CWA OKs rates for ag customers opting out of discount program

San Diego County Water Authority set transitional Special Agricultural Water Rates (SAWR) for customers who opt out of the Metropolitan Water District of Southern California’s Interim Agricultural Water Program.

The Dec. 18 action sets Calendar Year 2009 transitional SAWR at $412 per acre-foot for untreated water and $580 per acre-foot for treated water.  The total costs, including customer service and transportation charges, will average $503 per acre-foot for untreated water and $671 per acre-foot for treated water.

“This was just kind of turning up loose ends and finally adopting the rates,” said Dana Friehauf, the water authority’s principal water resources specialist.

Metropolitan Water District of Southern California (MWD) has had an agricultural water program since 1958. In November 1990, the district adopted the Incremental Interruption and Conservation Program, and the agricultural program was incorporated into the IICP in 1991.  

MWD started the Interim Agricultural Water Program (IAWP) in 1994.  

The 12 participating MWD agencies have a maximum annual cap of 155,190 acre-feet, although agencies can use less than their allocation. San Diego County Water Authority (CWA) was allocated 100,459 acre-feet.  During Fiscal Year 2005-06, the 17 participating CWA agencies utilized 84,993 acre feet of IAWP supplies. Ramona Municipal Water District, a CWA member, has agricultural customers participating in the program.

On Oct.14 the MWD board approved changes to IAWP that will phase out the IAWP over a four-year period.  The IAWP provides surplus MWD water to agricultural customers at a discounted rate, with the condition that IAWP customers will be the first to receive cuts prior to implementing any mandatory reductions to other customers during a drought. An agricultural property may choose to pay the municipal and industrial (M&I) rate and not be subject to the IAWP cuts, although, when MWD adopted a 30 percent reduction program at the beginning of 2008, a participant obligation cutoff date of Dec. 31, 2006, was stipulated.  The phase-out of the IAWP program allows for customers to opt out, and be subject to municipal and industrial (M&I) rates, at the beginning of any calendar year during the four-year transition period.

Because IAWP customers will be cut back in a drought, they are not subject to certain CWA storage costs or supplemental supply costs.  The CWA’s Special Agricultural Water Rates program exempts SAWR customers from the melded supply and treatment charges from Imperial County water and from the CWA member agency’s proportional share of the fixed storage charge.

“The rate reflects that.  They’re paying for Met water.  They’re not paying for the water authority supplies,” Friehauf said.

On Oct. 23, the CWA board approved a two-year transitional program for customers opting out of the IAWP program that would provide the same discounts from storage and supply costs as continuing IAWP customers.  Customers choosing to participate in the transitional program are subject to the same allocation of water from the Emergency Storage Project and the future Carryover Storage Project as continuing IAWP customers and they are also subject to MWD regional cutbacks if CWA supplies are cut.  

The Oct. 23 board action also formed a workgroup that will return to the board by the end of Calendar Year 2009 with options for programs beyond the transitional period.

The transitional program is only available to customers who had been in the IAWP and have opted out.  Customers may remain in the IAWP throughout the phase-out period and be eligible for all CWA discounts.  

Customers who remain in the IAWP will continue to receive the IAWP discount but will also be subject to higher cutback amounts than M&I customers if a continued drought leads to further cutbacks.  

“If you don’t want to have greater cuts in the future, you opt out,” Friehauf said. “If you stay in IAWP, you get the cheap water, but you could experience even more severe cutbacks.”

During Calendar Year 2009, member agencies will pay M&I supply rates of $463 per acre-foot for untreated water and $631 per acre-foot for treated water.  The member agencies will also pay $64 per acre-foot in transportation costs to recover capital, operating, and maintenance costs of the CWA’s aqueduct system.

The CWA’s Customer Service Charge covers costs that support the operations of the CWA and is allocated among member agencies based on a three-year rolling average of all deliveries. That charge is assessed to both M&I and IAWP customers and the CWA-wide average is $27 per acre-foot.  

The storage charge recovers costs related to emergency storage programs and is also allocated based on a pro-rata share of deliveries. The average is $44 per acre-foot.  

The full M&I rates average $598 per acre-foot for untreated water and $766 per acre-foot for treated water, and CWA member agencies pass along their costs to customers.

The IAWP total rates average $413 per acre-foot for untreated water and $556 for treated water.  The IAWP supply rates per acre-foot are $322 for untreated water and $490 for treated water.

An acre-foot of water is 324,851 gallons, enough to serve the annual needs of two typical California families.

“We’ve got options for the farmers and it’s really their decision,” Friehauf said.  “We’re giving them options on how to move forward.”

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