IEUA prepares direct billing rate strategy to fund expanding recycled water program

IEUA prepares direct billing rate strategy to fund expanding recycled water programThe California agency is finalizing cost allocation models for its Chino Basin Program and expects to bring a direct billing recommendation to its board later this month to support long-term infrastructure investments.

IEUA completed its foundational analysis for Chino Basin Program cost allocation and direct billing, a first-of-its-kind rate approach for the agency's recycled water expansion.

The agency submitted a 1211 Change of Use petition to the State Water Resources Control Board to repurpose recycled water as feed for its Advanced Water Purification Facility.

In a separate water supply initiative, IEUA member agencies pumped over 7,000 acre-feet of groundwater in Q1 under a Metropolitan Water District dry-year yield call, though board members noted ongoing litigation regarding partner performance.

The Inland Empire Utilities Agency (IEUA) is preparing to overhaul its revenue collection approach to support major investments in its Recycled Water Program and the Chino Basin Program (CBP). During an August 5 workshop, IEUA staff confirmed the completion of a foundational analysis evaluating Chino Basin Program cost allocation and direct billing. Assistant General Manager Lisa Dye noted that this marks the first time the agency has evaluated a specific rate approach to support its expanded recycled water program. Staff worked with special counsel, financial advisors, and rate consultants to develop the strategy and will present an analysis and recommendation to the board later this month. The financial restructuring aligns with advancing physical infrastructure. Acting Deputy General Manager Randy Lee reported that the agency recently submitted a 1211 Change of Use petition to the State Water Resources Control Board. The petition, which is expected to receive a determination within three months, will allow IEUA to repurpose a specified amount of recycled water as feed for its planned full-scale Advanced Water Purification Facility. Design and site preparation for the reuse infrastructure are also progressing. The agency has ordered long-lead items, including reverse osmosis membranes, for its demonstration facility. Meanwhile, geotechnical investigations and approximately 40% of the survey work for the 11-mile Rialto Recycled Water Supplemental Supply Pipeline have been completed in coordination with the City of Rialto. Alongside its reuse initiatives, IEUA is managing an active call on its 25-year Dry-Year Yield Program with the Metropolitan Water District of Southern California (MWD). MWD initiated a call in 2025 for 33,000 acre-feet of groundwater pumping in 2026. Through the first quarter, participating agencies pumped over 7,000 acre-feet, reducing direct imported deliveries by 14,000 acre-feet. The hard cost for the pumped water is $9.84 per acre-foot, offset by a $4.88 per acre-foot operations and maintenance credit. However, the program has faced friction. A board member noted that while participating agencies received $27.5 million in MWD funding for system improvements, there is currently pending litigation regarding performance obligations. "People want to take the benefits of a contract and an agreement, but then they want to try and not perform," the board member stated, emphasizing that partner agencies must fulfill their pumping requirements. Looking ahead, newly appointed General Manager Kevin L. Alexander highlighted future priorities, including optimizing biogas value to stabilize rates and establishing a portfolio management office to handle the agency's growing capital improvement plan.