The next crisis for California will be the affordability of water
The price of almost everything is on the rise, but we tend to shrug off inflation in goods and services we can cut back or do without. Not water, the rising cost of which is looming as a defining economic problem in coming years.
In California and across the nation, concern about water affordability has been spreading, with good reason. Few basic commodities are under as much cost pressure.
“The water infrastructure is aging, there’s more water contamination and our standards for cleanliness keep rising, and climate change is making our supplies less reliable,” says Laura Feinstein of the Pacific Institute, an Oakland-based environmental think tank. “At some point the bill comes due” — but because water demand is stable or even dropping, water agencies can find revenue to cover the bill only by raising rates on consumption.
The result is an inexorable rise in water rates. Rates in Los Angeles rose by as much as 71% from 2010 to 2017, according to a survey by Circle of Blue, a water news website. In San Francisco the increase was as much as 127%, and 119% even for the stingiest users, a group that presumably includes many low-income residents.
Outside California, some municipalities are taking aggressive steps to bring down the cost of water for low-income residents. Philadelphia initiated the nation’s first income-based water rate on July 1. Under the program, a household earning less than 50% of the federal poverty line, or $12,300 for a family of four, will pay no more than 2% of their monthly income in water, sewer and stormwater charges. The rate rises with income; a household earning between 100% and 150% of the poverty level will pay no more than 3% of income for those services.
In Atlanta, which is facing an enormous bill for infrastructure construction and maintenance, voters last year approved a four-year extension of a 1% sales tax to cover the cost, so it could be spread beyond water ratepayers alone.
Finding ways to ensure affordability is an especially acute problem in California, where water service is provided by a patchwork of more than 3,000 city, county, mutual and private agencies, some of which are too small to shoulder the burden of lifeline rates for their poorest customers. Their options are limited by Proposition 218 of 1996, which forbids charging more to higher-income municipal customers to fund rebates or subsidies for poorer residents.
Complicating the issue is that water rates are generally set locally. Proposition 218 requires that they have some relation to the cost of providing the water in the case of public agencies like the Los Angeles Department of Water and Power; the Public Utilities Commission oversees rates only for nine private water companies, which cover about 15% of the state’s residents.