Item 08 - Water and Sewer Rate Adjustments

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Table 59. Tier 1 Base Derivation Groundwater Supply 11,506,232 Customer Bills 546,300 Available per base Bill 21 Using the base derivation for all meter sizes, however, leads to much more water use under tier 2 than the available supply with most tier 2 use being allocated to larger meters. Table 60 shows the total water use under each tier if the base water derivation is used. Table 60. Water Demand Under Base Derivation Total Water Demand 13,536,745 Tier 1 6,304,559 46.6% Tier 2 7,232,186 53.4% To ensure that 85 percent of water is billed at the Tier 1 rate based on actual water use patterns a uniform tier width would need to equal 550 ccf a month. Under a uniform tier width, smaller meters would never reach the tier 2 threshold and thus would not be paying for the required 15 percent of purchased water. To ensure that customers are responsible for and have access to each available water source, the base water supply will be available to smaller meters, while large meters will increase the monthly supply based on their capacity ratio. This derivation takes into account both the increased investment made by larger meters when they buy in to the system, as well as the higher fixed monthly charges proposed, which pay for additional capacity demands on the system. The proposed tier widths also maintain the logic of the current rate structure and will lead to less impact on customers. Table 61 shows the updated tier widths based on the available water supply. Table 61. Monthly Tier Width Under Adjusted Derivation 5/8" X 3/4" 21 1.00 21 3/4" 21 1.50 32 1 " 21 2.50 53 1 1 /2" 21 5.00 105 2" 21 8.00 168 3" 21 17.50 369 4" 21 31.50 663 6" 21 65.00 1,369 8" 21 120.00 2,527 10" 21 210.00 4,423 City of Santa Ana - 2026 Water and Sewer Rate Study 43