South Feather Water and Power Agency seeks fee increase

OROVILLE — The South Feather Water and Power Agency is seeking to restructure its fees to achieve fiscal solvency by covering a $3.53 million cost gap in its water division that, if not covered, could lead the agency to deplete its cash reserves by 2025.

General Manager Rath Moseley presented the proposed fee changes to the district’s rate payers Thursday in a workshop, in which board members heard concerns by residents in advance of a final proposal in about two months, aiming for an effective date of Jan 1, 2025.

Recently incurred costs are considered in the new proposed fees including a debt taken in 2018, new state compliance mandates requiring construction, aging infrastructure failures, adding new connections and other operating costs not yet accounted for.

“Everything is rising, except rates,” Moseley said.

A graphic shows the difference in revenues and costs for the South Feather Power and Water Agency. (South Feather Power and Water Agency/Contributed)

The agency raised its rates in 2020 after not doing so since 1993; a change from $15 to $19 per month for domestic water users and $17.50 to $21.50 per month for irrigation users.

The agency will need to make up about $22.47 per month per rate payer by 2028 to cover its cost gap if subsidized by its power division’s hydroelectric power sales — a historical average of $1.5 million per month.

To achieve this, fee changes for water usage include:

Potable rates

• Multi-family from $7.90 per unit to $25.41 by 2028

• Three quarter inch and below meters from $19.00 per unit to $33.88 by 2028

Non-potable rates

• Three quarter inch and below from $21.50 per unit to $33.88 by 2028.

• Miners inch accounts with a flat rate of $21.50 to $58.85; and $1.95 per miner’s inch to $6.58 by 2028.

• Flat rate accounts from $60.50 to $146.94 by 2028.

• Volumetric rate meters from $0.0867 per 100 cubic feet to $0.3046 by 2028.

Rates for larger meters can be found at southfeather.com.

Historically, the agency’s water rates have been comparatively low because it’s been subsidized by hydroelectric power sales; however, this may have underestimated the initial rates imposed by the agency.

According to Moseley, an engineering study in 2006 overestimated revenue from sales at around $51 million. When actual returns came in, they produced less then half of what was predicted — between $10 to $25 million — suggesting that rates should have been set initially higher to accommodate costs.

The new fee study now considers what costs would be without that subsidy, resulting in a gap of $39.66 per month per rate payer compared to $22.47 with subsidies.

Moseley said the largest users of potable water are on a declining tier — they pay less in volume they more they use — account for the highest costs of the agency.

The agency’s declining tier — accounting for about 3.6% pay less in volume the more they use — also excludes it from any grant opportunities because it is not optimized for water conservation.

Residents said they appreciated the presented information; some had disagreements on how the fee study was constructed, while other supported the fees saying they have historically enjoyed low rates.

Moseley said the board will consider these factors as it prepares for a final fee structure in the coming months.