Tuesday, April 30, 2024

Editorial: Even with tax and rate hikes, SoCal water is still pretty cheap Los Angeles Times

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This is a fairer structure because it shares the burden between renters and property owners. The Metropolitan Water District, which delivers imported water to Southern California, is raising rates and property taxes to cover rising costs. Southern California’s water rates and taxes are byproducts of the 20th century, an era with vastly different climate and economic conditions from today. When the Met was created in the 1920s to bring Colorado River water to Los Angeles, Orange and four other counties, California was abnormally wet, although no one knew it at the time. They still didn’t know it decades later, when the State Water Project was built to ship Northern California water south. If these costs are not covered, Met will have to import more water from elsewhere, at even higher costs, or tap ever-scarcer (and therefore more expensive) water from existing sources.

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You can read more about the board’s mission and its members at About The Times Editorial Board. Should water users be happy about these increases? The answer is a counterintuitive “yes.” Costs would be higher and water scarcer in the future without modest hikes now. An unusually wet winter and federal largesse helped create a short-term Colorado River accord and gave California time to prepare for the hammer drop in 2026.

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Beverly Hills and other cities that get almost all their water from Met will be affected right away. Even with periodic wet winters, the customer base has stabilized, while the supply has become less predictable. Climate change and severe multiyear droughts make matters worse. We need to build new facilities to capture stormwater and recycle wastewater. Simultaneously, the old pumps, pipes, transformers and other equipment are aging and need to be replaced.

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These capital projects represent fixed costs that don’t diminish as water use and revenue decline. Over the decades, Southern California’s residents may have come to think of cheap water as a birthright. But it will take additional investments to keep the water flowing. Even with higher costs passed down to consumers, water in this increasingly arid region remains a bargain. Under a budget adopted April 6 by the Met’s board, both taxes and rates will go up next year.

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The remaining decision was how to divide up the increase between rates and property taxes. Met board members from the city of Los Angeles opposed the formula on the grounds that higher property taxes will increase housing costs. But housing simply won’t be sustainable for renters if water costs are piled onto rates.

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California’s rising power rates are an obstacle to climate action. Regulators need to modernize the way utilities bill their customers to encourage electrification. And for all that trouble, your water supplier raises your rates. Because everyone is using so much less that the agency is losing money.

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That’s the dynamic in play with Southern California’s massive wholesaler, the Metropolitan Water District, despite full reservoirs after two of history’s wettest winters. The Met, as it is known, acquires and stores water to sell to 12 districts and 14 cities that serve about 19 million people in Southern California. To save water, you rip out your lawn, shorten your shower time, collect rainwater for the flowers and stop washing the car. The Los Angeles Times’ editorial board determines the positions of The Times as an institution.

The choice is whether whatever higher rates and taxes we pay will cover a consistently reliable supply or an increasingly sporadic and unpredictable supply. The rates charged to water agencies and cities will rise by 8.5% in 2025 and another 8.5% in 2026. Ratepayers in cities such as Los Angeles that have their own water supplies may not notice, because they will need relatively little Met water after the wet winter. Compton and other cities that buy no Met water won’t be affected by the rate increase.

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