Tiered Rates Tiered Rates Cathedral City Cathedral City City - - PowerPoint PPT Presentation

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Tiered Rates Tiered Rates

Cathedral City Cathedral City City City Council Study Session Council Study Session

• Oct. 22, 2008
• Oct. 22, 2008

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Coachella Valley water demands Coachella Valley water demands 668,900 acre-feet 668,900 acre-feet

Domestic 34% Golf 16% Ag 50%

Agriculture Golf Domestic

* Valleywide demands on all sources of water

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Water Management Plan Water Management Plan goals goals

Agriculture – 7% reduction by 2015 Golf – 5% by 2010 Domestic – 10% by 2010 (currently at 6%)

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Why adopt tiered rates? Why adopt tiered rates?

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#1 Reason: Water Conservation #1 Reason: Water Conservation

• Proven water savings results 22% -

37%

• Increased cost of imported water
• Proposed legislation calls for 20% reduction by 2020
• Reduced water down streets
• Lower maintenance costs
• Keep economy viable
• Ensure long-term

viability of the aquifer

• Prevent subsidence
• Improve overall

perception of the valley’s water use

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0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 J a n u a r y F e b r u a r y M a r c h A p r i l M a y J u n e J u l y A u g u s t S e p t e m b e r O c t

• b

e r N

• v

e m b e r D e c e m b e r Month Consumption (Ccf) 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 Weather (Et in inches)

Consumption Eto

Water consumption and efficiency Water consumption and efficiency

Wasted Water

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What are the different What are the different types of water rates? types of water rates?

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Volumetric rates Volumetric rates (like CVWD uses now) are: (like CVWD uses now) are:

• A rate structure where the unit price of water

remains the same regardless of water consumption

• Little economic incentive to conserve

Base rate

Units of water Units of water

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• A rate structure where the price of water increases

with each higher level, or tier, of consumption

• A “one size fits all”

solution

• A simple, increasing block rate
• Difficult to attain
• Based on arbitrary tiers

Standard tiered rates are: Standard tiered rates are:

Low rate Middle rate Higher rate

Units of water Units of water

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Water budget-based Water budget-based tiered rates are: tiered rates are:

• Individualized, defining the water budget

using one or more customer characteristics, including: – Number in household – Lot size – Weather conditions

• An incentive to be efficient
• A means to target inefficient water users

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Who else uses a tiered rate Who else uses a tiered rate structure? structure?

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Southern California Agencies: Southern California Agencies:

• Hi-Desert Water Agency

Hi-Desert Water Agency

• Mission Springs

Mission Springs

• Cucamonga Water District

Cucamonga Water District

• Irvine Ranch Water District

Irvine Ranch Water District

• Rancho California

Rancho California

• San Clemente

San Clemente

• Capistrano Valley

Capistrano Valley

• Santa Barbara

Santa Barbara

• Crescenta

Crescenta Valley Valley

• LA DWP

LA DWP

• Lake Arrowhead

Lake Arrowhead Northern California Agencies: Northern California Agencies:

• City of Rhonert

City of Rhonert Park ark

• Contra Costa Water

Contra Costa Water

• Monterey

Monterey

• Out of State Agencies:

Out of State Agencies:

• Salt Lake City

Salt Lake City

• Southern Nevada

Southern Nevada

• Las Vegas

Las Vegas

• Albuquerque

Albuquerque

• Centennial, Colorado

Centennial, Colorado

• Aurora, Colorado

Aurora, Colorado

• Castle Rock, Colorado

Castle Rock, Colorado

• Boulder, Colorado

Boulder, Colorado

• Morrisville, NC

Morrisville, NC

• Cary, NC

Cary, NC

• Marco Island, FL

Marco Island, FL

• Santa Rosa

Santa Rosa

• Redwood City

Redwood City

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Starting point Starting point

• Start with residential

(single family homes) and dedicated landscape customers (cities, school, HOAs, etc) only

• Implement in 2009

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Indoor allocation Indoor allocation

• Provides generous

“indoor needs” allotment based on more than 4 people (10 Ccf

• r 250 gpd)
• Industry standard for

indoor use is 60 gpd per person

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Landscaped area Landscaped area

• Assumes 45% of

lot is landscaped

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Promotes irrigation efficiency Promotes irrigation efficiency

• Assume grass

landscaping with spray irrigation

• Irrigation

efficiency important for meeting water budgets

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Adjusts for weather Adjusts for weather

• Adjusts for observed

weather data

• Five climate zones
• Many people forget to

reduce water usage as temperatures cool, which will affect their ability to meet their water budgets

