SECTIONS 370-374 - California Statutes

WATER CODE

SECTION 370-374

370. The Legislature hereby finds and declares all of the
following:
(a) The use of allocation-based conservation water pricing by
public entities that sell and distribute water is one effective means
by which waste or unreasonable use of water can be prevented and
water can be saved in the interest of the people and for the public
welfare, within the contemplation of Section 2 of Article X of the
California Constitution.
(b) It is in the best interest of the people of California to
encourage public entities to voluntarily use allocation-based
conservation water pricing, tailored to local needs and conditions,
as a means of increasing efficient uses of water, and further
discouraging wasteful or unreasonable use of water under both normal
and dry-year hydrologic conditions.
(c) The Legislature intends that allocation-based conservation
water pricing is an alternative method that can be used by public
entities to encourage water users to conserve water, increase
efficient uses of water, and further discourage waste of water. The
Legislature does not intend to limit the discretion of public
entities to evaluate and select among different methods for
conserving water or to create a presumption that the election to not
use a particular method is a waste or unreasonable use of water by
the public entity.
(d) Nothing in this chapter is intended to limit, or dictate, the
design of rate structures that public entities may use to promote
conservation by water users.
(e) Nothing in this chapter directs, or otherwise compels, a
public entity to use allocation-based conservation water pricing.

371. For purposes of this chapter, the following terms have the
following meanings:
(a) "Allocation-based conservation water pricing" means a retail
water rate structure that meets all of the criteria in Section 372.
(b) "Basic charge" means a volumetric unit charge for the cost of
water service other than any fixed costs that are recovered through
meter charges or other fixed charges other than incremental costs
that are recovered through conservation charges. A basic charge may
include the cost of generally applicable conservation measures
assumed in establishing basic use allocations.
(c) "Conservation charge" means a volumetric unit charge for
incremental costs.
(d) "Incremental costs" means the costs of water service,
including capital costs, that the public entity incurs directly, or
by contract, as a result of the use of water in excess of the basic
use allocation or to implement water conservation or demand
management measures employed to increase efficient uses of water, and
further discourage the wasteful or unreasonable use of water, and
may include any of the following:
(1) Conservation best management practices, conservation
education, irrigation controls and other conservation devices, and
other demand management measures.
(2) Water system retrofitting, dual plumbing and facilities for
production, distribution, and all uses of recycled water and other
alternative water supplies.
(3) Projects and programs for prevention, control, or treatment of
the runoff of water from irrigation and other outdoor water uses.
Incremental costs shall not include the costs of stormwater
management systems and programs.
(4) Securing dry-year water supply arrangements.
(5) Procuring water supplies to satisfy increments of water use in
excess of the basic use allocations for the customers of the public
entity, including supply or capacity contracts for water supply
rights or entitlements and related energy costs for water delivery.
(e) "Public entity" means a city, whether general law or
chartered, county, city and county, special district, agency,
authority, any other municipal public corporation or district, or any
other political subdivision of the state that provides retail water
service and that is an urban water supplier, as defined in Section
10617.

372. (a) A public entity may employ allocation-based conservation
water pricing that meets all of the following criteria:
(1) Billing is based on metered water use.
(2) A basic use allocation is established for each customer
account that provides a reasonable amount of water for the customer's
needs and property characteristics. Factors used to determine the
basic use allocation may include, but are not limited to, the number
of occupants, the type or classification of use, the size of lot or
irrigated area, and the local climate data for the billing period.
Nothing in this chapter prohibits a customer of the public entity
from challenging whether the basic use allocation established for
that customer's account is reasonable under the circumstances.
Nothing in this chapter is intended to permit public entities to
limit the use of property through the establishment of a basic use
allocation.
(3) A basic charge is imposed for all water used within the
customer's basic use allocation, except that at the option of the
public entity, a lower rate may be applied to any portion of the
basic use allocation that the public entity has determined to
represent superior or more than reasonable conservation efforts.
(4) A conservation charge shall be imposed on all increments of
water use in excess of the basic use allocation. The increments may
be fixed or may be determined on a percentage or any other basis,
without limitation on the number of increments, or any requirement
that the increments or conservation charges be sized, or ascend
uniformly, or in a specified relationship. The volumetric prices for
the lowest through the highest priced increments shall be established
in an ascending relationship that is economically structured to
encourage conservation and reduce the inefficient use of water,
consistent with Section 2 of Article X of the California
Constitution.
(b) (1) Except as specified in subdivision (a), the design of an
allocation-based conservation pricing rate structure shall be
determined in the discretion of the public entity.
(2) The public entity may impose meter charges or other fixed
charges to recover fixed costs of water service in addition to the
allocation-based conservation pricing rate structure.
(c) A public entity may use one or more allocation-based
conservation water pricing structures for any class of municipal or
other service that the public entity provides.

373. (a) Revenues derived from allocation-based conservation water
pricing shall not exceed the reasonable cost of water service
including basic costs and incremental costs. This chapter does not
limit the sources of funding for incremental costs to charges for
water use.
(b) Revenues derived from allocation-based conservation water
pricing shall not exceed the proportional cost of service
attributable to the customer's parcel, as determined by giving
consideration to all of the following:
(1) Customer classes established in consideration of service
characteristics, demand patterns, and other factors.
(2) Basic use allocations.
(3) Meter size.
(4) Metered volume of water consumed.
(5) The public entity's discretionary allocation of incremental
costs between and among the increments of water use subject to
conservation charges, as permitted by paragraph (4) of subdivision
(a) of Section 372 to meet the requirement of that section.
(c) In establishing the schedule of charges and metered volumes
for the increments of water use subject to conservation charges, the
public entity may also consider both of the following:
(1) Customer overuse characteristics, including ratios between
overuse volumes and basic use allocations, variations in demand and
consumption patterns, or other characteristics of overuse experienced
by the public entity.
(2) The extent to which the pricing structure of the increments
will be effective in minimizing or eliminating the need for other
measures to curtail potential overuse.

374. (a) Allocation-based conservation water pricing under this
chapter may be used on an ongoing basis and shall not require any
finding of emergency or other water shortage conditions.
(b) The authority granted in this chapter is in addition to any
other authority that a public entity has to use rate structure design
to foster the conservation of water.
(c) The imposition and revision of rates and charges by a public
entity under this chapter shall be subject to the procedures
otherwise required by law for the public entity's water rates.