New research shows how big water bill discounts for the region’s poorest would impact city budgets.
By MacKenzie Elmer, Voice of San Diego
Let’s call it what it is – San Diego has a cost of water crisis.
All the things San Diego built to get water and keep it here is pushing up the price of this key molecule with little sign of it dropping. The Escondido City Council just OK’d an 8 percent increase in January, triggering outrage from locals, reports KPBS. The city of San Diego jacked up rates almost 20 percent through 2025.
The conductor of this breakaway train is the San Diego County Water Authority, which brings in water from big sources and sells it to places like Escondido and San Diego. It recently passed on a 9.5 percent price mark-up to its 24 customer water districts. A couple of those districts are so peeved, they’re hoping to leave San Diego entirely for cheaper water elsewhere.
Is there some kind of emergency lever policymakers could pull on these prices, at least to protect the region’s poorest? New research by Jennifer Lee at Duke University and the San Diego Regional Policy & Innovation Center says: Maybe.
Relief could come in the form of a discount on water bills, much like low-income customers enrolled in the state’s California Alternate Rates for Energy program. Customers that qualify can save up to 35 percent on an electric bill and 20 percent on their gas bill.
For her graduate thesis at Duke, Lee compiled water bill and population data from over 600 water districts in California. She created a tool that calculates how much it would cost the state to offer discounts on a sliding scale to populations from varying poverty levels. Her work suggests it would cost the state $211 million per year to offer a 40 percent water bill discount to California’s poorest families using 4,000 gallons per month (about how much a family of four uses per month indoors for showers and cooking, etc.). That’s if just 80 percent of the people who qualified participated.
The cost represents a sliver of California’s most recent $226 billion budget.
The San Diego policy center commissioned a version of Lee’s work specific to each of the region’s water districts, giving birth to the Affordability Program Cost Estimator. It tells that it would cost the city of San Diego $10 million per year to offer its poorest a 50 percent reduction in water bills for up to 4,000 gallons of monthly use. That’s 0.2 percent of the city’s over $5 billion budget.
The tool also can apply the discount between the two different components of a water price: the volumetric (how much water is used) and the fixed (the cost of building stuff to deliver water) rate. It’s those fixed costs that are truly driving up prices in San Diego. So, policymakers could estimate how much it would cost to discount fixed costs on lower-income San Diegans while still charging for the amount of water used – thereby incentivizing conservation, the San Diego Regional Policy & Innovation Center’s chief economist Dan Enemark told me.
“There are enough children living in San Diego from a family of four making less than $30,000 a year to fill Petco Park. Twice,” Enemark said. “People need any help they can get.”
It’s only geting worse. U.S. News and World Report just reported San Diego is already the most expensive city in the country.
Except, water bill discounts don’t really exist in California. Congress established a federal low-income household water assistance program (called LIHWAP) during the Covid-19 pandemic. But that’s a one-time payment to help curb growing water bill debt. There’s no long-term, sustainable program out there for Californians.
Proposition 218 is typically blamed. Voters passed a ballot measure in 1996 limiting public water agencies to charge only what it costs to provide the service – meaning everyone is charged the same. But it also appears to restrict utilities from offering substantial discounts.
A bill requiring all California water and wastewater agencies to offer bill assistance to residential customers made it all the way through the legislature in 2022. Gov. Gavin Newsom vetoed the bill saying it lacked a funding source and that signing the bill would result in billions of dollars of pressure on the state budget.
Enemark stressed that this work isn’t about telling policymakers what to do. But it’s the first time this water cost data has been neatly pulled together to show how easy or difficult it would be to give some San Diegans a break.
“Any bill becomes a daunting challenge when you are living paycheck to paycheck,” Enemark said. “But it’s not an enormous percentage of the budgets we’re already spending on governing.”
This story was first published by Voice of San Diego. Sign up for VOSD’s newsletters here.
