PADRE DAM WATER RATES LIKELY RISING AGAIN

By Mike Allen

Photo: Dan Denham, CEO, San Diego County Water Authority

April 4, 2025 (Santee) -- There’s no doubt that customers of Padre Dam Water District, already paying among the highest rates in the nation, will pay even more for the coming year. It’s just a matter of how much.

At its April 2 meeting, PDWD’s board of directors heard from the San Diego County Water Authority General Manager Dan Denham about all the various reasons his agency will probably increase what it charges for the water it imports from the Metropolitan Water District of Southern California (Metro), the Los Angeles-based agency that transfers water south from both the Colorado River and the Sacramento-San Joaquin Delta.

In short, Denham told the local water board his hands are tied. When Metro raises its rate on the water it transports, then the CWA is forced to pass on those higher costs to its members. The CWA has 22-member water agencies, including Padre Dam.

Last year, Metro raised its rate by 14 percent, and CWA passed that cost on to all its members, all of which pushed back on CWA’s initial proposal of a 25 percent hike.

For the coming fiscal year, Denham said the CWA board hasn’t set the figure yet (some reports put it at 14 percent), but he expects the increase to be in “the double-digit range” and the following year to be in the single digits.

CWA’s vote on rates likely won’t occur until the summer, probably in August, so that will affect what Padre Dam’s board does. But once that number is known, the local agency will pass on the hike to its customers, just as it does with any increases from another entity it has no control over, San Diego Gas & Electric.

PDWD spokeswoman Melissa McChesney said the pass-through increase won’t likely be exactly what the CWA’s hike is because there are other factors causing the increase. For the most recent increase the average Padre Dam customer saw their bills go up by $12 to $16 monthly starting in February, she said.

Padre Dam gets 100 percent of its water from CWA. It has often stated its bills are comparatively higher than other water districts because of its size, 73 square miles, and having to pump water to parts of the district that are in higher elevations. It has about 23,000 customers.

Driving up the costs of water for CWA, Metro, and everyone in the state is the ongoing draught that many attribute to a climate change occurring on the planet. Denham showed the board a chart with annual rate increases on the member agencies was relatively small going back to 2014, and yet it nearly tripled last year.

He pointed out that San Diego County has a relatively abundant and stable water supply due to some $3 billion in water infrastructure investment. This included raising and improving the San Vincente Reservoir and building the Carlsbad Desalinization Plant. Those investments cost millions, which was financed by issuing bonds that have to paid off.

While these projects have provided a nice insurance policy in the face of the expected shortage of water coming from Northern California, the response from many residents has been to drastically reduce their water intake. That’s good but in terms of the finances for water districts it’s bad since the less water used, the less revenue there is. Hence these agencies are all raising their rates to balance their budgets.

And in the coming years, this region will be using even less due to water reclamation projects such as the Advanced Water Purification project Padre Dam is building, and a much larger one by the city of San Diego called Pure Water.

Complicating an already complex issue of sharing water in a desert region  is the bad blood that apparently still permeates the relationship between CWA and Metro. Denham said litigation against the much larger Metro has lasted about 15 years, and has impeded the ability to find mutually beneficial solutions.

“It put us in a box,” he said. “When you’re suing your wholesaler, you create problems.”

Denham said within the next 30 to 60 days he’s expecting a settlement in the legal battle “that helps us move forward in a more productive way.”

That should help, but things are still looking dicey, Denham said, as far as what the CWA can do to keep rates manageable. “We’re starting to run out  of levers we can pull,” he said.

Padre Dam Director Suzanne Till told Denham she was glad to see him acknowledge the CWA’s mistaken forecasts about water use and rate charges. She wanted to know whether the CWA could get out of an exorbitant contract struck in the late 1990s to create the Carlsbad Desalinization Plant. By one metric, CWA pays nearly double for desalinated water compared to importing it.

“Things have dramatically changed since (the contract was signed), and we have to figure out a way to address this….I’m still interested in getting out of this, selling it, getting out of this somehow.”

Till was also concerned about how CWA was dealing with the problem of losing two water districts, Rainbow and Riverside, which left the coalition last year because of the ever-escalating rates.

She also said the CWA should do a much better job in terms of communicating with the public about its current condition and making it more clear why rate hikes are necessary.