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News Updates

Rate Changes Proposed

The Carlsbad Municipal Water District is proposing changes in water rates and the way they are calculated, based on a recent study showing the actual cost to provide water service. If approved, the changed would result in an increase of about $5 a month for a typical Carlsbad household, and the district’s rates would remain below the average for the region. 

At a Glance

  • Water rates are proposed to increase by about $5 a month for the average Carlsbad Municipal Water District household.
  • The increase only would apply to customers of the Carlsbad Municipal Water District. Southern parts of Carlsbad are served by the Vallecitos Water District and the Olivenhain Municipal Water District.
  • The increase is needed to cover the increased cost of providing water service, ongoing increases in the cost to purchase imported water and the cost of water from the newly competed water desalination plant. 

On Tuesday, Oct. 4, the Carlsbad Municipal Water District scheduled a public hearing for Nov. 29, at 6 p.m., 1200 Carlsbad Village Drive, to discuss proposed changes to water and recycled water rates. 

Rates are determined by the actual cost to provide water service. The water district just completed its most recent “Cost of Service Study,” and staff is recommending the changes based on its findings. Wastewater rates were included in the last study, but no changes are needed to those rates at this time. 

Water customers have until Nov. 29 to submit a protest letter opposing the rates. If less than a majority of customers protest the rate changes in writing, the board will approve the changes. The written protest must contain the address of service and the rate change being protested and be received prior to the close of the public hearing. Customers may appear and speak at the hearing, but only written protests are counted for the purpose of determining whether there has been a majority protest.

Carlsbad City Council members also serve as directors for the Carlsbad Municipal Water District. The water district is a subsidiary district of the City of Carlsbad and serves about 85 percent of the city. The other 15 percent, in the south, is served by either the Vallecitos Water District or the Olivenhain Municipal Water District. 

Fixed Rate

Water rates have two parts, a fixed rate that stays the same regardless of how much water you use, and a rate per “unit” of water used. A unit is 748 gallons. Currently, 27 percent of the water district’s revenue comes from the fixed rate, and 73 percent comes from the rates that are based on usage. District staff propose changing those allocations to 30 percent and 70 percent, which is within the industry standard and will better reflect how costs are incurred. 

The fixed part of the water rate is proposed to increase by 9 percent, an increase of $1.92 a month. 

Rate Based on Usage

The rate per unit of water used is proposed to increase an average of 4.85 percent in 2017 and 2018. For a typical household, this would result in a total monthly increase about $5, when you include the increase to the fixed cost too. Water rates will continue to be billed in tiers. The first 10 units of water used in a month are billed at the lowest rate and, if use increases beyond that amount, the cost per unit goes up. 

Reasons for the Increase

  • The cost of imported water, which still makes up more than 80 percent of Carlsbad’s drinking water supply, continues to increase due to legal and environmental restrictions on water from Northern California and the Colorado River. This growing cost accounts for about two-thirds of the proposed rate increase.
  • When customers purchase less water, the cost per customer to provide water usually needs to go up so that water agencies can continue to operate and maintain the water delivery system. The latest cost of service study found this to be true for the Carlsbad Municipal Water District. The good news for those who have conserved is that they are more likely to stay in the lowest tier of rates.
  • The Water Desalination Project is now online and delivering water. This water is more expensive than the current cost of imported water, but it is a drought proof supply. Since the cost of imported water is likely to continue to increase, it will eventually meet and exceed the cost of desalinated water.
  • The cost to maintain the water system makes up a small part of the increase. The district invests in routine maintenance and new technologies to help ensure the system is as efficient and reliable as possible. This ends up saving money in the long run.

During recent mandatory water use restrictions, Carlsbad Municipal Water District customers reduced their water use by about 23 percent compared to 2013. District staff don’t expect water use to return to those earlier levels anytime soon, even though the restrictions have eased. That’s because many people have made permanent changes to reduce water, like swapping out landscaping with low water use pants and retrofitting their homes with low water use fixtures and appliances. 

The city has also expanded the availability of recycled water. Large water users converting to recycled water causes the overall amount of drinking water use to decrease significantly.  

Recycled Water

Recycled water rates are proposed to increase by 4 percent in 2017 and 2018. This is due to regional rebates being phased out and the cost of expanding the recycled water system. Carlsbad is finishing up a project to nearly double the size of its recycled water treatment plant and recently added 10 miles of distribution pipeline, with more in the works. Carlsbad is among the region’s largest users of recycled water, which is wastewater that has been treated to a level suitable for irrigation and other non-drinking purposes. 

For More Information

Read the staff report, item #6

See the public hearing announcement and instructions for protesting the increase

Get water conservation tips

Contact Finance Manager Aaron Beanan, 760-602-2414 or aaron.beanan@carlsbadca.gov

October 7, 2016