Understanding Water Budgets

LVMWD’s water shortage response framework, as adopted on March 10, 2009 and reaffirmed by the Board of Directors on April 14, 2009, assigns water budgets to individual customer accounts and assesses an over-budget surcharge. This action was taken as Metropolitan Water District of Southern California called a Regional Shortage Level 2 response to the state’s water shortage, effectively reducing potable water available for LVMWD’s customers. Water budgets will go into effect July 1st.

Sections 1 through 3 below summarize the framework methodology for developing individual water budgets.

1. Determination of net supply available for allocation to customers.

Net supply available to LVMWD customers is determined by adding local supplies to MWD’s allocation and discounting the total by an operational demand factor of 7.5% to account for all non-billed system demand (e.g., fire protection, system loss). Table A summarizes the net supply that would be available for allocation to customers.

Table A – Net Water Supply Available to LVMWD Customers

2. Allocation of net supply to LVMWD customer classifications.

The net supply is further allocated to each of four customer classifications based on 2008 usage ratios, minimum health & safety demands for single family residential (96 units/year) and multi-family (72 units/dwelling-unit/year) accounts, and an indoor/other allowance for commercial accounts. Table B summarizes the allocations assigned to each customer classification.

Table B – Supply Allocations to Customer Classifications

There are differences in the degree of impact due to the ratio of minimum indoor/other usage versus outdoor usage. Multi-family accounts are least impacted because the majority of usage is accounted for as indoor health & safety; each dwelling unit will maintain a minimum budget of 72 units for a 12-month period. Conversely, irrigation accounts are most impacted because all usage is attributed to outdoor use. 
 
3. Assignment of customer water budgets.

Finally, the customer classification allocations listed in Table B are distributed to individual customer water budgets based on criteria presented in Table C.

Table C – Water Budget Criteria by Customer Classification

Single family residential and multi family accounts maintain a minimum budget for indoor health & safety use across all Regional Shortage Levels. The remaining volume is attributed to outdoor use, and is budgeted across billing cycles using an evapo-transpiration (ET) factor to account for seasonal differences in irrigation demand. The ET factor for a bill period is represented as a percentage of total annual ET demand based on five year (2004~2008) daily ET averages.

In addition to minimum indoor usage and outdoor ET, single family residential water budgets are determined by lot parcel size. Customers are assigned to one of twelve parcel range groups listed in Table D.

Commercial water budgets are a percentage of the customer’s 2008 total usage. To account for indoor and “other” usage, commercial accounts are allowed a water hardening credit adjustment of 9.5% for Level 2. For example, under a Level 2 shortage a 12-month commercial account water budget of 1,095 units would be 1,000 units without the 9.5% adjustment. The budget amount for each bill period is based on 2008 usage patterns, not ET.

Irrigation water budgets are a percentage of the customer’s 2008 total usage. The water budget for each bill period is determined as a percentage of total annual ET.

Table D – Water Budget Parcel Groups for Single Family Residential Accounts

Over-budget Surcharge

Customers who consume no more water than their budget will pay normal rates and charges. Customers who consume more than their water budget will be assessed a surcharge of $3.00 per HCF for usage above the budget. Proceeds collected as a result of a surcharge will be used to pay penalties assessed by Metropolitan, to stabilize rates, to support water conservation programs, and at the discretion of the Board of Directors, to rebate surcharges to customers.