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Home My WebLink AboutWater Budget Rate Study - Study Session 06-17-2013 Raftelis6/17/2013 WATER BUDGET RATE STUDY CITY COUNCIL STUDY SESSION June 17, 2013 k. i RAFTEL S Agenda Background of the Study Rates in Orange County Water Budget Rates Study Status Customer Impacts Implementation SUPPtS l:7/i3 g udy Session 2 COMMUNICATION Meeting Date: ��-3 Agenda Item No._ ��_ 6/17/2013 Background of the Study Prior Council Direction Orange County Grand Jury report recommended water budget rate structure Regulatory conservation goals (SB x7-7) Grant eligibility tied to conservation rate compliance Heightened concerns for future water supply restrictions 6/17/13 Water Budget Rate Study - City Council Study Session 3 Rate Structures in Orange County uoe..., uniform Rate Uniform Rate One cost per unit of water Inclining Tiered Rate Cost per unit increases with use Water Budget Tiered Rate Customer is allocated an amount of water based on household size and landscape area, cost increases with use Water Budget Rate Inclining Tiered Rate murex. WaterBudget Tiered Rat. Council Study Session 4 PA 6/17/2013 Rate Structures in Orange County Uniform Inclining Tier( -ington Beach Brea Anaheim Buena Park Mesa WD Fountain Valley Water Budget Tiered Emerald Bay SD IRWD Newport Beach Fullerton Moulton Niguel WD Serrano WD Garden Grove Laguna Beach WD Yorba Linda WD Golden State Water San Clemente La Habra San Juan Capistrano Orange Santa Ana Santa Margarita WD Seal Beach South Coast WD Tustin Westminster i 1f5� 6/17/13 Water Budget Rate Study - City Council Study Session S Huntington Beach Rate Commodity - $1.7535/ccf ccf = 100 cubic feet or 748 gallons Monthly Meter Fee - $11.24 Class Single Family # of Accounts 44,412 % of Total Average ConsumptionCustomer Accounts 84.41% % of Total 50.24% Mult-Family 4,117 7.82% 22.62% Commercial/Industrial 2,547 4.84% 16.32% Irrigation 966 1.84% 8.32% _Dedicated Municipal Facilities 104 0.20% 0.67% Municipal Irrigation 470 0.89% 1.84% Total 52,616 100% 100%^I Water Budget Rate Study - City Council Study Session 6 3 6/17/2013 HB Uniform Rate vs. Water Budget Water Bill Comparisons Monthly Bill At different Usage Levels $350 $300 $250 $200 $150 $100 $50 $0 5 10 15 20 25 30 35 40 45 50 Consumption in cd IRWD Summer San Clemente Summer +Huntington Beach Water Budget Rate Study - City Council Study Session 7 What Is a Water Budget? 00fate Water Budget Tiered Rate K Wactwu—c.,,lorccr 2 A $ gams W° 32 OUCgOt 0 In :0 30 a; s0 Tlarl TIur3 Turd Quantity Wavr Use--ge/�anape�mxlY �--- "Water budget rate is an increasing block rate structure in which the block definition is different for each customer based on an efficient level of water use by that customer." Source: American Water Works Association Journal, May 2008, Volume 100, Number 5 6/17/13 Water Budget Rate Study - City Council Study Session 8 al 6/17/2013 Conservation & Efficiency Water Conservation Reducing water usage Rules and regulations Water Efficiency Reducing water waste Target driven Restricting water use Appropriate water use 6/17/13 Water Budget Rate Study - City Council Study Session Water Budget Allocation Two components: Indoor Budget, which is determined by household size and gallons per capita per day (gpcd) Outdoor Budget, which is determined by landscape area estimate and weather 9 6/17/13 Water Budget Rate Study - City Council Study Session 10 G1 6/17/2013 Factors to Consider Indoor Allocation Outdoor Allocation Formula for determining landscape allocation Seasonal Component Customer Classes to include Variances 6/17/13 Water Budget Rate Study - City Council Study Session 11 Comparisons of WB Rate Structures IRWD (Irvine Ranch area) and San Clemente Indoor Water Budget GPCD 55 55 Default household size 4 4 Outdoor Water Budget Weather Real time ET by zone (coastal, central, foothill) Historical Seasonal Average Default Landscape Area Detached home: 1,300 sq ft SFR (<- 7,000 sq ft lot): 2,600 sq ft For Single Family Residential SFR (> 7,000 sq ft lot): 5,000 sq ft Tier Definitions Low Volume: 0 - 40% TWB $0.91 Tier1: Indoor $2.36 For Single Family Residential Base Rate: 41-100% $1.24 Tier 2: Outdoor $3.86 Inefficient: 101- 150% $2.76 Tier 3: Inefficient $8.30 Customers with WB Rates Allowed Variances Excessive: 151- 200% $4.70 Wasteful: above 200%TWB $9.84 All Household size, landscape area, other special needs SFR, Irrigation None Water Budget Rate Study - City Council Study Session 12 A 6/19/2013 Study Status Rate model completed and sample rates developed for SFR and dedicated irrigation Dedicated irrigation — actual landscape area SFR — Hybrid and Full Water Budget structures Hybrid Lot Size Bin Approach: developed lot size "bin" approach (3 bins) with default landscape area based on which bin the lot is in Full Water Budget Rate Option: alternate approach with estimated landscape area based on actual individual lot size " 6/17/13 Water Budget Rate Study- City Council Study Session Justification of Tiered Rates Components of Water Consumption Rates Water Supply Delivery Cost Water Use Urban Run-off Efficiency Blended Remaining costs Water Efficiency Treatment MWDOC / of delivering / Conservation /Prevention OCWD water to program costs Supplemental customer Water Supply (City's cost) 6/17/13 14 Water Budget Rate Study- City Council Study Session 7 6/17/2013 Rate Alternative Options 3-Tier Water 4-Tier Water ConsumptionWater Charges Tier 1 $1.7535 $1.6579 $1.6885 Tier 2 $1.7535 $1.9100 $1.9507 Tier 3 $1.7535 $2.9851 $2.3772 i Tier $1.7535 i $3.1962 6/17/13 Water Budget Rate Study - City Council Study Session 15 Customer Impacts % acted SFR Customer Impact Analysis Impact 90 80 70 60 50 40 30 20 10 0 $ change in bills $0 $0- $2 $2 $5 $5- $10- $20- $50- >$10 $20 $50 $100 $100 Hybrid WB 78 12 4 3 2 1 0 0 '- J6 Full WB r 65 20 8 3 2 1 0 0 6/17/13 Water Budget Rate Study - City Council Study Session 16 6/19/2013 Implementation Phased with overlapping steps New cashiering system — 6 to 8 months Field work — landscape area, multi -family — 9 to 12 months Refine rate methodology — 3 months New billing system —15 months Public outreach/Prop 218 notice — 6 months Total — 20 to 24 months 6/17/13 Water Budget Rate Study - City Council Study Session 17 Council Direction Proceed with Water Budget Rates? Budget for Billing/cashiering Refine Rate Methodology Other? 6/17/13 Water Budget Rate Study - City Council Study Session 16 9 6/17/2013 Discussion 6/17/13 Water Budget Rate Study - City Council Study Session 19 10