Rate Structure and Fees

Water is a limited resource and its costs increase with higher rates of consumption. Therefore, the City adopted an increasing block rate structure where the unit price of water rises with increasing increments of water use. It has been in existence since the drought of 1989. The rate structure was designed to encourage conservation and pass on the costs of higher water use. Each water unit is equivalent to a hundred cubic feet (Ccf or 748 gallons) of water.

For residential customers, the city uses a five-block rate structure. The first block (lifeline) applies the lowest rate for water usage up to 10 Ccf for a two-month period (equivalent to 123 gallons per day per house). The next 11 to 75 Ccf of water are charged at the highest rate for the units used. See Current Utility Rates. Multiple-family accounts are included in the residential rate structure. When a site has more than 9 dwelling units, it is given a discount on its monthly service charge to reflect lower water demands. In addition, because multiple-family accounts often have one meter, the City prorates the block water use thresholds for each site based on number of dwelling units.

The non-residential classes, including commercial, municipal, and other customers (e.g., Cañada College) are charged a monthly service fee based on the meter size. In addition, the quantity charge is based on a three-block rate structure, 0-15 Ccf, 0-75 Ccf and +75Ccf. There is a modest differential between these block rates to reflect the fact that non-residential customers are much more heterogeneous regarding how they use water and their associated volumes. Just because a non-residential customer uses a lot of water, does not necessarily mean they use water inefficiently. Hence, a large rate differential is not warranted or used.

For new developments, the City charges a water facilities fee to recover investments made by existing water customers in the water distribution system to accommodate new growth. This fee ensures that new developments pay their own way. This fee will be updated annually to account for cost inflation.