San Luis Obispo’s grossly unfair water rates

May 31, 2023

Richard Schmidt


Grossly unfair is a good description of San Luis Obispo’s water rates, which charge those practicing water conservation nearly twice the rate of water wasters.

On June 6, the city council plans to raise water rates, making the unfairness even greater. This unfairness concerns me, and I hope it concerns others as well.

Here is an explanation of the issue.

The city bills water by the “unit,” which is 100 cubic feet, or about 750 gallons.

Let’s look at per unit water charges for four “typical” users:

• The “conservation user” who is able to get along on 2 units per month. This is likely a very thrifty conservation-minded householder performing conservation the city asks of her, or someone living in a small rental unit who is possibly economically disadvantaged.

• The “low user” who scrapes by on 4 units per month.

• The “moderate user” with a family who consumes 8 units per month.

• The “water hog” with a large house, pool or spa, and likely a wasteful lawn or moss garden, who consumes 16 units and for whom cost is no matter.

Under the rate schedule staff proposes, 2024 effective costs per unit are:

• “conservation user” = $23.67 per unit.

• “low user” = $16.10 per unit.

• “moderate user” = $12.81 per unit.

• “water hog” = $13.11 per unit.

Methodology for above: sum the per unit water charges per 2024 rate chart, add to “base” $30.25 and divide total by number of units.

This is regressive pricing, not progressive pricing. How is this pricing equitable? How does this promote the city’s desire users be conservation conscious? Clearly there are major problems in the city’s water pricing model.

How did the city’s water pricing get this far off base? The city used to just charge customers for the water they consumed. Then a new fad in pricing got introduced, an additional fixed “base” fee. We were told it would be “just $5” and would not be raised. But once the camel’s nose was in the tent, the fixed fee was raised every year till now staff proposes one that’s six times the promised “forever” $5 fee. In fact, the proposed increase alone is more than the “forever” $5.

It’s the 2024 fixed $30.25 “base” fee that distorts water charges so that they harm the frugal and poor and bless the rich and careless.

There are countless better ways to charge for water. I’ll suggest a couple that occur to me, merely to get some thoughts rolling.

First, there need not be any “base” fee at all. We didn’t used to have a fixed base fee, and got along just fine. Charge people a fair price for what they use, and no more, and problem’s solved. If those rates must be adjusted year to year due to consumption and cost changes, so be it; at least the charges will make sense, which the current charges don’t.

However, there are also fairer “base” rate methods than the city’s fixed $30.25 charge. Here is one idea:

• A variable/graduated base rate indexed to how much water one consumes would promote Equity, fairness, and conservation. An example of how this might work: for the first unit, a $1 “base”; for the second unit, $1.50; for the third, $2; etc., in this example using 50-cent increments for each additional unit of water consumption. The incremental per unit charges would be summed to find the “base” at any particular consumption level. Of course one would not go through this math for every bill: a published “base” rate table would make explicit the “base” for each consumption level. So, for example, for our four hypothetical users, this is how things would play out:

• “conservation user” $2.50 “base” producing effective unit price of $9.79 instead of the proposed $23.67 per unit.

• “low user” $7 “base” with effective unit price $10.29 instead of proposed $16.10.

• “moderate user” $22 “base” with effective unit price $11.78 instead of proposed $12.81.

• “water hog” $76 “base” with effective unit price of $15.97 instead of proposed $13.11.

Those are illustrative numbers only and I don’t pretend they are the “right” ones; analysis would be needed to create a rate schedule. The point is fairer models for charging are possible. The key takeaway is all charges would be related to actual water use.

In a letter to the city council I asked them to use the June 6 rate setting meeting to fix the inequities in city water pricing. In specific, I asked them to take action instead of kicking the can down the road.

A good action, in my mind, would be to reject the proposed water rate changes, togive staff direction to return in 90 days with a rate system that corrects the inequity and anti-progressive features of the present system and which also promotes genuine conservation pricing, and continue present water charges in the interim.

“This is doable despite the 10,000 reasons staff is likely to tell you it’s not. If you agree with my premise the current system is wrong, you must lead and direct staff in order to get the result you want.”

And if you fellow CalCoastians agree we need more fair water charges, I’d urge you to send your thoughts to the council as well. Contact them at

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As usual, Richard Schmidt nails it, the SLO city council needs to stop fixating on woke politics and focus on competently govern in the people’s interest.

We deserve better, and not just on the water issue.

Everything that you need and required to have has gone way up water,sewer ,garbage etc. and the base level has been reduced so after you get over that the price really goes up and of course no one can stay under that base.It amazes me how everything has gone up in price and we have less of things since the Pandemic. It makes you wonder if this was planned to break down the citizens into submission

There is a fixed price to maintain the capital equipment bringing the water to your house regardless of it’s flowing 100000 gallons a month or 10, which is amortized over all users, then the actual water cost. Same thing with electricity. I’m still trying to get over how our HOA with our “own” water system charges $100/month to read the meters every other month and send out a QuickBooks bill.

WATER doesn’t need to be expensive but when it is imported development grows vertical and government expands to manage (count the money). WATER becomes a cash cow along with parking and new fees for everything, just like where we fled from. The developer aren’t necessarily the bad guys, often they are the promoted to lubricate thirsty development, accelerating the pay day for those who cash in and move elsewhere. This isn’t Wall Street, this is the street you call home.