The California Drought: Selected Social Justice Issues by Gary Kremen

South San Francisco, CA   April 9, 2015              Rebroadcast from The Left Hook Politics With a Punch

Fairly priced clean water is considered to be a basic human right. Given all Californians are in a severe and historic drought, we must ask: What can be done to minimize the effects on the disadvantaged?

For years, residential water rates have been rising as quickly as electric or gas rates.  With the current drought, rates are rising even more rapidly to due to conservation and the cost of new, more expensive water supplies. Higher prices disproportionately affect lower income residents who don’t have the same ability to pay for these increases.  Water managers and elected officials should be sensitive to these vulnerable populations.

To understand some of the more acute social justice issues associated with the drought, it is important to understand how water prices are set. Approximately 80% of water retailers in California are municipalities like the City of Gilroy. The balance are investor owned utilities (IOUs) such as the San Jose Water Company.  Municipalities’ water prices are set by elected leaders and involve public hearings. Public Utility Commissions (PUCs) set the water prices for IOUs.

Pricing for water, like other utilities, can be flat, uniform or tiered. In flat pricing, a customer pays one price no matter how much water is used. This structure is largely fading away and being replaced by uniform pricing, for which utilities charge the same for every gallon, no matter how much is used. Finally, with tiered pricing, the more gallons the customer uses, the more he/she pays, rising when a certain volume, or tier, is reached.  For example, the first 2,000 gallons of water used per month can be at a lower rate (the first tier) than the second 2,000 gallons (the second tier). There can be multiple tiers. While most water retailers use tiered pricing, there are a small number of water retailers, like the City of Santa Clara, which shamefully do not have even basic residential rate tiered pricing.

At what level tier starts and stops can also be adjusted for the number of people in a household with per-capita pricing.  For example, a four-person household could have its first tier set at 8,000 gallons per month, whereas a one-person household first tier could be set at 2,000 gallons per month. Per capita based billing combined with tiered pricing creates the best elements of conservation rates while accommodating households with high occupancy such as large families living together.  It also enables suppliers to generate revenue from water wasters to pay for additional conservation actions, creating a virtuous cycle.

The fairest pricing approach for disadvantaged populations is to set the first tier as the amount of water required to meet basic human indoor needs for all the household occupants. The price of that water would then be set at an amount to cover the water retailer’s costs (water costs from the water wholesaler, transmission costs, distribution costs, etc.) but not to allow the water retailer to make a profit or create a reserve based on those customers. I call this Lifeline water pricing.  This can be further coupled with innovative programs such as San Jose Water Company’s Water Rate Assistance Program (WRAP) that give qualified low-income consumers a 15% discount on prices.

Pricing is not the only social justice issue in a drought.  Many current rebate programs have inherent systemic inequity. For example, more funds are allocated to area-based turf grass replacement than household indoor water saving devices. By disproportionately funding turfgrass reduction programs based on the number of feet of grass removed, it favors the affluent with large lawns (who also use the most water) over those with lower income who use most water indoors for basic needs.  Rebate programs should first favor those eligible for SSI, Medicaid/Cal, LIHEAP, TANF, NLS, WIC, SNAP or other auditable income-based programs. Additional effort should be spent educating low-income households on water saving techniques. As a shining example, Governor Brown, in his Executive Order of last week, required that turf replacement be focused first on disadvantaged communities.

Another social justice issue is that of water supply in general. Low-income communities such as Porterville or Cantua Creek are actually running out of groundwater and good quality water for basic human needs.  East Palo Alto’s growth is constrained by a lack of a sustainable water supply.  Neighboring affluent communities with better political access do not suffer. Porterville’s taps have been literally running dry for the past 10 months; The City trucks water once each week to its customers. We can do better.

We should be diligent in enacting drought regulations that take into account social justice. This could include state regulations that mandate a combination of tiered rates and per-capita based water budgets – Lifeline water pricing.  Outreach could be performed before turning off water for lack of payment.  Disadvantaged communities without their fair share of water access should be given first priority on drought relief.

Gary Kremen is Chairperson of the Santa Clara Valley Water District. The opinions are his own and not necessarily those of the Santa Clara Valley Water District.

0 0 votes
Article Rating
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments