Water Rate Vote Set For Today

By Harry Saltzgaver
Executive Editor

Increases in residential water rates are expected to be approved today (Thursday) by the Long Beach Water Commission with no immediate change in the way commercial and industrial costumers are charged.

Commercial and industrial accounts also will see a rate hike because those rates are based on the residential rate formula. However, the commercial customers pay the same rate no matter how much water is used.

Residential customers’ rates per gallon increase as use increases on a three-tiered formula. On July 14, the Water Commission postponed approving the fiscal 2009 rates for two weeks to see whether commercial and industrial rates should be on a tiered schedule as well.

At a study session Monday, Anatole Falagan, deputy general manager for business operations, told the commission that a tiered system for commercial and industrial customers would do little to conserve water. He said businesses seldom have enough flexibility in water uses to make a major difference, even if the price goes up.

Long Beach’s Water Department serves about 7,650 commercial accounts, and non-residential use accounts for about 28% of potable water sales. Of those 7,650 non-residential accounts, only 71 (less than 1%) use more than 1,000 Billing Units (748 gallons of water per unit). That number drops to 25 accounts at 2,500 BU, and 14 at 5,000 BU.

Falagan explained a series of approaches used to bill commercial and industrial accounts on a graduated basis, including the cities of El Paso, San Antonio, Irvine Ranch and Los Angeles. All started by figuring an average, or base, use, then charged higher rates when use exceeded the base.

While the tiered rates showed little impact on water use, they did increase revenue. But state law (Proposition 218) now requires that any rate increase be shown to be the actual cost of providing that service, according to Charlie Parkin, deputy city attorney. Further, the city’s current utility billing system could not handle the complexities of a tiered system set through base uses.

Curtis Tani, director of Technical Services for the city, told the commission that a new billing system had been authorized, but would take until 2011 to put in place. Water Department General Manager Kevin Wattier suggested that a complete cost of service analysis including business accounts could be done while the new billing system installation is in process. The last full rate survey was done in 1996, with increases since that time being applied proportionately.

“It’s fine to take that approach, but I’m hearing that this system can’t be in place until May of 2011,” said Commissioner John D.S. Allen. “We’re in a drought now. What are we doing now?”

Falagan responded that the department is meeting with business customers, conducting use analyses and stressing conservation in general. He noted again that the price of water is going up for commercial as well as residential uses.

Commissioner Steve Conley said he wanted to aggressively pursue use of reclaimed water by the city’s three largest customers — the Port of Long Beach, the AES power plant and the Haynes power plant operated by the Los Angeles Department of Water and Power.

Wattier said that negotiations had begun with the port to take over its water system, and those negotiations would include the cost of running a reclaimed water line to complex. Conley said the single biggest use of water at the port was for ballast in foreign ships, and he wanted that use to be reclaimed, not potable, water.

Wattier said there also were indications that the LADWP and AES plants may be seeking more fresh water soon, and that also would involve talks of paying for a new reclaimed water line. He warned that the supply of reclaimed water also is limited, particularly in the summer when the city and other customers use more reclaimed water to irrigate landscaping.

“I think we need to go after it,” Conley said. “We need to define a tiered system so it includes that (use of reclaimed water), and I don’t think we can wait three years for that.”

If the commission accepts the staff recommendation on rates today, the increase would average 15.8%. Once the rates are approved, people can protest them in writing or testify at a Prop. 18 hearing, now scheduled for 7 p.m. Sept. 18 (postponed from Aug. 28) at the Groundwater Treatment Plant, 2950 Redondo Ave.

The rates, or the revenue they will generate, is part of the budget already approved by the Water Commission and before the City Council next month. The council will have to approve the budget pending final rate approval at the Sept. 18 hearing.

For more information, go to www.lbwater.org.

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