Frequently Asked Questions (FAQ) list:

• Why are water rates increasing?
• When was the last time water rates were increased?
• How much will my bill increase?

• Why is NID doing the Scotts Flat Spillway Replacement Project?
• What happens if NID does not complete the Scotts Flat Spillway Replacement Project?
• Why is the Scotts Flat Spillway Replacement Project so expensive?
• What is NID doing to offset the cost of the Scotts Flat Spillway Replacement Project?

• If NID receives additional state or federal funding, will the NID Board be able to lower proposed rate increases?
• What has NID done to offset rate increases in general?
• How did NID save $26.1 million since 2022?

• Why is the South Yuba Canal so expensive to operate and maintain?
• Why can’t NID just lay off more staff?
• It seems like NID’s system costs more to operate than other water districts in the state. Why is this?
• Why doesn’t the hydropower system's revenue reduce the water rates more?

• What is Proposition 218, and how does it affect water rates?
• Why are rates increasing now?
• What does the rate increase pay for?

• Why did NID remove the irrigation water single-payment 5% discount?
• Doesn’t NID save money when an irrigation customer pays in one installment rather than three?
• Why are we paying more when our water already feels expensive?
• The new rates will put farms/ranches out of business.
• If I am an irrigation customer, how can I lower my bill?

• How were the proposed rates developed?
• What happens if rates are not increased?
• How come NID drivers seem to be in newer trucks and have expensive equipment?

 

Why are water rates increasing?

The proposed water rate increase is to fund much-needed construction projects to address failing infrastructure and compliance with regulatory requirements. The primary driver of the proposed rate increase is the Scotts Flat Spillway Replacement Project, estimated to cost $55 million; the South Yuba Canal, which was recently acquired from PG&E, and escalations in operating costs due to inflation, material costs, and insurance.

 

When was the last time water rates were increased?

The NID Board last adopted a rate increase in April 2019; the last rate increase approved under the rate schedule was on January 1, 2021.

 

How much will my bill increase?

For all customers, your bill increase will depend on how much water you use or purchase.

If you are a treated water customer with a 5/8th inch meter and use 5 hundred cubic feet (HCF) or 3,740 gallons of water per month, your annual average bill will increase by $5.41 per month.

If you are an irrigation water customer and use one miner's inch of summer water, your monthly bill will increase by $24.43 per month (based on a six-month billing cycle).

 

Why is NID doing the Scotts Flat Spillway Replacement Project?

The Scotts Flat Spillway Replacement Project is required to be completed by the California Division of Safety of Dams (DSOD) and the Federal Energy Regulatory Commission (FERC). The dam is part of NID’s FERC-licensed Project No. 5930 and is classified as High Hazard due to the potential for loss of life in the event of failure. The lower spillway was constructed in the late 1940s. The spillway has been determined to require replacement due to concrete spalling and cracking associated with the facility's age. It is in the public’s best interest to complete the project and ensure water deliveries can continue to Nevada County.  Read more, NID Scotts Flat Spillway Project webpage.

 

What happens if NID does not complete the Scotts Flat Spillway Replacement Project?

It is likely that the regulatory agencies (DSOD) and FERC would require NID to store less water in the reservoir, which would significantly affect NID’s ability to make full deliveries in Nevada County.

 

Why is the Scotts Flat Spillway Replacement Project so expensive?

Over the past five years, NID and other government agencies have seen the cost of all construction projects rise due to inflation, labor shortages, and volatile material costs. Additionally, the project is a large construction project subject to intense state and federal regulations, which drive cost increases.

 

What is NID doing to offset the cost of the Scotts Flat Spillway Replacement Project? The District is applying for state and federal funding to offset the cost to our rate payers. Specifically, staff will be applying for Proposition 4 funding, federal community funding, and have obtained a $5 million grant from the Department of Energy.

 

If NID receives additional state or federal funding, will the NID Board be able to lower proposed rate increases?

Yes, if additional funding is obtained, the Board of Directors may opt not to impose an annual rate increase or to reduce it. As part of the Annual Budget adoption process, the Board votes each year on whether to implement a previously approved rate increase.

 

What has NID done to offset rate increases in general?

Staff levels have been reduced by 20 full-time equivalent positions, and since 2022, the District has saved $26.1 million, which is being used to buy down the required rates.

 

How did NID save $26.1 million since 2022?

The District has been able to save this money by reducing staffing levels, cutting other operational costs, and reducing capital expenditures. This money-saving initiative was implemented to start saving for required capital expenditures, allowing for lower rate increases.

 

Why is the South Yuba Canal so expensive to operate and maintain?

The South Yuba Canal is NID’s primary water conveyance that moves water from the mountain headwaters down into the District’s service area and supplies water to Scotts Flat Reservoir.. The District acquired the South Yuba Canal from PG&E in late 2023. The portion that NID owns consists of an open flume structure that has many sections that are elevated flumes on wooden structures. The South Yuba Canal was originally constructed in the 1850s during the height of the Gold Rush era to deliver water for hydraulic mining.

The South Yuba Canal is very expensive to maintain because it is old, fragile, and spread out over remote, rugged terrain. While the acquisition did include the Deer Creek Powerhouse, the power generated and sold does not create enough revenue to sufficiently maintain the powerhouse and the South Yuba Canal. To repair many sections of the canal, NID relies upon helicopter work to access remote areas. The canal is also prone to damage from falling trees and branches, rockslides, potential wildfires, and storm washouts. These risks increase the cost to maintain and operate the system. Read more, NID South Yuba Canal webpage.

 

Why can’t NID just lay off more staff?

