The Santa Clarita Valley Water Agency approved Tuesday new water rates that will increase annually over the next five years starting this July.
Gary Martin, president of the SCV Water Board, said the agency has been working for a long time to consolidate the finances of the former Santa Clarita, Valencia and Newhall water districts, which now comprise the three divisions of the SCV Water Agency.
“Our recovery of operation cost is important to all of us because without that we’re not able to provide the level of service that I believe we need here in Santa Clara Valley,” said Martin in an interview with The Signal.
Starting July 1, all agency customers will pay $2.09 per 748 gallons, or one billing unit, of water used in variable charges, meaning their bill will depend on the amount of water they use.
The typical SCV Water customer uses 15 billing units per month, according to the agency. A ratepayer calculator on SCV Water’s website estimates the typical customer with a three-quarter-inch meter in the Newhall Division will pay $49.73 per month, or nearly $10 less than they do under current rates.
In the Santa Clarita Division, the agency estimates a $59.93 monthly bill for the typical ratepayer – 20 cents less than their current monthly bill.
In Valencia, the typical customer’s monthly bill will be $56.23, nearly $4 more.
In addition to the rate changes, the Santa Clarita and Valencia division customers will have to pay fixed charges to address legacy debt.
“There was a stipulation that legacy debt that was carried by the retailer prior to the merger would be repaid by the ratepayers of those (retailers) and not shared amongst all the former retailers,” Martin said, referencing the state legislation authored by Sen. Scott Wilk, R-Santa Clarita, that unified the local water districts into one agency in 2018, replacing the Castaic Lake Water Agency and the Newhall County Water District.
Martin said the rate changes taking effect next month won’t result in any revenue increases for the agency, though the staff agenda report noted that rate increases over the four years after the next fiscal year will raise “an additional 6.5% of revenue each year.”
“Customer impact will vary depending on water use, as 71% of agency revenue will come from the variable charges. The more water a customer uses, the higher their bill will be,” the agenda report said.
Lynne Plambeck was one of four members of the board of directors who voted against the new water rates Tuesday.
“When they did the merger, there was supposed to be a lot of efficiency savings and I’m not convinced that all that is happening to the extent that we would need to raise rates,” she told The Signal. “I just wish that we would look for more efficiencies before we start to raise rates.”
Plambeck said the rate increase would be the most difficult for Valencia Division ratepayers, which had access to “lifeline rates” for low-income households before merging into the SCV Water Agency.
“I do worry about the folks in Valencia Water Co. that had lifeline rates before they disappeared, and now their water rates are going to be even higher,” Plambeck said.
The economic impacts of the COVID-19 pandemic also make this moment “bad timing” for rate increases, she said, noting that the agency could have waited another year before changing rates.
