Many local water districts' rate structures were dealt a blow yesterday by a state appellate court decision.
It ruled that San Juan Capistrano's tiered pricing was illegal. The agency might have to refund millions of dollars. Tiered pricing allows lower usage customers to pay less per unit than higher users. As a resident uses more water, the cost of the additional water increases - kicking customers into higher tiers as they go.
Although the court said tiered pricing isn't illegal, the tiers have to be justified by the actual cost of the water to the district. Simply setting the tiers up as penalties for heavy water users don't comply with the law.
The impact extends far outside the south Orange County city. Governor Brown called the ruling a straightjacket on local government at a time when maximum flexibility is needed. How will water districts respond?
Sanjay Gaur, Senior Manager, Raftelis Financial Consultants, a utility consulting firm
John Perry, Co-founder of the Capistrano Taxpayers Association, which was the plaintiff in this Tiered Pricing lawsuit. Perry is also a City Councilmember
Tim Quinn, Director of the Association of California Water Agencies (ACWA), which filed an amicus brief on behalf of the appellant, the City of San Juan Capistrano