Millions of Dollars Needed to Help Low-Income Ratepayers with Water Bills, State Water Board Told
Five million Californians have affordability issues
A statewide program that began under a 2015 law to help low-income people with their water bills would cost about $600 million annually, a public policy expert told the California State Water Resources Control Board (State Water Board) at a meeting last week.
The State Water Board met Feb. 8 to get updated on progress made on implementing the Low-Income Water Rate Assistance Program. An implementation plan is due by Jan. 1, 2018. Legislation for the program was carried by then-Assemblyman Bill Dodd, D-Napa, after some ratepayers in his district were hit with skyrocketing water bills because of infrastructure improvements. Dodd is now a state senator.
The estimated amount needed to fund assistance for qualified ratepayers “dwarfs” the amount of rate assistance that currently exists for other utility services, according to J.R. DeShazo, professor of public policy at the University of California, Los Angeles.
About 14 percent of California households live below the federal poverty line of $24,600 for a family of four. Increases in water rates come at the expense of other vital costs such as rent and food.
State Water Board member Steven Moore said water “too often gets placed in context of other utilities,” none of which are as fundamentally important.
A legislative analysis of Dodd’s bill noted that the federal and state governments use a water affordability threshold to factor in variable costs of living across California, with a household at the median income of $61,000 not expected to pay more than $915 annually for water. Households paying more than that are considered to be paying a cost that is unaffordable and a “high burden.”
When Gov. Jerry Brown signed Dodd’s bill, he wrote that it provides “modest additional steps” to help people with their water bills. Brown also noted that one of the biggest impediments for public water systems that want to establish low-income rate assistance programs is Proposition 218.
Approved by voters in 1996, Prop. 218 defines water and wastewater services as property-related fees, requiring public water agencies to restrict their water rates to the cost of service, essentially barring them from using ratepayer funds to establish assistance programs for low- income customers. Navigating Prop. 218 is part of the State Water Board’s creation of a rate assistance program.
Water affordability is bracketed by macro and micro delineations, said Laura Feinstein, senior research associate with the Pacific Institute. At the macro level, one-half of a ratepayer base can’t afford the monthly bill. At the micro level, a subset of low-income customers in a water service area faces a struggle.
Of the 27 million people served by California’s major urban water providers, 5 million have affordability issues, said Katie Porter with California Urban Water Agencies.
Because many systems do not have the capacity to support a low-income water rate, the idea of a statewide program being developed is a possibility.
“There’s theory and there’s practice,” State Water Board Chair Felicia Marcus said. “In practice we have to figure out how to pay for it.”