Councilor David Izraelevitz: Water Rates, Cost Recovery, And Fairness

Los Alamos County Councilor

Over the last few years, most recently last September, a tiered residential water rate was approved by the Board of Public Utilities and subsequently affirmed by the County Council. 

There will be upcoming public hearings by the two bodies about revising these rates given increased costs, and the issue of cost recovery vs. financial impact and fairness is a recurring and appropriate concern. Utilities should pay for themselves in some way; if utilities cost X, we should collect a total of X from its user base. The issue of fairness is more difficult to conceptualize, but I will try to provide one perspective, and Los Alamos being what it is, let’s use a little math.

Currently, every single-family residence with an individual meter pays a flat monthly access fee of $11.40, even if not a drop of water is used. A base rate of $6.02 per 1000 gallons (kGal) applies for all water usage during “non-irrigation” months of November through April. From May to September a tiered schedule is applied; for the first 9000 gallons (9 kGal) of use per month, the water rate remains $6.02/ kGal, for the next 6 kGal used, the rate increases to $6.40/ kGal, and use above that increases further to $7.65/ kGal.

Residential water use is substantially higher in the summer due to irrigation, but personal water use is relatively fixed year-round, so let’s look at the cost of personal water use for the above rate payers (single family residences) when summer rates apply. I was able to go to the county’s  new website to look at my water usage over the last year. This past March, my wife Terry and I used about 2.7 kGals. This winter month was a handy one to use to estimate our base water use as two adults living alone. Excluding taxes, our water bill that month was $27.65 or just under $14 per person.

Let’s see what we might expect when the kids come home to visit during the summer. Given the tiered rates above, and assuming approximately the same usage per person, below is the expected usage (Upper case, adults, lower case children, and two couples have same initials!).

Who is Staying at the Izraelevitz’s?Total Cost Cost Per Person

My three grandchildren are in diapers or finishing toilet training, so we can expect a few more loads of laundry, but on the other hand (a+w) (Audrey and Winnie) are not using the toilet.

Since, in a typical household,  toilet use is about 25% of water usage while laundry is 16%, we are probably not far off the mark in estimating personal water usage.

We see that larger families are charged less per person than smaller families. This is due of course to the flat access fee that each homeowner pays. If we look at total water cost, indeed larger families pay more for personal water use, but on a per-person basis, it is the opposite. Eventually, per person costs will rise with family size, but a family of 13 will nevertheless pay less per person than a family of four during the summer. The discrepancy is even higher in the winter.

There are many factors in designing appropriate cost recovery for a utility with a large fixed cost and relatively low delivery and commodity costs, and similarly many ways to look at fairness factors. I have not addressed single vs. multiple-residence rate, nor residential vs. commercial, but I hope that the above analysis will still suggest some quantitative framework as the Board of Public Utilities, and eventually, the County Council. solicit public comments on this topic over the next few months.