Irvine Ranch Water District

Water Budget Development

IRWD has taken many steps to encourage water use efficiency and preserve California’s water supplies as a long-term water management strategy. A key component of IRWD’s water use efficiency efforts is its BBR structure, which discourages overuse through meaningful tiered pricing for inefficient water use. IRWD set an aggressive tone to promote the efficient use of all water resources beginning in the late 1980’s and into the drought of the early 1990’s. This effort culminated in the adoption of the BBR structure by the IRWD Board in 1991. As of January 2016, it has resulted in a 50% reduction in residential per capita water use since adoption. The rate structure was designed by the District for use on an ongoing basis as part of its long-term, sustained approach to promoting water use efficiency and financial stability.

Since establishment of the BBR structure in 1991, four additional rate areas (due to consolidations) have been brought onto the tiered rate structure (see outreach for transitioning some of these areas in Customer Outreach, Support, and Service ». While each area had a unique customer culture and physical differences, such as predominantly large lot sizes or horses, each transition followed the basic strategy outlined below to ensure customer data accuracy and proactive customer outreach prior to the rates becoming effective. The methods employed by IRWD for each transition have proven successful and preemptively mitigated potential customer bill complaints.

IRWD’s BBR structure was instituted to promote the efficient use of water and at the same time provide financial stability. It is designed to provide customers with a significant economic incentive to use only the amount of water required to serve indoor, landscape, commercial/industrial, and institutional demands. This is accomplished by setting a customized allocation for each customer account that is based upon a variety of factors such as: irrigated area, daily weather characteristics, number of residents, industrial or commercial business type, and other more unique characteristics such as swimming pools, livestock, or specialized industrial equipment. Water is sold to customers under a four-tier structure (see Examples of Budget-Based Rates Tier Structures ») based upon their monthly allocation which varies for landscape use relative to weather patterns.

Following are descriptions of the technical information and data used by IRWD to establish water budgets:

Landscape Measurements

Landscape measurement data is integral to establishing appropriate water allocations. IRWD has employed several methods to obtain landscape measurements in preparation of transitioning portions of the service area onto the BBR structure. See the Excel workbook » used to estimate the initial (i.e., base) outdoor potable water allocation. Also, see the California Water Code Requirements section below with the water budget formula.

Aerial Imagery and GIS Measurements: This approach may be the most efficient method where a one-to- one relationship between meter and parcel exists. Multiple meters to a parcel or multiple parcels to a meter add complexity making it difficult to determine the irrigation boundary lines. Field measurements may be employed to follow up if these issues exist.

Use of Parcel Data and Regression Formula: IRWD developed a methodology to develop irrigated area for residential customers based on County assessor parcel size. See the paper on landscape sizing in Santa Ana Heights (an area ultimately transitioned to BBRs in 2004) for more detailed information on this method and how an outdoor allocation is calculated.

Field Measurements: Depending on the scale of the project and number of sites that need to be measured, this may be the most time consuming method. However, in areas with many slopes, tree canopy and indistinct irrigation line boundaries, this is the most accurate method. Field measurements allow verification of irrigation boundaries and identify which meter supplies the area. Field staff turn on the irrigation system to determine which meter provides the supply. The irrigated area can then be measured using a measuring wheel or the areas may be indicated on an aerial map for measurement using GIS. The latter method is not recommended for sloped areas.

Customer Self-Reported Data: This method is used after going live as part of the maintenance phase of a BBR structure. Residential customers may submit a variance form to change their outdoor allocation based on a new acreage value if their landscape area was miscalculated or has changed. Staff uses GIS to verify the customer’s measurements prior to updating the account. Large landscape customers may submit an acre change request form to change the irrigated area on file. This form requires the customer to measure the irrigated area for each irrigation controller station in square feet. IRWD staff then verify a random representative portion of the stations. Customers may submit an aerial map with the acre change request form and staff may use GIS to verify the customer’s measurements. If the measurements are less than 10% over or under the customers’ submitted acreage, the new total acreage is accepted and applied to the account. Measurements that are greater than 10% over or under IRWD’s measurement require the total area to be verified by IRWD. If the result it greater than the 10% threshold, IRWD’s measurement is used for the new acreage. Examples of these variance forms are included in Variances and Long-Term Maintenance»

Indoor Data
Using Census population data for the area, a default number of people was established for each dwelling type. IRWD rounds up to whole people. Customers with more residents than the default can file a variance for additional people. When transitioning an area onto the BBR structure the default number of people is assumed for all accounts. This information is updated during the Pre-Go Live Outreach discussed in Customer Outreach, Support, and Service »

California Water Code Requirements

IRWD’s BBR structure includes the following elements which meet the requirements of Chapter 3.4, Sections 370 -374 of the California Water Code:

1. Monthly billing is based on metered water use.

2. A basic allocation, representing reasonable use is calculated for each individual customer based using the following formula and factors:
Allocation = Kc × ET × LA + Indoor Use (if applicable) Efficiency
Kc = Crop Coefficient: The relative amount of water needed to irrigate the landscape.
ET = Reference evapotranspiration: The amount of water that evaporates into the air and the amount of water that is transpired through the vegetation.
Evapotranspiration values are computed daily from IRWD’s three weather stations.
Indoor Use: Based on number of people per household for residential accounts. Based on number of employees and business process water for commercial/industrial accounts.
LA = Landscape area of the specific property in acres.
Efficiency = Application efficiency. This is the efficiency of the irrigation system.

