Water rates not affected as Metropolitan board appropriates $133 million for increased power costs
Without impacting wholesale water rates throughout Southern California, Metropolitan Water District's (MWD) board of directors today approved a $133.8 million budget increase to pay for escalating power costs to pump water from the Colorado River and Northern California.
LOS ANGELES, Calif., June 12, 2001 — Without impacting wholesale water rates throughout Southern California, Metropolitan Water District's (MWD) board of directors today approved a $133.8 million budget increase to pay for escalating power costs to pump water from the Colorado River and Northern California.
The increased power costs in the current 2000-01 fiscal year will be financed from reserves generated by higher-than-anticipated water sales as well as revenues from the sale of energy from the district's 16 hydroelectric power plants, including Metropolitan's newest plant at Diamond Valley Lake near Hemet in southwest Riverside County.
"Through strong financial management, flexible reserve policies and favorable hydrology, we are able to absorb these increases in power costs without increasing our water rates," said MWD Chief Executive Officer Ronald R. Gastelum.
In a separate action, Metropolitan's board also approved a $1.23 billion budget for the 2001-02 fiscal year, which calls for no increases in MWD's basic water rates for the sixth consecutive year. The new spending plan is $171 million, or 16 percent higher than the 2000-01 fiscal budget, primarily because of increased power costs.
The 2001-02 budget is based on anticipated sales of 1.96 million acre-feet of water during the fiscal year, which covers July 1, 2001, to June 30, 2002. An acre-foot of water is nearly 326,000 gallons, enough to meet the needs of two typical Southland families in and around their homes in a year.
Topping the causes for the budget increase is the rising cost of delivering Colorado River water into Metropolitan's 5,200-square-mile service area. Owned and operated by Metropolitan, the 242-mile-long Colorado River Aqueduct normally provides about one-fourth of Southern California's water supplies. Because of increased energy costs, Metropolitan plans to spend $141.1 million on power to operate the aqueduct system in 2001-02, $106.2 million more than originally budgeted in 2000-01.
The approved budget also includes a $288 million capital improvement outlay — a $38.4 million increase — funded primarily through bond proceeds, to keep pace with added water quality requirements and demands being placed on the district's distribution system. Key components of MWD's system improvements are the construction of the Inland Feeder, a major new imported water line, and oxidation treatment facilities at two MWD filtration plants needed to meet increasingly stringent water quality regulations.
"Despite the increasing power costs, our spending plan reflects Metropolitan's continued commitment to water supply reliability for Southern California's future," Gastelum said. "As part of our emphasis on ensuring that the existing infrastructure is reliable, we're making the investments necessary to help meet the needs of our 26 member public agencies and 17 million Southland consumers."
In other actions, Metropolitan's board:
* adopted a resolution naming the viewpoint at Diamond Valley Lake after the late Clayton A. Record, Jr. A former Riverside County supervisor and vice chair of Metropolitan's board, Record represented Eastern Municipal Water District on the MWD board from June 1999 to January 2001. Record passed away Feb. 16. The Clayton A. Record, Jr. Viewpoint will be officially dedicated in ceremonies later this year.
* authorized $2 million toward the development of the Southern California Water Education Center at Diamond Valley Lake. The funds will finance pre-development activities, including programming design, project planning, preparation of environmental documentation, entitlements and facility design. The center will provide public education about the development of the region's water resources.
The Metropolitan Water District of Southern California is a cooperative of 26 cities and water agencies serving 17 million people in six counties. The District imports water from the Colorado River and Northern California to supplement local supplies, and helps its members to develop increased water conservation, recycling, storage and other water-management programs.