California Water Rate Studies

California Water Rate Studies

Residential Water Rates

RDN has prepared comparative residential water rate studies focused on explaining differences in rates among purveyors in neighboring jurisdictions. These analyses estimated nominal and effective costs to residential customers of purchasing water from Golden State Water Company in each of the Company’s 24 service areas throughout California and compared these costs to water costs in more than 100 surrounding communities. The analyses required collection of detailed information on water agencies’ rate structures, revenues, budgets, scheduled capital improvement projects, and related service-area demographic characteristics for each agency in this very large sample. The analyses measured the cost to customers of purchasing monthly specified volumes of water from each agency along with the full cost-recovery of consuming the same water quantities in the absence of any agency funding other than from water sales. Our reports included detailed descriptions and a comparative analysis of the water rate structure, financial characteristics, and operating procedures of each purveyor, with econometric analyses of variations in costs among agencies. Our work provided a critical benchmark for Golden State Water Company’s water pricing policies and facilitates communication with rate-payers and the California Public Utilities Commission regarding the reasonableness of Company water rates. This state-wide study program yielded a comprehensive database on water pricing structures for public and private utilities of all sizes, with differing sources of raw water and varying water use efficiency objectives.