NID Water Rates Committee Meetings Open to the Public

The Nevada Irrigation District is currently holding meetings of its Water Rates Committee to consider the best approach for implementing a new rate structure. The meeting agendas will be posted on the website, along with a link to participate in the meeting via Zoom.

On Aug. 26, 2020, the Board of Directors approved the recommendation from the Water Rate Committee that the Water Rates Committee continue to meet as needed, and at least once monthly, to discuss a variety of essential rates package topics that influence customer rates. These include rate package term, reserve balance growth, budget expense reduction opportunities, opportunities to increase other revenue sources, opportunities to ensure continued affordability of water, including for agricultural users, and appropriate methods to incorporate administrative costs into a future rates package.

2020 Cost of Service Background

Every five years the Nevada Irrigation District conducts a Cost of Service Study to provide the basis for determining the rates charged to customers for providing water. The District must ensure that operating and capital costs are covered and a sufficient reserve fund is maintained for emergencies. NID is unique in its ability to subsidize the costs to provide water service using hydropower revenues. In fact, the 2020 budget anticipates $13.6 million in hydropower revenues will subsidize the cost to deliver water.

At the March 11, 2020 Board of Directors meeting, Nevada Irrigation District (NID) Directors agreed to receive and file the 2020 Cost of Service Study and begin the 2020 rate setting.

The 2020 Cost of Service Study was completed at the direction of NID’s Board of Directors during the April 24, 2019 Board Meeting. At that meeting the District staff was directed to deliver a new cost of service study in the first quarter of 2020 utilizing a more detailed cost of service study; including specific allocations between raw and treated water customers and the cost to deliver water to raw and treated water customers by water delivery system and zone.

The 2019 Cost of Service Study was a comprehensive analysis of NID’s operations to determine the actual cost to deliver water and how the cost is allocated between the base rate, used to recover fixed cost, and the volume cost, to recover operations and maintenance costs. It also looked at how to determine the cost for raw water vs. drinking water customers. Issues such as fairness and equity in rates, revenue sufficiency, and adequate funding of reserves are addressed in the study.

Public safety and the health of our water system are the highest priorities for NID. The District operates on a promise to provide our customers throughout the foothills of Placer, Nevada and Yuba Counties with a dependable and high-quality supply of drinking and irrigation water.

2019 NID Directors approve lower water rate increases

On April 24, 2019 the NID Board of Directors approved a softer water rate schedule than was initially proposed.The original proposed rate change was for an 89 percent increase over five years, which was calculated based on the Cost of Service study recommendation for customers to meet 77 percent of the cost to deliver water. The remaining cost to deliver water will be covered by transfers from Hydroelectric power sales.

Rate payers will see a 5.72 percent increase each year for three years beginning July 1, 2019.  Overall, the adopted rates reflect slightly more than a 17 percent increase over the next three years for customers.

During discussion on April 24, NID Directors noted that the lower rate increase requires the District to explore possible cost-saving measures to address the revenue impacts to the 2019 budget. In the coming months Directors will reduce the District’s 2019 budget by 5 percent or more and enact financial efficiency measures, while keeping the reliability, safety, and health of the water delivery system the top priority.

The effective date is July 1, 2019.

In order to keep rates as low as possible for customers and allow the District to be flexible with the drought rate components, the new rates package includes:

•  Instead of five years, the new rates will be enacted over three years
• NID staff will develop a program featuring $500,000 to assist low-income customers
• A drought rate will be included, although it will not be assessed this year
• A July 1 effective date provides a two-month period for customer education of rate changes
• A new Cost of Service Study will be developed to include more detailed analysis of what the costs are to deliver water to raw and treated water customers.

Prop 218 Process – Public Hearing and Public Protest Votes

A public hearing on April 24, 2019 followed California’s Prop. 218 requirements, with unlimited public comment and an open, and transparent count of customer protest votes. Thirty-six people spoke during the three-hour meeting followed by a thorough count of customer protest votes. According to Prop 218, if NID received written protests by the majority of customers, it would need to abandon the proposed rate increase. The count, with the assistance of Nevada County employees and overseen by objective observers and news reporters, tallied 4,694 provisional protest votes, which fell short of the 12,500 required to nullify by proposed increase. All protest submissions currently are being validated, and results will be reported after the completion.

View the full water rates schedule here