In recent years, many California public water agency boards have arbitrarily set water budget usage levels in tiers thereby identifying “good” through “wasteful” usage levels, often supported only by circumstantial evidence. Prop 218, and finally, after 20 years, this court decision, requires pricing the service and commodity at no more than actual costs at any given usage level. Further, I believe the judge wrote that arbitrarily setting “budget” usage tiers was not appropriate unless supported by facts in agreement with AWWA water rate design principles.

Note that many water districts only read meters and bill customers once every two or three months (only four or six meter readings per year). As such, these utilities don’t have monthly customer usage data that is needed to set fact-based tiered rates that can overlay and align to the utility’s actual hourly, daily and monthly operating costs (variable marginal costs). If bi-monthly or quarterly meter reading water districts charge customers under inverted, progressive, commodity rate tiers, such rates are no more than wild ass guesses! Flat commodity rates for all usage amounts tied to actual costs (compared to estimated marginal costs for arbitrarily set budget based tiers), offer water customers a high level of fairness not often found in California utility rates, but now mandated by Prop 218, and case law, at least for public agency water customers.

This is being confused with the price tiers in the Capistrano water rate case.

They are not the same thing.

However, mandated water reductions will result in cities and water districts having to raise their water rates to cover their COST OF SERVICE. But, again, this will have nothing to do with the Capistrano case court ruling.