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Tiered Rates
Cathedral City City
Council Study Session
Oct. 22, 2008
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Coachella Valley water demands668,900 acre-feet
Domestic34%
Golf 16%
Ag 50%
Agriculture Golf Domestic
* Valleywide demands on all sources of water
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Water Management Plan goals
Agriculture –
7% reduction by 2015
Golf –
5% by 2010
Domestic –
10% by 2010 (currently at 6%)
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Why adopt tiered rates?
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#1 Reason: Water Conservation•
Proven water savings results 22% -
37%
•
Increased cost of imported water
•
Proposed legislation calls for 20% reduction by 2020•
Reduced water down streets
•
Lower maintenance costs•
Keep economy viable
•
Ensure long-term viability of the aquifer
•
Prevent subsidence•
Improve overall perception of the valley’s water use
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0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Janu
ary
Febr
uary
March
April
May
June July
Augus
tSep
tembe
r
Octobe
rNov
embe
rDec
embe
r
Month
Cons
umpt
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(Ccf
)
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Wea
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(Et i
n in
ches
)
Consumption Eto
Water consumption and efficiency
Wasted Water
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What are the different types of water rates?
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Volumetric rates (like CVWD uses now) are:
•
A rate structure where the unit price of water remains the same regardless of water consumption
• Little economic incentive to conserve
Base rate
Units of water
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•
A rate structure where the price of water increases with each higher level, or tier, of consumption
• A “one size fits all”
solution
• A simple, increasing block rate
• Difficult to attain
• Based on arbitrary tiers
Standard tiered rates are:
Low rate
Middle rate
Higher rate
Units of water
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Water budget-based tiered rates are:
•
Individualized, defining the water budget using one or more customer characteristics, including:
–
Number in household
–
Lot size
–
Weather conditions
•
An incentive to be efficient
•
A means to target inefficient water users
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Who else uses a tiered rate structure?
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Southern California Agencies:•
Hi-Desert Water Agency
•
Mission Springs
•
Cucamonga Water District
•
Irvine Ranch Water District
•
Rancho California
•
San Clemente
•
Capistrano Valley
•
Santa Barbara
•
Crescenta
Valley
•
LA DWP
•
Lake Arrowhead
Northern California Agencies:•
City of Rhonert
Park
•
Contra Costa Water
•
Monterey
•
Out of State Agencies:
•
Salt Lake City
•
Southern Nevada
•
Las Vegas
•
Albuquerque
•
Centennial, Colorado
•
Aurora, Colorado
•
Castle Rock, Colorado
•
Boulder, Colorado
•
Morrisville, NC
•
Cary, NC
•
Marco Island, FL
•
Santa Rosa
•
Redwood City
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Starting point
•
Start with residential (single family homes) and dedicated landscape customers (cities, school, HOAs, etc) only
•
Implement in 2009
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Indoor allocation
•
Provides generous “indoor needs”
allotment based on more than 4 people (10 Ccf
or 250 gpd)
•
Industry standard for indoor use is 60 gpd
per person
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Landscaped area
•
Assumes 45% of lot is landscaped
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Promotes irrigation efficiency
•
Assume grass landscaping with spray irrigation
•
Irrigation efficiency important for meeting water budgets
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Adjusts for weather
•
Adjusts for observed weather data
•
Five climate zones•
Many people forget to reduce water usage as temperatures cool, which will affect their ability to meet their water budgets
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Appeals process
•
Adjusts for appeals, as needed
•
Can appeal number in household, lot size, irrigable area, weather zone and special circumstances
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Sample tier structure for residential customers
Tier Range Rate multiplier1
(indoorneeds)
Up to 10 Ccf(indoor only) 90% Base Rate
2Up to 105% of
water budget Base Rate
3Up to 200% of
water budget 120%
4Up to 300% of
water budget 200%
5300% or more of
water budget 400%
* Ccf = 100 cubic feet of water
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How residential customers will be affected
Tier% of accountsin range (Jan.)
% of accountsin range (July)
1(indoorneeds) 42.93% 33.10%
2 17.77% 28.33%
3 26.03% 26.16%
4 8.03% 8.98%
5 5.25% 3.43%
13% of residential customers use 30% of water
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A real example•
8,354 square-foot corner lot
•
Desert landscaping in front and side yards, grass in back
•
Pool
•
Smart Controller
•
Two adults and a child living at home
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0
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140
Janu
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April
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tSep
tembe
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Octobe
r
Novem
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Decem
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Wat
er C
onsu
mpt
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Ccf
Water Budget Actual Consumption Indoor Needs Tier 2 Tier 3 Tier 4
Annual water cost before: $336.86
After: $326.89
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Real example #2•
9,630 square-foot corner lot
•
Grass in front and back yards
•
Pool
•
No Smart Controller
•
Two adults and a teenager living at home
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0
20
40
60
80
100
120
140
Janu
ary
Februa
ry
March
April
May June July
Augus
tSep
tembe
r
Octobe
rNove
mber
Decembe
rW
ater
Con
sum
ptio
n Cc
f
Water Budget Actual Consumption Indoor Needs Tier 2 Tier 3 Tier 4
Annual water cost before: $663.98
After: $704.83
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•
Smart Controller program•
On-site technical assistance
•
Brochures, web-site info, bill stuffers•
Lush & Efficient Landscape Gardening in the Coachella Valley
•
Landscape Workshop•
Appeals process
How will CVWD help residential customers meet
their water budget?
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•
Dedicated landscape meters (HOAs, cities, schools, some businesses)
–
Based on landscaped area
–
No indoor allocation
–
Appeals process
•
Other customer types (hotels/motels, restaurants, etc.) will be phased in
What about non-residential customers?
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Sample tier structure for dedicated landscape customers
Tier% of accountsin range (Jan.)
% of accountsin range (July)
1(indoor
needs)NA NA
2 46.62% 51%
3 18.34% 22.23%
4 11.49% 11.8%
5 23.55% 14.97%
Landscape customers account for 4% of domestic customers, but use 30% of domestic water
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A real exampleLarge public school
•
14 landscape meters
•
46 acres
•
52% irrigated
•
Meters/rate for indoor use stay the same
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0
5,000
10,000
15,000
20,000
25,000
30,000
Janu
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Februa
ry
March
April
May
June July
Augus
t
Septem
ber
Octobe
r
Novem
ber
Decem
ber
Water Budget Actual Consumption Tier 1 Tier 2 Tier 3
Annual water cost before: $71,025
After: $76,275
If stayed within budget: $62,565
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Real example #2Public parkway
•
1 landscape meter
•
2 acres
•
100% irrigated
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0
500
1,000
1,500
2,000
2,500
3,000
Janu
ary
Februa
ry
March
April
May
June July
Augus
tSep
tembe
r
Octobe
rNov
embe
rDec
embe
r
Water Budget Actual Consumption Tier 1 Tier 2 Tier 3
Annual water cost before: $20,251
After: $44,052
If stayed within budget: $3,491
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•
Large Landscape Smart Controller program
•
Individual water audits and analyses
•
Encourage customers to be more actively involved in landscaping company/staff’s decisions regarding watering and plant choice
•
Educational opportunities
•
Bill Stuffer, brochure, web-site
How will CVWD help landscape customers meet their
water budget?
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•
Tiered Rate Advisory Committee (TRAC)
•
Presentations to City Councils, community groups, HOAs, etc
•
Public workshops
•
Informational fliers distributed at public events
•
Bill stuffers and mock bills showing new rate
•
Press releases
Public outreach and education
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Questions?