San Diego water districts see unending upward pressure on water rates in the region. But the price shock people are feeling now excludes some major, impending projects outside San Diego.
By Mackenzie Elmer, Voice of San Diego
This story was first published by Voice of San Diego. Sign up for VOSD’s newsletters here.
The cost of water in San Diego will continue to skyrocket but we don’t have a good idea where or whether it will stop.
The city of San Diego recently revealed its own water rates will rise a whopping 61 percent through 2029, adding about $57 per month to the average water bill. Part of the reason is the San Diego County Water Authority, which sells water to the region’s 22 water districts, is paying off debt and deals it took on many years ago to claim more Colorado River water and tap into ocean water for drinking. Another reason is cities like San Diego are building their own expensive wastewater recycling systems.
But this year’s price spike – or any water rate forecast in San Diego right now – doesn’t account for some of the largest and most expensive water security solutions being pondered in Southern California right now by the Metropolitan Water District of Southern California and beyond.
San Diego would also be on the hook for those.
One is a $20 billion plan to build a tunnel to carry more water south from northern California, called the Delta tunnel project. The Water Authority’s been both booster and skeptic on this state project supported by multiple governors past and present. San Diego is currently a booster again, voting just last week at Metropolitan to spend over $142 million on planning the project.
The other is an estimated $8 billion sewage-to-drinking water recycling project in Los Angeles called Pure Water Southern California. Dan Denham, general manager of the Water Authority, said both the Delta and recycling projects are in very early stages, but have the potential to help California reduce its demand on the Colorado River – where most of Southern California drinks from right now.
Rebecca Kimitch, a spokesperson for Metropolitan, confirmed the agency’s budget doesn’t include or forecast any of those costs into its own water prices. That means San Diego doesn’t have a clear idea how much water will really cost in the future.
“Any increase at Metropolitan is going to affect the rates at the Water Authority,” said Amy Reeh, general manager of Yuima Municipal Water District. “It all rolls downhill.”
Fights in Southern California water politics look the same no matter where you look right now. Everyone is trying to develop their own local supplies, like recycling sewage, with the hope of getting off the teat of evermore expensive water wholesalers like the Water Authority. The Water Authority is doing everything it can to avoid buying water from Metropolitan. And Metropolitan, which maintains Southern California’s lifeline aqueducts to the Colorado River and Sierra Nevada mountain water, is doing everything it can to find new water supplies and protect cities like Los Angeles from water shutoffs during drought.
“What’s happening at Met with rates and water demand is happening at the Water Authority and with the city of San Diego,” Denham said. “The industry is changing right before our eyes.”
San Diego’s Runaway Rate Train
Headlines about rising water rates were everywhere this year in San Diego County: “Painful but necessary,” “water bills double,” “tough to swallow.”
It all began when the Water Authority proposed a whopping 22 percent water rate increase for 2025 on its 22 customer water districts, the largest single yearly spike in 15 years. Each water district has to then figure out how to absorb the Water Authority’s increased costs into their budgets or pass it on to customers through water bills. It hurts everyone differently.
“Even a 1 percent increase (on the cost of water) could mean someone shutting down a (farming operation),” Reeh of Yuima said.
The city of San Diego, the region’s biggest water purchaser and therefore the most politically powerful on the Water Authority’s board, looked at that number and said: No way.
San Diego Mayor Todd Gloria pushed his 10-member stronghold on the 33-member board (known in water world as “the city 10”) to fight the hike, no matter the cost.
He succeeded, because as long as his contingent remains loyal, San Diego needs only one other water district to agree with them to achieve their will. The rate hike dropped to just 14 percent; a result Mayor Todd Gloria celebrated as a victory during his re-election campaign.
Not everyone cheered, including some members of Gloria’s own contingent. Dropping the rate now meant putting off major work the Water Authority needs to do like delaying some anti-earthquake-related upgrades on its lifeline aqueducts that supply the majority of San Diego’s water.
“If I decide not to do (pipeline work) and one goes out, I have a few customers interrupted for a day or two,” said Gary Arant, general manager of Valley Center Municipal Water District, which purchases all its water supply from the Water Authority because it has no local supplies. “But if a Water Authority aqueduct blows out, we have hundreds of thousands of people out of water.”
But San Diego wanted more.
A large chunk of the Water Authority’s rate increase goes toward paying off debt and contracts for Colorado River and de-salted ocean water the agency made years ago. Mayor Gloria’s administration wants the Water Authority to sell off some of those hard-fought supplies to save money.
“(The Water Authority) has contractual obligations to purchase water supplies that exceed the total water demand of the San Diego region,” said Ally Berenter, deputy director of external affairs for the Public Utilities Department at a city budget hearing. “This poses a long-term structural issue for the Water Authority that threatens its financial stability.”
And, it threatens the city of San Diego’s financial stability, they believe. It’s not in the city’s interest to be buying water from outside San Diego County because they’re developing their own local resource: Recycled water.
Denham, the Water Authority’s general manager, admitted that the Water Authority has more water than it can use, something general managers preceding him resisted saying for years. But instead of getting rid of contracts for Colorado River and desalinated water altogether, Denham posted San Diego’s extra water for sale.
“We don’t have the ability to just back out of (those contracts),” Denham told me. “We’re trying instead to balance our resource mix to see if we can move water to different places.”
In 2023, Denham struck a water trade deal with major southern California water agencies, saving the agency a reported $20 million or a 3 percent water rate decrease for customers, he said. The dealmakers replicated that agreement again this year – something that’s easier to do now after a few years of good rain when California has plenty of supplies to go around.
Nick Serrano, deputy chief of staff to Mayor Gloria and the new chair of the Water Authority, thinks San Diego should be looking to make more transfers like these with Metropolitan. He’s skeptical the Delta tunnel project and Los Angeles’ water recycling projects are necessary.
“We have local supply projects we’ve invested in San Diego and, to some degree, it’s supply we can offer up or transfer,” he said.
Not knowing how the Delta tunnel or Los Angeles’ recycled water projects further north will trickle down to the Water Authority and ultimately her budget concerns Lindsay Leahy, the city of Oceanside’s public utilities director.
Leahy sits on the Water Authority’s finance committee. She said she hasn’t seen any budget projections to date that include the Delta or Los Angeles’ Pure Water project. Nor has she seen full-cost projections of other anticipated costs at the Water Authority – like a fix to the failing Lake Hodges dam or upgrading the agency’s main wastewater treatment plant called Twin Oaks.
“We need to have a full picture on all the potential upcoming projects and understand the financial impacts,” Leahy said.