As noted in the previous answer, the District has already reduced staff levels by 20 positions. The District's infrastructure is vast and spans a large geographical area, making it very labor-intensive to operate. If labor is further reduced, customer service and water reliability would decline. Additionally, the District added the Deer Creek Powerhouse and the South Yuba Canal to our infrastructure inventory without increasing staffing.

 

It seems like NID’s system costs more to operate than other water districts in the state. Why is this?

NID’s system is one of the most unique water systems in the state. Much of the system dates back to the Gold Rush era and includes more than 500 miles of open canals and flumes. NID recently acquired the South Yuba Canal, which added 14 miles of elevated wooden and earthen flume built in the 1800s to our inventory.

Additionally, NID owns the most reservoirs in the state, including 30 reservoirs and small storage impoundments. The vastness of the system, the large geographical area, and the complexity of operating a system of this size all contribute to high operating costs. There is also a very high regulatory burden for a system of this size, related to the operation of treated water systems, dam operations, and regulatory permit compliance. Collectively, these attributes increase the cost of operating and maintaining the system compared to other systems.

 

Why doesn’t the hydropower system's revenue reduce the water rates more?

Revenue generated from the sale of power generated by NID’s power plants is used to pay for the operation of the upper division. This is the system that moves water to Scotts Flat and Rollins reservoirs. The hydropower system consists of eight hydropower plants. This is the largest number of hydropower plants owned by a water district in the state. Although this is the largest number of powerhouses owned, NID does not generate the most hydropower. NID’s largest powerhouse generates 39 megawatts, and the smallest generate .5 megawatts, with the district having a total generation of 87.90 megawatts.

NID’s hydropower system was not originally set up to maximize profits; it is operated to maximize water deliveries rather than hydropower generation. The hydropower system consists of small plants that have low-head, which results in limited output. Decreasing available revenue that could be used to lower rates.

  

What is Proposition 218, and how does it affect water rates?
Proposition 218 is a state law that limits how local agencies, such as NID, can set rates for water service. Under this law, water rates can only be increased to cover the actual cost of providing service, including operations, maintenance, infrastructure repairs, and system reliability. The District cannot raise rates to generate unrelated revenue or fund programs outside the cost of delivering safe, reliable water.

 

Why are rates increasing now?

The District delayed rate increases for several years to reduce impacts on customers. However, costs have continued to rise during that time. Adjusting rates now helps align revenue with the actual cost of operating and maintaining the water system.

 

What does the rate increase pay for?

Water rates support the full cost of delivering water, including:

• Treatment and delivery of safe drinking water
• Maintenance and repair of pipelines, pumps, and facilities
• Energy to operate treatment plants and pumping systems
• Materials and construction for system upgrades
• Emergency preparedness and infrastructure reliability

These investments help ensure the system continues to operate safely and reliably.

 

Why did NID remove the irrigation water single-payment 5% discount?

Any discount given to one subset of rate payers is paid for by the other rate payers, not taking the discount, and is not consistent with California legal requirements.

 

Doesn’t NID save money when an irrigation customer pays in one installment rather than three?

No, it actually costs more to process a single installment payment because it is a manual action that cannot be completed in the automated billing system.

 

Why are we paying more when our water already feels expensive?

We understand that many customers already feel their water bills are high. Water service can feel expensive because most of the cost is not the water itself; it’s the infrastructure required to deliver safe drinking water every day.

Pipelines, pumps, treatment facilities, storage tanks, reservoirs, and monitoring systems must all be maintained and replaced over time. These systems operate 24 hours a day and must meet strict state and federal drinking water standards.

Like many utilities across California and the country, the District has also seen significant increases in the cost of electricity, construction materials, equipment, and labor in recent years.

The proposed rate adjustment is intended to ensure the District can continue to maintain and upgrade the system so it remains safe, reliable, and able to serve the community for the long term.

 

The new rates will put farms/ranches out of business.

We understand that water costs are a major concern for farmers and ranchers, and we take the impact on agriculture very seriously. The proposed rates are designed to cover the actual cost of delivering safe, reliable water while supporting the system's long-term sustainability. The rates cannot legally make a profit.

 

If I am an irrigation customer, how can I lower my bill?

Many irrigation customers are not utilizing the entire amount of water purchased. We recommend all irrigation customers review their water use to determine if they can reduce the amount of water purchased to save money.

The District works closely with agricultural customers to:

• Provide rate structures that are fair for different customer types
• Encourage efficient water use to help reduce costs
• Support the construction of micro ponds to fully leverage water purchased
• Maintain reliable water delivery so crops and livestock have the water they need

 

How were the proposed rates developed?

The proposed changes are based on the NID Water Rate Study, a comprehensive financial and operational analysis. The study helps ensure that rates are:

• Fair and equitable across customer classes
• Sufficient to fund essential services
• Designed to maintain financial stability and emergency reserves

 

What happens if rates are not increased?

Without adequate revenue, the District would have fewer resources to maintain and repair infrastructure. Over time, that could affect system reliability, emergency preparedness, and long-term sustainability.

 

How come NID drivers seem to be in newer trucks and have expensive equipment?

We understand that seeing new vehicles or equipment can be frustrating when it feels like you’re paying more for service. It’s important to know that the District’s vehicles and equipment are critical tools for keeping the water system safe and reliable.

• Trucks and equipment are replaced based on age, mileage, and maintenance needs — not as perks.
• Having reliable vehicles ensures crews can respond quickly to emergencies, perform maintenance, and prevent service interruptions.
• Investing in proper tools actually helps avoid costly service failures that could drive rates even higher in the long run.

The proposed rate adjustment supports maintaining and upgrading the system, including the equipment crews need to keep water flowing safely every day.

 

 For more information, see:

• NID Cost of Service Study
• NID South Yuba Canal
• NID Scotts Flat Spillway Project
• "Understanding Proposition 218" (State Legislative Analyst's Office)