California’s water conservation efforts hindered as tiered pricing ruled unconstitutional

A man waters down the sidewalk outside Taco Bell in Los Angeles, California April 15, 2015. (Reuters/Lucy Nicholson)
California’s tiered water pricing has to be based on delivery costs rather than conservation incentives, a state appeals court ruled. The verdict will have major implications on California’s efforts to conserve water amidst its unprecedented drought.

The much-anticipated decision saw the Fourth District Court of Appeals overturn the pricing system in San Juan Capistrano, a city of 35,000 in California’s affluent Orange County. It said it violated a 1996 amendment to the state constitution, known as Proposition 218.

“We do hold that above-cost-of-service pricing for tiers of water service is not allowed by Proposition 218 and in this case, [the city] did not carry its burden of proving its higher tiers reflected its costs of service,” said the judges William Bedsworth, Eileen Moore and David Thompson.

The city’s water pricing system charged customers who used small quantities of water, a lower rate than customers who used larger quantities. According to the Orange County Register, aerospace executive Jim Reardon and former school administrator John Perry filed a lawsuit challenging the pricing in 2012, claiming that the scheme was implemented to recoup the costs of the city’s expensive groundwater recovery plant. Perry withdrew from the case after being appointed to the city council in February 2015.

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The judges did say that tiered prices are legal, so long as the government agency could show that the rates were tied to the cost of providing the water. In regards to San Juan Capistrano, they said, this was simply not the case. The city’s water agency “merely allocated all its costs among the price tier levels, based not on costs, but on predetermined usage budgets.”

According to the Los Angeles Times, 66 to 80 percent of California water providers use some type of tiered pricing system. A 2014 University of California Riverside study estimated that tiered rate structures reduced water use by up to 15 percent.

Earlier this month, California Governor Jerry Brown (D) ordered a 25 percent reduction in water usage by the end of the year. It was the first mandate to conserve water in the state’s history, prompted by a fourth year of an unprecedented drought.

A 2014 study by scientists at the Woods Hole Oceanographic Institute and the University of Minnesota concluded that the current drought was the worst in the past 1,200 years, using used tree rings to reconstruct the Golden State’s temperature and precipitation history since the 9th century. Other scientists have urged water rationing, warning that the state may not have more than a year’s worth of water left.

The appeals court judges noted that they were aware of the dire situation, making a reference to a 1986 book about the water woes of the American west.

“We hope there are future scientists, engineers, and legislators with the wisdom to envision and enact water plans to keep our beloved Cadillac Desert habitable,” the ruling reads. “But that is not the court's mandate. Our job, and it is daunting enough, is solely to determine what water plans the voters and legislators of the past have put in place, and to determine whether the trial court’s rulings complied with those plans.”