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Growers could pay even more for water

• Rates proposed to offset increasing groundwater pumping costs

POSTED April 3, 2012 9:49 p.m.

An irrigation water price increase for Turlock Irrigation District growers may be steeper than previously proposed.

In dry years, tier 3 water – representing acre-inches 30-42 – could jump from an initially proposed $15 to as much as $20 per acre-foot, with water above 42 inches potentially rising from $20 to $25 acre-foot.

The increased prices were proposed by Director Joe Alamo, to offset the district’s increasing costs to rent groundwater pumps to supplement gravity irrigation in dry years.

Growers who rent pumps to TID currently receive $8 per acre-foot pumped – a rate which has remained stagnant for years. This year, many pump-owners have asked TID for an increase to $10 per acre-foot pumped; the newly proposed rate structure would fund that increase.

TID expects to pump about 60,000 acre-feet of groundwater this year. That means the requested increase in pumping compensation would cost the district $120,000 this year.

By proposing the bracket of price ranges –$15-$20 for Tier 3 and $20-25 for Tier 4 – the district has more time to assess the true costs of groundwater pumping before establishing a final rate structure.

“That allows the decision to roll forward, and then a decision can be made in those brackets,” said Bob Nees, TID assistant general manager of water resources and regulatory affairs.

Directors will ultimately decide on a price structure with rates somewhere within the approved ranges at a 9 a.m. June 12 public hearing at the TID board room, 300 Canal Dr.

“We can always lower it back down,” Alamo said.

 

By-volume pricing forced by state

The district was forced to reexamine its rate structure by an act of the state legislature which requires all irrigation districts to bill customers only for water used. Currently, TID uses an allotment-based structure, where farmers pay a flat rate regardless of how much water they use up to the allotted level.

The proposal calls for growers to pay a base fee of $23 per acre in normal years, followed by a $2 per acre-foot charge for the first 2 acre-feet. The next two acre feet of water would cost $3 each, followed by an acre-foot available at $15. Any remaining water would be charged at $20 per acre-foot.

The change would see a grower who uses 36 inches of water pay $4 more per acre, and growers who use 48 inches or more pay an additional $7 per acre.

Growers would pay more in dry years, as declared by TID directors, to offset the additional costs to the District of pumping groundwater to supplement limited rainfall and snowmelt. The average TID customer already pays about $300 more in a dry year, as allotments are set lower and growers must purchase additional Tier 2 water to nurture crops.

The dry year schedule would see an initial fixed cost of $26 per acre, with one acre-foot of water available for $2. The next 18 inches of water would be charged at $3 per acre-foot, with another acre-foot costing between $15 and $20. Additional water would be charged at $20 to $25 per acre-foot.

In dry years, growers using between 30 and 42 inches of water would ultimately spend an additional $6.50 per acre compared to the current schedule, assuming Tier 3 water is available at $15 per acre-foot.

The rate change would narrow the gap between what the district spends to deliver water and revenues received, but would not eliminate the gap entirely. TID would continue to spend between $300,000 and $500,000 more to deliver water than it generates in revenues annually; it currently spends as much as $2 million more than revenues received.

The increase in revenues already factored in to the new rate structure led Director Charles Fernandes to question the need to increase rates further than the initial proposal.

“It’s not like we’re losing money,” said. “We’d just be giving up a little bit of what the increase would be.”

 

Concerns over base rate structure

Michael Crowell, a former TID director, protested the rate increases at Tuesday’s board meeting. He said the new rate structure unfairly shows preference to farmers who grow more water-efficient crops, when the infrastructure – not the water itself – is the district’s largest cost.

“We’re being made unequal,” Crowell said. “I’m being forced to pay a higher portion of the operation and maintenance costs of the district.”

Crowell advocated informing the State of California that TID would not comply with the new legislation, instead retaining a rate structure which treats all growers equally.

Michael Frantz, chair of the TID board of directors, said that ignoring the state was not an option.

“This board is somewhat stuck in the position of trying to comply with the state and keep our ratepayers happy as well,” Frantz said.

The district will contact all growers in advance of the June 12 rate hearing, and hold public meetings to discuss the plan. The dates for those meetings have yet to be set.

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