Irvine Ranch Water District

Financial Stability of Budget-Based Rates

IRWD assesses a monthly fixed charge based upon meter size. This fixed charge provides adequate funding for all operating and maintenance costs other than the water commodity itself and the District’s water use efficiency and related programs. As such, IRWD enjoys revenue stability regardless of the amount of water sold or the degree of conservation experienced from customers’ water use efficiency practices.

Rates are established based upon the cost of service associated with each tier. Lower cost sources of water are allocated to the Low Volume and Base Rate tiers. The higher cost of imported water and increased reliability from the IRWD water banking program is allocated to customers in the Inefficient and Wasteful tiers. General conservation costs are allocated to all tiers. IRWD specifically targets customers in the Inefficient and Wasteful tiers for additional conservation outreach, and so those costs in addition to costs for IRWD’s urban runoff source control and water treatment programs, are allocated to the Inefficient and Wasteful tiers. The rate structure is designed to derive sufficient revenues from the over- allocation use tiers to fund these programs. The table below shows how the FY 2015-2016 rates were calculated based off of the different types of costs. The volumetric charges in each tier of IRWD’s BBRs are also shown in Examples of Budget-Based Rates Tier Structures.

Conservation Signals in Water Bills

Individual customers are assigned water budgets or allocations based on reasonable, efficient water use specific to their property and water use needs. Customers using water within their allocation enjoy the benefit of lower water rates as shown in the Efficient Customer example below. In this example, the Efficient Customer used water within their 11 ccf allocation for the billing period, and received a total water bill of $25.57. During the same billing period a Wasteful Customer, shown in another figure, with an allocation of 11 ccf but usage of 20 ccf would receive a water bill for $113.90.