How Well Will LA's New Water Rates Promote Conservation?

Over the last few months, L.A. water users and policymakers have publicly debated the Los Angeles Department of Water and Power's (LADWP) new water rates. It remains to be seen whether or not the additional revenue that the rate increase would generate is sufficient to resolve some of the department's recurrent water woes. The rates show significant potential, however, with respect to improving the way system costs are distributed.

In this time of drought, and always, water conservation is important in Southern California. Pricing water appropriately is one of the most critical and cost-effective measures for promoting water conservation.

The new rates offer several potential conservation benefits. The proposed four-tier structure presents an opportunity to promote water conservation where and when we need it most. The rates also consider water affordability; keeping lower-volume users' bills affordable helps to maintain equity and reward conservation. Further, the adoption of the "de-coupling" system should enable LADWP management to embrace new water efficiency measures while maintaining revenue stability. The new rates will also eventually eliminate unfair special rates for large tract irrigation and agricultural uses that encourage suboptimal landscaping and water use.

But some features of the proposed rates also represent a significant missed opportunity to promote conservation and secure our city's water future. To name one example from LADWP's proposed rates for single-family residential customers, "excessive use" of water is priced at the Tier 4 rate. But the fact is that significant excessive use is also allowed within Tier 3 at a lower price. The California Model Water Efficient Landscape Ordinance and the Los Angeles Irrigation Guidelines hold an appropriate water allocation to be 70-85% of evapotranspiration (or "ET")--the amount of water used by cool season turf grass. This number adjusts depending on climate zone, so people in hotter zones are allowed a different volume of water in Tier 3 than those in cooler zones, for example. But LADWP's proposed rates will allow water use up to 135% of ET--which is by definition excessive--to be priced at the Tier 3 rate, which is not the highest-price tier. Some of the water use permitted within Tier three isn't just "high use," it's excessive. Permitting this high-volume use at to be priced at Tier 3 instead of Tier 4 rates can lead to higher prices for more modest users, and serves as a customer disincentive to taking conservation measures where they're most needed.

To help our city save water, LADWP should:

  • Revise allocations for Tier 3 water use downward to 85% of evapotranspiration, in keeping with state and city standards. This could result in a savings of 1.1 billion gallons, enough to supply the indoor water use of more than 15,600 Los Angeles households.
  • Allocate water system costs appropriately to account for additional expenses associated with excessive use.

By focusing its water pricing on issues of conservation and equity, LADWP can help save much-needed water, which is an important step toward decreasing the amount of imported water LA consumes. These steps will help the city save money and energy, adapt to climate-related weather changes, and be better positioned for the next drought.