Padre Dam Municipal Water District: Water Tight
By: Eric Slack

Despite a fragile state economy, ongoing drought, and rate hikes from its suppliers, this California water district has taken the sting out of customers’ wallets while investing in infrastructure and promoting sustainable water use. 

Despite a fragile state economy, ongoing drought, and rate hikes from its suppliers, this California water district has taken the sting out of customers’ wallets while investing in infrastructure and promoting sustainable water use.

Originally formed as the Rio San Diego Municipal Water District in 1955, California’s Padre Dam Municipal Water District has long played a critical role in the growth of its service territory, about 20 minutes by car from downtown San Diego. Prior to its creation, there was no water utility in this valley.

Headquartered in Santee, Padre Dam now serves an 85-square-mile territory with just under 25,000 meters, providing water, sewer, and recycled water for the 100,000 people living in the suburban communities of Santee, Blossom Valley, Crest, Harbison Canyon, and Alpine. It also hosts more than 650,000 visitors per year at fishing, fitness, and camping venues at Padre Dam’s Santee Lakes.

As the utility was a big part of the growth of the region, its major responsibility now is helping the region through a tough time. These San Diego suburbs have been hit by the poor economy, a statewide drought, and rate increases from Padre Dam’s suppliers. Metropolitan Water District of Southern California, the wholesale water supplier for most of Southern California, ordered a mandatory reduction in water use starting July 1st of this year and increased its rates by 19.7% on September 1st.

“When you require customers to cut back water usage and hit them at the same time with a water-rate increase, that is a tough message,” said Doug Wilson, Padre Dam’s general manager. “The reason for the rate increase from our suppliers stems from decisions made at the end of the last drought in 1993. Our suppliers invested in water infrastructure to improve reliability, issuing debt that translates into fixed costs. That debt has to be paid no matter how much water is sold.”

When water sales go down, water rates go up to maintain the revenues needed to pay fixed costs. Throw in a recession, foreclosures, and unemployment, and the challenge of maintaining a good relationship with customers is clear. But Padre Dam has come up with an equitable solution.

Doing more with less
The district implemented a water budget-based rate structure and was the only agency in San Diego County to do so. Rather than require all customers to cut water use by 20%, which punishes those customers who already use water sparingly and lets flagrant wasters off the hook, these water budgets provide a reasonable daily allocation of water.

Customers are allocated a certain number of gallons per household per day. That number is based on a property’s landscape size and the individual characteristics of the property. Customers in a fire-prone area, for instance, may need additional water for landscape irrigation to comply with county ordinances for erosion control or defensible space. This holds everyone to a reasonable standard of efficient water use. Wilson thinks more agencies will adopt this rate structure in the next five years across the state.

“We are proud of our decision to develop these rates, which we fashioned after the rate structure used by Irvine Ranch Water District in Orange County,” he said. “It is hard to do and requires a lot of programming. Our IT staff has to deal with variable billing structures and different bills for different customers, but we realized it was the fairest solution.”

It is a five-tier rate structure. Tier 1 contains low-cost water for a customer’s indoor use. Tiers 2 through 5 contain water for landscape irrigation, but the water is more expensive in each successive tier to encourage customers to conserve.

“In Southern California, 50% to 70% of urban water use is for landscape irrigation,” said Mike Uhrhammer, director of communications. “That is the place to look for savings, whether it is for mandatory conservation now or a permanent reduction in water use.”

Padre Dam also encourages conservation by offering rebates to customers who purchase water-efficient fixtures, appliances, and irrigation equipment. Showerheads and toilets were the focus over the last 15 years. Now the focus has shifted to water-efficient clothes washers, weather-based irrigation controllers, stream-rotor sprinklers, and drip irrigation.

“Our water-budget rate program promotes sustainable water use specifically because it gives customers the incentive to convert to drought-tolerant landscaping for permanent long-term water savings and savings on their water bill,” said Wilson.

A new day ahead
Despite the challenges, Padre Dam is pressing forward with various investments. In 2007, the district’s board of directors approved its five-year business plan and budget, which increased the funding available for preventive maintenance. Just a few months ago, the district issued $53 million in bonds to fund construction of five reservoir tanks and a new connection to a second source of water for the customers in the eastern half of Padre Dam’s service territory.

Earlier this year, Padre Dam’s Santee Lakes entered into a power purchasing agreement with Sun Edison and constructed an 862 KW solar energy system that will provide over 50% of the park’s electricity and covered storage for 300 recreation vehicles.

Next summer, the district will go live with its new, automated water meters. AMR technology will provide the district and customers with online access to daily and hourly water-use data, which will make it possible to detect customer water leaks within days instead of months, and allow customers to manage their water use.

“The system will show us if someone is using water 24 hours a day. If water usage continues nonstop for more than a day, you can be pretty sure there is a leak somewhere on the customer’s property,” Wilson said.

Although some may question why Padre Dam is going ahead with these upgrades at a time like this, Wilson said this might be the best opportunity ever to push forward.

“We’re finding that issuing these contracts now is saving us 30% to 40% because it is a favorable bidding environment. We also received a favorable interest rate on the bonds. That will benefit the customer,” he said.

“Our philosophy in our five-year business plan and budget is that long-term preventive maintenance is in the best interest of our customers. Financing allows us to distribute project costs fairly across the generations of customers who will benefit. When we look back on this effort, we will be able to say this was a great time to invest in the needs of tomorrow,” Wilson concluded.