City staff dropped updated costs of a huge wastewater-to-drinking water recycling project showing that its water would be cheaper than buying from the Water Authority.
By Mackenzie Elmer
As the San Diego City Council prepares to make major water rate hikes, city staff clearly want weary councilmembers to blame the San Diego County Water Authority and not the wastewater recycling project the city is building.
Tuesday the City Council will vote on a 63 percent water rate hike and 31 percent wastewater rate increase over the next four years. City Hall is abuzz with chatter that there may not be enough votes to pass the rate increases, which could set in motion an unpredictable series of events. The city pays the Water Authority about $30 million per month for water. The Water Authority’s bills to the city will come due no matter what. But if elected leaders refuse to raise rates, San Diego’s utilities department can’t collect the money it needs to function.
It’ll be a tough decision after several months of fee increases the City Council has approved. Last Friday, Council President Joe LaCava said he was worried the Council’s willingness to do those kinds of things was waning before the last of them: this big water rate increase.
On Friday, city Public Utilities staff released a new cost analysis that showed how Pure Water, a multi-billion-dollar wastewater recycling project, could produce cheaper water than what the San Diego County Water Authority provides.
The city’s new Pure Water numbers are the latest jab at the Water Authority over growing water prices, one that’s sure to trigger already fee-hike-weary city councilmembers fresh out of raising parking fees at San Diego’s most popular park. As the city grows more concerned over the Water Authority’s rising costs, the Water Authority has pointed right back at the city’s expensive Pure Water project and the fact that the city hasn’t disclosed how much it will cost since 2012.
“The timing is interesting,” said Dan Denham, general manager of the Water Authority about the analysis release. “We’ve been asking what the cost of Pure Water will be for a long time.”
So, what does the analysis say?
Pure Water in 2012 was supposed to produce water at a cost of $1,800 an acre-foot. An acre foot is how much water two California families use in a year. But a lot has changed since then.
Now, Pure Water, if fully built out, would cost $3,527 an acre-foot. That ranks Pure Water as the most expensive water in the region to date – just above de-salted ocean water from a plant in Carlsbad which the Water Authority purchases.
But city Public Utilities staff gave a bunch of caveats to this. Firstly, they said, the new Pure Water price is in 2024 dollars, accounting for all the inflation experienced by the American economy that affects costs for pretty much everything needed to build Pure Water.
If that 2012 price factored in all that inflation, the price difference is about $470 an acre-foot, a 15 percent increase.
More importantly, city staff say, is that building Pure Water saves the entire region from having to do something even more expensive: upgrading an old wastewater treatment plant perched on Point Loma. The plant discharges treated wastewater into the ocean and it’s one of the few in California still allowed to do so at a lower level of treatment.
“If we didn’t move forward with Pure Water, the wastewater portion (of your bill) would have to go up by an additional 106 percent to cover upgrades to Point Loma,” said Juan Guerreiro, director of the Public Utilities Department. “We would have to do that and still pay the Water Authority for whatever their costs are.”
San Diego agreed to build Pure Water instead of making more expensive upgrades to the Point Loma plant, they argue, as a deal with environmentalists years ago.
“Customers are getting a dual value with this investment,” said Ally Berenter, deputy director of external affairs for the city’s Public Utilities Department. “A sustainable drinking water supply with competitive water supply costs associated with it and avoiding billions in wastewater costs.”
A slide from a presentation the city prepared to share with City Council shows the water its project would produce undercutting the Water Authority’s untreated water price by $567 per acre-foot.
Looking at the full picture, Pure Water is winning the water cost contest by a hair here.
Denham, the Water Authority general manager, said his agency took heat for promising water from the Carlsbad desal plant would be cheaper than other resources it had. Now it’s the most expensive in the region and the city, among others, want the Water Authority to get rid of it.
“That was a lesson learned. As a water professional, I’m never going to … say this will be cheaper than that because no one is ever going to get it right. It’s impossible,” Denham said.
All of this finger-pointing by the city at the Water Authority has a lot of people miffed. San Diego basically controls everything the Water Authority does because the city is the Water Authority’s biggest customer and therefore holds the most power on its governing board. Mayor Todd Gloria’s deputy chief of staff, Nick Serrano, holds the top spot on that board as chair.
So, why doesn’t the city just act?
The answer represents a growing split in San Diego between those in favor of doing away with the Water Authority and those that want to preserve it.
Serrano, the board chair, said he’s working to provide what City Council members want: cheaper rates.
“None of the decisions that caused us to be in this place … happened overnight,” Serrano said. “It’s going to take time.”
Serrano pointed to his efforts fighting down a proposed 22 percent rate hike by the Water Authority on its supplies to 8 percent, as well as the Water Authority’s settlement of yearslong litigation with the Metropolitan Water District of Southern California.
But preserving the Water Authority is about preserving San Diego’s power at Metropolitan, Serrano said. If the Water Authority is dissolved, broken up or eliminated, that reduces San Diego’s voting power on Metropolitan’s board.
San Diego might want to hold onto that power as Metropolitan ponders its own water security solutions like a $20 billion tunnel to carry more water south from northern California, which Gov. Gavin Newsom wants to fast-track. And, Metropolitan wants to build its own multi-billion-dollar billion Pure Water project. San Diego would be on the hook to pay for some of that.
“If we are suggesting to dilute our vote, the other interests of Los Angeles and Orange County are going to dictate that,” Serrano said.
