January 9, 2008
Contact: Ron Nelson
(530) 273-6185
Or: Dave Carter
(530) 265-NEWS
FOR IMMEDIATE RELEASE:
NID Board Considers Water Rate Increases
GRASS VALLEY - Nevada Irrigation District
water rates would rise but still remain among the lowest in the region under a
draft water rate proposal now under consideration by the NID Board of Directors.
The board on Wednesday (Jan. 10) authorized staff to begin a public notification
process on the proposed increases as required by California Prop. 218.
The board’s unanimous vote followed a detailed financial and water rate report
by NID Finance Manager Marie Owens and financial consultant Alex Handlers of
Bartle Wells Associates.
Handlers said NID treated water rates are now providing about 60 percent of the
district’s costs in providing water service and that irrigation water rates are
providing only about 44 percent of costs.
“Overall, your rates are recovering only about half of your costs,” Handlers
advised the board. “That’s good news for your ratepayers but you’re subsidizing
rates with revenues from taxes and hydroelectric production.”
Handlers presented a phased approach that would allow NID to streamline and
simplify its rate schedules, keep rates low for customers who conserve and allow
the district to keep pace with its increasing costs.
Overall rate revenues to the district would increase by 6 percent in 2008 and by
6.5 percent in each of the following four years, under the financial plan.
For 2008, a residential treated water customer using a standard 5/8-inch meter
and 10 HCF (hundred cubic feet) of water per month -- twice that included in the
monthly base rate -- would see an increase of 5.5 percent or $1.48 per month.
Increases over the remaining years in the five-year plan would remain in the 4
percent range.
Commercial treated water rates would decrease as they are balanced with
residential rates. Handlers said it is hard to justify higher rates to
commercial water users.
District officials have focused on the needs of low water use and low income
individuals. A simplified rate schedule allows 5 HCF of water use at $1.08 per
HCF in the first tier water rate and a rate of $1.40 per HCF thereafter.
Irrigation water rates also are being simplified, also in a five-year phased
plan. In the first year of the cost of service approach, the district’s smallest
seasonal irrigation users would see increases, there would be no increases for
mid-range users and there would be increases for large users.
Handlers displayed a graphic showing rates of other water suppliers in the
region, with NID being second only to the City of Nevada City in water
affordability. This would not change with the proposed increases, he noted.
Water rate increases are more complicated under terms of state Prop. 218, a 1996
tax measure, which was later interpreted to include increases in fees and
charges for public services including water.
Under the Prop. 218 notification process, letters will be sent to ratepayers
throughout the district advising them of the board’s intent to raise water rates
and that a public hearing on the proposal is scheduled for Feb. 27.
The letter informs ratepayers that they have a right to protest the proposed
increases and provides information on how to do so.
If approved by the board, the new rates are expected to take effect in March.