher rates for water. These increased rates that the SFPUC is charging have to be passed on to the consumers. EMID can not charge less for water than what it pays for it. The current increase from $1.90 to $2.80 could possibly reach $2.90 for each unit (748 gallons) when all is said and done. If we pay $2.80 per unit and charge less than $2.80 per unit, the District will be of out of money in short order, EMID will not be able to purchase any more water and nothing will come out of your tap.
The bad news – regrettably, our water rates have gone up. The good news – even with the increased water rates, EMID customers will experience the third lowest cost among 13 water providers and districts on the Peninsula.
As we all know, history has a way of repeating itself. In the late 1970’s, those of us who were in the Bay Area at that time might remember the water shortage and conservation themes. We put bricks in the water tanks of our toilets to conserve water. We were reminded that it took 36 gallons for a full bathtub, 25 gallons for a long shower, 30 gallons to wash dishes, seven to flush a toilet, ten gallons a minute to sprinkle a lawn. Water rates went up as conservation increased.
So here we are again some thirty plus years later and once again we are being charged more per unit as a reward for our lower water consumption and conservation. In the long run, we need to conserve on our water usage which is most apparent during drought periods. However, I would think that if the SFPUC expects serious conservation from us consumers, they might consider finding ways to reduce costs and become more efficient in their operations.
I would appreciate your comments on this and other issues by emailing me at email@example.com.
May 04, 2011
Water Rates vs. Conservation