Higher Water Rates Likely Due to Mandate

drought

This is the time of year when water utilities set their rates, which almost inevitably go up. But this year, the rate hikes are likely to be higher than usual, as water utilities cope with the unexpected impact of mandatory conservation on their budgets.

Will this effect the value of your home?  Contact the appraisers at www.scappraisals.com for your value questions.

On April 12, Metropolitan’s board of directors is scheduled to vote on its prices for 2017 and 2018. These prices will be passed down to customers like the San Diego County Water Authority. In turn, the Water Authority sells to retail agencies that sell to the ultimate residential, business and agricultural customers.

The act of balancing supply, demand, expenses and revenues for this bucket brigade is complicated enough in normal times. But Gov. Jerry Brown’s 2015 order for an average 25 percent reduction in potable water user upset financial calculations.

In general, most costs of water utilities are fixed, and their revenues are tied to sales to varying degrees. Circumstances differ among agencies, but in many cases they can only make up the shortfall by dipping into reserves or raising rates even more than they otherwise would do. That doesn’t go over very well with customers, who may feel that they’re being punished for doing what they were asked to do.

read more at: http://www.sandiegouniontribune.com/news/2016/apr/10/water-conservation-finances/

Disclaimer: for information and entertainment purposes only

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