Tri-Valley cities are set to see a 5.5% rise in the annual rates for wholesale water services from the Zone 7 Water Agency for each of the next four years after its Board of Directors voted 5-2 to approve the price increase last week.
Intended to help fund water treatment efforts and regional supply projects as well as maintain Zone 7 operations and reserves, the first new rate will go into effect in February and each subsequent rate increase will occur on Jan. 1 of each year.
The board adopted the wholesale water rates for calendar years 2023 to 2026, but the agency is planning on revisiting the rate schedule for the years 2025 and 2026 through a public process, with any changed rates adopted by November 2024.
Retailers affected by these changes are the cities of Pleasanton and Livermore, Dublin San Ramon Services District and California Water Service in Livermore.
Zone 7 sells water wholesale to the local water service providers, with the Zone 7 costs effectively passed through to customers via their water bills.
According to a news release from Zone 7, the new rate schedule was set through a cost-recovery analysis and public review process with the board having held four separate public meetings to review rates.
"Zone 7 studied the need for rate adjustments in consideration of the rising costs of importing water, operations, maintenance, environmental and regulatory compliance -- ensuring treated water rates keep pace with the increasing costs to provide safe, reliable water," according to the news release. "The approved rate increase is essential to construct, maintain and repair the crucial infrastructure that keeps customers water safe and consistently flowing to homes and businesses."
According to Zone 7, one of the most significant reasons for the increase is the discovery of PFAS chemicals in areas like the Livermore Valley Groundwater Basin and in certain wells in Pleasanton.
PFAS, technically known as per- and poly-fluoroalkyl substances, are long-lasting, manmade heat-resistant chemicals, components of which break down very slowly over time, according to the U.S. Environmental Protection Agency.
They are commonly used in consumer products to repel water, grease and oil.
"Due to their prolonged use in an array of industrial and consumer products, PFAS are being detected in water sources throughout the United States, including the Livermore Valley Groundwater Basin," according to Zone 7 officials. "Despite playing no role in releasing PFAS into the environment, water providers like Zone 7 must find ways to remove it from their local water supplies to ensure public health."
Two percent of the rate increase will go toward funding capital costs and ongoing maintenance of two treatment projects that will remove PFAS from potable wells.
"These treatment projects will allow Zone 7 to meet the upcoming regulatory requirements and keep vital production wells in service which pump groundwater for the Tri-Valley -- a critical water supply source for the region during the drought," officials said.
Another 1.5% will fund continued participation in two water supply reliability projects; the Los Vaqueros Reservoir expansion project and the Delta conveyance project.
The Los Vaqueros project will increase local storage and build new conveyance. The Delta project will update aging State Water Project infrastructure, from which Zone 7 gets 80% of its water, to be more resilient to climate change as well as protect it from seismic risk.
The remaining 2% from the increased rates will be allocated to maintaining adequate reserves, funding capital improvement projects and the operation, maintenance and administration of Zone 7s water system, according to the news release.
During the Nov. 16 meeting, Board President Sarah Palmer originally made a motion to choose a different scenario in which the rates would have gone up to 7.5%, which would have helped give some of the projects more funding.
That motion was brought to a vote but failed after Vice President Sandy Figuers and Director Dennis Gambs had abstained and four of the other directors voted No -- Director Laurene Green was the only one who voted Yes.
Before the 5.5% scenario was brought up, Green had tried to reach a compromise with 6.25% so that more funding would go toward more projects like the PFAS treatment but her motion was not seconded to be brought to a vote.
Green said she wasn't happy with the low 5.5% and told the board that she did not like to defer funding for future projects. She and Director Olivia Sanwong were the two who voted No on the 5.5% increase.