Water & Drought

California Supreme Court won’t budge on water rates

In a setback to California water regulators’ conservation efforts, the state Supreme Court has kept intact a ruling that makes it harder for municipalities to impose tiered pricing to discourage heavy water use.

The state’s high court upheld a closely watched ruling involving the Orange County city of San Juan Capistrano, rejecting pleas from California water regulators. Gov. Jerry Brown, who has ordered a 25 percent cutback in urban water use, had said the ruling represents a potential “straitjacket” for regulators.

In April, the 4th District Court of Appeal struck down a water-pricing system used by San Juan Capistrano that charged customers considerably more per-gallon for heavier water use. The court said the structure violated Proposition 218, a 1996 statewide ballot measure that said municipalities can’t charge fees that exceed the cost of providing a service.

What was particularly alarming to state officials was that the Court of Appeal “published” its decision, extending its impact to the whole state.

While San Juan Capistrano officials have agreed to make refunds to customers, state officials took the fight to the Supreme Court, asking the court in June to “depublish” the ruling so it wouldn’t have statewide effect.

The ruling “may interfere with the state’s response to the ongoing drought,” said Attorney General Kamala Harris’ office, appearing on behalf of the State Water Resources Control Board, in a written plea to the Supreme Court. The ruling’s “gratuitous conclusions about tiered-rate structures and penalties for excessive water use are likely to cause confusion and may frustrate ongoing efforts to promote water conservation.”

The Supreme Court, acting without comment Wednesday, refused to “depublish” the ruling.

The state water board now says it believes it can live with the ruling. “The decision does not foreclose conservation pricing,” board spokesman Tim Moran said in a written statement.

The appellate court didn’t reject tiered pricing altogether. It said municipalities have to tie their rates to cost to make them comply with Proposition 218. Nonetheless, municipal officials said they were disappointed.

“We know from our own research that the public supports local agencies using tiered water rates to encourage water conservation,” said Chris McKenzie, executive director of the League of California Cities, in an email. “The appellate court’s decision and Prop. 218 regrettably undermine this important goal and put the public health and welfare at risk.”

The ruling has already had an effect on some water agencies. The city of Roseville held off on a proposed rate increase, and is continuing to study the situation. “It’s too early to tell at this point where we are headed,” said city spokesman Maurice Chaney in an email.

Sacramento Suburban Water District said it thinks its tiered pricing complies with the court ruling.

“There is justification for tiered rates in general,” said Rob Roscoe, general manager of Sacramento Suburban, which serves parts of northeastern Sacramento County. “You’ve got to tie it back to your cost of service.”

The district has two tiers for residential water use. Those in the second tier pay 25 percent more for every additional gallon of water they use.

Roscoe said Sacramento Suburban’s consultant is reviewing the district’s rate structure in light of the San Juan Capistrano case, but he believes it won’t need revision.

Dale Kasler: 916-321-1066, @dakasler

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