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Appeals process Appeals process

• Adjusts for appeals,

as needed

• Can appeal number

in household, lot size, irrigable area, weather zone and special circumstances

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Sample tier structure Sample tier structure for residential customers for residential customers

Tier Range Rate multiplier 1

(indoor needs)

Up to 10 Ccf

(indoor only)

90% Base Rate 2 Up to 105% of water budget Base Rate 3 Up to 200% of water budget 120% 4 Up to 300% of water budget 200% 5 300% or more of water budget 400%

* Ccf = 100 cubic feet of water

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How residential customers How residential customers will be affected will be affected

Tier % of accounts in range (Jan.) % of accounts in range (July) 1

(indoor needs)

42.93% 33.10% 2 17.77% 28.33% 3 26.03% 26.16% 4 8.03% 8.98% 5 5.25% 3.43%

13% of residential customers use 30% of water

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A real example A real example

• 8,354 square-foot

corner lot

• Desert landscaping

in front and side yards, grass in back

• Pool
• Smart Controller
• Two adults and a

child living at home

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20 40 60 80 100 120 140 January February March April May June July August September October November December Water Consumption Ccf

Water Budget Actual Consumption Indoor Needs Tier 2 Tier 3 Tier 4

Annual water cost before: $336.86 After: $326.89

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Real example #2 Real example #2

• 9,630 square-foot

corner lot

• Grass in front and

back yards

• Pool
• No Smart Controller
• Two adults and a

teenager living at home

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20 40 60 80 100 120 140 J a n u a r y F e b r u a r y M a r c h A p r i l M a y J u n e J u l y A u g u s t S e p t e m b e r O c t

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e m b e r D e c e m b e r Water Consumption Ccf

Water Budget Actual Consumption Indoor Needs Tier 2 Tier 3 Tier 4

Annual water cost before: $663.98 After: $704.83

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• Smart Controller program
• On-site technical assistance
• Brochures, web-site info, bill stuffers
• Lush & Efficient Landscape Gardening in the

Coachella Valley

• Landscape Workshop
• Appeals process

How will CVWD help How will CVWD help residential customers meet residential customers meet their water budget? their water budget?

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• Dedicated landscape meters (HOAs, cities, schools,

some businesses) – Based on landscaped area – No indoor allocation – Appeals process

• Other customer types (hotels/motels, restaurants,

etc.) will be phased in

What about non-residential What about non-residential customers? customers?

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Sample tier structure for dedicated Sample tier structure for dedicated landscape customers landscape customers

Tier % of accounts in range (Jan.) % of accounts in range (July) 1

(indoor needs)

NA NA 2 46.62% 51% 3 18.34% 22.23% 4 11.49% 11.8% 5 23.55% 14.97%

Landscape customers account for 4%

• f domestic

customers, but use 30% of domestic water

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A real example A real example

Large public school

• 14 landscape

meters

• 46 acres
• 52% irrigated
• Meters/rate for

indoor use stay the same

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5,000 10,000 15,000 20,000 25,000 30,000 J a n u a r y F e b r u a r y M a r c h A p r i l M a y J u n e J u l y A u g u s t S e p t e m b e r O c t

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e m b e r D e c e m b e r

Water Budget Actual Consumption Tier 1 Tier 2 Tier 3

Annual water cost before: $71,025 After: $76,275 If stayed within budget: $62,565

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Real example #2 Real example #2

Public parkway

• 1 landscape

meter

• 2 acres
• 100% irrigated

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500 1,000 1,500 2,000 2,500 3,000 J a n u a r y F e b r u a r y M a r c h A p r i l M a y J u n e J u l y A u g u s t S e p t e m b e r O c t

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e m b e r D e c e m b e r

Water Budget Actual Consumption Tier 1 Tier 2 Tier 3

Annual water cost before: $20,251 After: $44,052 If stayed within budget: $3,491

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• Large Landscape Smart Controller program
• Individual water audits and analyses
• Encourage customers to be more actively involved in

landscaping company/staff’s decisions regarding watering and plant choice

• Educational opportunities
• Bill Stuffer, brochure, web-site

How will CVWD help How will CVWD help landscape customers meet their landscape customers meet their water budget? water budget?

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• Tiered Rate Advisory Committee (TRAC)
• Presentations to City Councils, community

groups, HOAs, etc

• Public workshops
• Informational fliers distributed at public

events

• Bill stuffers and mock bills showing new rate
• Press releases

Public outreach and education Public outreach and education

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Questions? Questions?