Water, sewer and pumping rates for bills mailed on and after July 1, 2023 include cost increases from the San Diego County Water Authority (CWA), City of San Diego Metro Wastewater System (Metro) and San Diego Gas & Electric (SDG&E). All 2023 rates increases are pass-through increases from our wholesale service providers. It is necessary to pass-through these costs to ensure there are sufficient revenues to provide services to District customers, maintain the safety and reliability of infrastructure, and avoid deficits. All three external providers raised their rates in 2023 - 100% of the pass-through increases will be used to pay these higher rates. None of the revenue from rate increases will be used for Padre Dam internal costs.
In fact, the Board adopted internal water and sewer rates for five years (Fiscal Year 2023 – Fiscal Year 2027) that provide a 0 percent increase in District revenue and a 0 percent increase to our typical residential customer. This was in response to the District’s overarching goal when developing the FY 2023 – 2027 Strategic Business Plan and Budget to manage costs in order to minimize the financial impact to our customers while maintaining high service levels, ongoing maintenance, and necessary capital investments. However, external service provider costs are not under the control of the District.
Padre Dam receives wholesale services from CWA, Metro and SDG&E. CWA sells drinking water to the District and SDG&E provides electricity to pump water to higher elevations within District boundaries. The District receives wastewater treatment and disposal services Metro.
On July 13, 2022, the Board authorized the District to pass-through increases in wholesale water rates and charges, sewer transportation and treatment costs, water pumping energy rates for Fiscal Year 2023 through 2027. This pass-through authorization ensures there are sufficient revenues to provide services to its customers, maintain the safety and reliability of infrastructure, and avoid deficits and depletion of reserves.
New pass-through rates will be effective with bills mailed on or after July 1, 2023. Customer’s bills will be impacted by the following:
- CWA pass-through rates for wholesale water services to water customers
- Metro pass-through rates for sewer transportation and treatment services for sewer customers
- SDG&E pass-through rates for electricity pumping service to District customers
Water Rate Increase
CWA increased the cost of wholesale water services for calendar year 2023. Padre Dam purchases 100 percent of its water from CWA and therefore the District is subject to this increase. Padre Dam was able to defer the impact of CWA’s January increase for six months (until July 1, 2023) by using a portion of rebates received from CWA. The rebates are the result of decade-long rate case litigation where CWA ultimately won several critical issues in the litigation. Padre Dam received a total rebate of $2.3M. In 2022, $608K of rebated funds were used to offset 50 percent of the rate increase imposed by CWA. In 2023, $712K of rebated funds were used to delay CWA’s January 2023 rate increase by 6 months. The remaining $968K will be used to offset future CWA rates increases. The pass-through increase from CWA only impacts water rates and 100 percent of the revenue from the rate increase will be used to pay CWA.
Sewer Rate Increase
Metro has increased its fiscal year 2024 cost of providing transportation and wastewater treatment services. The increase to Padre Dam was significant. However, the District was able to delay the full impact of the rate increase by using $1M from a rebate it received from Metro. The pass-through increase from Metro only impacts the treatment and disposal portion of the District’s sewer rates and 100 percent of the revenue from this rate increase will be used to pay Metro.
Pumping Rate Increase
SDG&E has increased its utility rates in 2023. The District's service area has six different elevation zones and incurs incremental energy costs to pump water to each successively higher elevation. Customers who live in these higher elevations are charged a pumping charge, which is largely based on the energy costs incurred by the District to deliver water. Although SDG&E rates increased by more than 20 percent, Padre Dam’s policy does not allow annual pass through adjustments for energy to exceed 20 percent. Therefore the pumping increase will be limited to 20 percent and will not fully cover the pumping increase that Padre Dam will be required to pay SDG&E. Padre Dam also delayed the implementation of the SDG&E pass-through for six months (until July 1, 2023) to coincide with the pass-through of CWA and Metro increases. The pass-through increase from SDG&E only impacts pumping charges and 100 percent of the rate increase for pumping will be used to pay SDG&E.
Water and pumping rates effective with bills mailed on or after July 1, 2023
Sewer rates effective with bills mailed on or after July 1, 2023