Politics & Government

Stanford Experts Weigh in on San Juan Capistrano Water Lawsuit

The law of unintended consequences may force water agencies to change the way water is billed. State politicians may then have to course-correct.

A Stanford University think tank on water issues has weighed in on San Juan Capistrano’s water billing controversy and concludes that it may ultimately have unintended consequences for water providers around the state.

In August, an Orange County Superior Court judge ruled that the city has violated the state Constitution by sending water bills based on a four-tiered rate formula and by charging all landowners a fee for recycled water to which few have access. The City Council has appealed the decision.

In the meantime, experts from Stanford University’s Woods Institute for the Environment and the Bill Lane Center for the American West – in a collaboration called Water in the West – give their take on what’s happening in San Juan Capistrano and opines that news here may have far-reaching impacts on cities across the state.

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“Its potential to further complicate the ability of California water agencies to provide reliable, clean water to communities should motivate decision makers in Sacramento and voters throughout the state to come to their rescue,” the summary says.

At issue is Prop. 218, a law that requires fees to be charged in direct correlation to how much it costs to provide the service billed. Juxtaposed is another law that requires conservation among water users, Water in the West notes. Tiered water rates generally try to motivate people to use less water by charging incrementally more for water used in excess of basic minimum needs.

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“The lessons from this ruling and a potential way forward appear to be twofold,” Water in the West says. “First is that public agencies must work with their rate consultants to establish a clear, understandable and compelling record for the courts that demonstrate that new rates will result in water savings, that new rates are equitable, and that higher water users place a disproportionate burden on water systems, particularly in the cost of new supplies, and therefore warrant higher rates.”

Then again, another option might just be to clearly label the upper tiers penalties for excessive water use, the Stanford experts say, adding that such a move may not be politically popular.

Resolving the recycled water fee may be trickier, Water in the West’s paper says.

“It is completely impractical to imagine a utility having to allocate costs strictly to who uses what part of the water system. …  If they were forced to track which of their customers received which water and charge them differently – the logical extension of the ruling in San Juan Capistrano – it would result in an inefficient mess. Should we now expect water agencies to track individual water molecules and which pipes they travel? Let’s hope not!”

The Stanford experts conclude that the transparency and oversight sought in Prop. 218 “inadvertently threaten one of the most stable, reliable, and important institutions in our society – our public water agencies.”


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