3. A basic charge is established for use within allocation. Usage within the first 40% of the basic use allocation represents superior conservation efforts and the applicable rate for this use is based upon IRWD’s lowest cost source of supply, as shown in Examples of Budget-Based Rates Tier Stuctures »

4. All increments of use above the basic allocation are based on the next level of efficiency or inefficiency and are calculated as a%age of the allocation. Costs are based on the incremental cost of service required to meet those demands, and to encourage the efficient use of water consistent with Section 2 of Article X of the California Constitution. IRWD’s residential detached commodity rates and% of base allocation, effective July 1, 2016 are shown in
Examples of Budget-Based Rates Tier Structures »

IRWD’s water budget is also described in further detail in a staff training material referenced in Customer Outreach, Support, and Service »

Modifications
When the rate structure was first adopted in 1991, allocations were set to reflect reasonable use at that time. The rate structure was modified in 2009 to reflect the 2007-2009 drought, as well as changes to the plumbing code and ongoing conservation efforts that resulted in a certain level of demand hardening. The indoor allocations were further reduced effective July 1, 2014 in response to the 2012-2016 statewide drought. In 2015, worsening of the drought led to a mandated statewide reduction of 25% of potable urban water uses from 2013 levels. IRWD’s mandatory reduction to achieve by February 2016 was 16%. Water budgets for outdoor potable water use were reduced effective July 1, 2015 to reflect a shift away from turf grass to the use of climate-appropriate, drought tolerant landscapes in California. A summary of water budget modifications through time is presented in the table below.

July 1, 1991	75	100% cool-season turf 80% irrigation efficiency	100%
July 1, 2009	55	100% warm-season turf 71% irrigation efficiency	100%
July 1, 2014	50	100% warm-season turf 71% irrigation efficiency	58%
July 1, 2015	50	Potable Water: Drought tolerant plants 85% efficiency Recycled Water – No Change: 100% warm-season turf 71% efficiency	58% 92%
July 1, 2016	50	Potable Water: 60% drought tolerant plants 40% warm-season turf 80% efficiencyRecycled Water 100% warm-season turf 75% efficiency	75% 87%

Recycled Water Customers

Recycled water customers have also been on the BBR structure since the structure was first implemented in 1991. Recycled water budgets were established on the same basis as potable water. Prior to 2003, the allocations for recycled water customers were seasonal and only in effect during summer months. This created confusion for landscapers maintaining both potable and recycled water accounts, and so the seasonal allocations for recycled water irrigation accounts were removed. It also reinforced IRWD’s message that all water is a valuable resource and should not be wasted. In 2015, in response to California’s statewide drought, potable water budgets were reduced, but recycled water budgets were unchanged. This was because recycled water is a more drought proof supply than water. Studies have been important to IRWD’s BBRs; for example, a Request for Proposal for a cost of service and rate study design in 2014 asked for a review of recycled water rates and related charges.

Commercial, Industrial, and Institutional Customers

Setting Up the Base Index
When a new Commercial, Industrial, Institutional (CII) account starts service, it is billed at a uniform-rate for the first 6 months without incurring any overuse charges. Every month, a 6-month usage history report is generated for all accounts that are still on uniform-rate billing. The 6-month usage history report includes the move-in date, account number, account name, service address, service agreement type, landscape acres, building age, meter size, and ET zone.

Each customer needs to be assigned a monthly water budget for each month of the year since business needs can vary significantly over the course of a year. An account that serves both the indoor and irrigation use needs to be established as a “mixed-use” account.

Aside from leaks or over watering, unusual increases or changes in usage may be caused by changes in staffing or changes to industrial processes. To assess these changes, an on-site audit is performed by Water Efficiency department.

The water budget is the monthly indoor allocation only. To determine the monthly water budget, staff uses the historical water use. If the usage is consistent the water budget is set with a small buffer based on the 6 month trend that is large enough to account for growing business needs, but small enough that a leak would cause the budget to be exceeded. If the first 6 months of usage is inconsistent or has a widely varying usage pattern, the customer is contacted for a site survey. Occasionally, an account may begin water service prior to opening for business and be under-budgeted. This is typical with restaurants. When the restaurant finally opens for business their usage can greatly exceed their budget causing a significant increase to their water cost. This usually triggers a request from the customer for a review. This is an excellent opportunity to meet with the customer, explain the rate structure, and identify any additional water savings measures that could be implemented at the site. The customer may also be targeted by IRWD based on the monthly outreach to over-allocation customers.

Accounts that have outdoor use as well as indoor are considered mixed-use and require a more sophisticated approach. To calculate the estimated outdoor allocation each month, IRWD uses the landscape acreage and historical ET data to create an outdoor allocation. This outdoor allocation is then subtracted from the historical monthly usage. The result is then used to determine the monthly base index or indoor portion of the allocation.
Once the mixed-use account is set up, it will bill the outdoor allocation using real time evapotranspiration data and the account acres. This allocation changes each month depending on weather changes while the base index or indoor portion, remains constant throughout the year. The outdoor allocation is also subtracted from the account’s sewer billing which is based, in part, on volume consumed.