South Bay water cost to drop (and then rise)

Public attendance at a Thursday evening (February 9) hearing to introduce water rates for Imperial Beach, Coronado, and southwest San Diego for the next three years was so sparse that the public was easily outnumbered by California American Water (Cal Am) and California Public Utilities Commission staff.

Despite the low turnout (less than a dozen people), a battle over where to place a water-recycling plant — in Coronado or Imperial Beach — appears to be heating up behind the stiff formality of the proceedings.

Cal Am asked the utilities regulator for permission to raise rates and a slew of other permissions in a 28-page filing in July 2016. February 9’s public hearing was the fifth — as required by the utilities commission.

After a Cal Am water official explained how residential water rates will first go a bit lower and then will increase for the following two years, and the five people who wanted to comment did, the meeting ended less than an hour after it began.

"This is the only hearing in San Diego County," utilities commission administrative law judge Anthony Colbert said. "We do want to hear your comments."

Cal Am buys water from the City of San Diego and pumps it to customers in Imperial Beach, Coronado, and south San Diego, west of the Otay Water District boundaries. San Diego, as a wholesaler, buys water from the San Diego County Water Authority, which buys it from the Metropolitan Water District. Its South County customers are buying water that is entirely imported either from Northern California or through the Arizona water corridor. The utilities commission regulates water agencies throughout the state and lets them set the yearly rates every three years.

On Thursday, customers learned that they will be going on an unusual ride: in 2018, water rates will decrease 2.7 percent; in 2019, they will rise 4.2 percent; and in 2020 they will increase by 3.6 percent, according to Cal Am director of external affairs Brian Barreto.

"It works out to an average increase for residential customers of $3.21 a month over three years," Barreto said. "About 10 cents a day." Colbert was the first to wonder why rates would go down for a year and then increase. "Because we wanted to consolidate prices and we want the price to be the same at tier rates for all our SoCal customers," Barreto explained. "The average customer in San Diego uses significantly less water than the Southern California average."

Barreto’s statement seemed to support the idea that south San Diego County residents are being charged more than other Cal Am customers, one speaker noted. According to PUC filings, Cal Am is trying to persuade the commission to allow the company to consolidate three regions — in Ventura, Los Angeles, and San Diego counties — into a single service area with identical rates across the area.

Thousand Oaks, in Ventura County, is staring down a residential water-rate increase of 24 percent over the three-year term, and has already filed a motion to oppose the consolidation plan.

Likewise, Coronado has filed a motion indicating it opposes the rate increase, but the city's motion focuses on Cal Am's proposal for a recycled-water project that will recycle Imperial Beach’s wastewater and pump it to Coronado for irrigation.

The proposed plant would be built in I.B. But Coronado has been planning a recycled-water project that would use Coronado sewage to irrigate Coronado and Navy turf, according to Coronado's filings.

"Coronado's project would avoid costs associated with sending Coronado wastewater to San Diego for treatment," according to the city's filing. “By contrast, Cal Am's proposed project would not tend to benefit Coronado's sewer ratepayers, despite the City being the largest customer for recycled water.”

For nearly a year, Coronado and I.B. have been fighting over who will get the sewage from the U.S. Navy's Special Warfare Command Coastal Campus under construction now. The $700 million project will bring several thousand Navy SEALs, Special Warfare officers, and command and support staff to the Silver Strand training complex.

Pointing to a 1967 agreement drafted on a typewriter where the Navy and Imperial Beach agree that I.B. will treat the sewage from the five or six houses at the south end of the Strand, I.B. and the Navy agreed that I.B. should handle up to 200,000 gallons per day generated by the new campus. Coronado objected, pointing out that the campus is entirely within Coronado city limits and said it should get the sewage. Both cities and a local agency are now suing and countersuing, and the fight has moved to federal court.

The Cal Am application's revelation of Imperial Beach and Coronado plans for the two competing sewage-recycling plants provides the first rational explanation of why the cities are suing over Navy sewage.