LADWP advances local supply shift with $2.28 billion water budget and 2025 management plan

LADWP advances local supply shift with $2.28 billion water budget and 2025 management planThe Los Angeles utility has greenlit its fiscal 2026-2027 spending plan and 25-year water roadmap, heavily funding groundwater remediation and water reuse projects while projecting completely flat demand through 2050.

The $2.28 billion water budget includes $687 million for water quality projects, such as the Fairmont Sedimentation Plant and a 40,000 acre-foot-per-year groundwater replenishment initiative.

LADWP expects local groundwater and recycled water to make up 20% of its supply in the coming fiscal year, nearly tripling the 8% average of the past five years.

The newly adopted 2025 Urban Water Management Plan projects water demand will remain steady over the next 25 years despite an anticipated population growth of 500,000.

Water rates will see a slight decrease in July, with the utility noting that more than 50% of residential customers use less than 10 billing units per month.

The Los Angeles Department of Water and Power (LADWP) Board of Commissioners unanimously approved a $2.28 billion water system budget for fiscal year 2026-2027 on May 12, alongside the adoption of the utility's 2025 Urban Water Management Plan (UWMP). The funding package features $766 million for infrastructure and $687 million for water quality. Capital targets for the year include replacing 240,000 feet of mainline pipe and 34,000 meters. Major project allocations feature the Fairmont Sedimentation Plant, designed to pretreat up to 465 million gallons per day from the LA Aqueduct, and the Groundwater Replenishment Project, which targets 40,000 acre-feet per year of purified recycled water to serve approximately 500,000 customers. The spending reflects a rapid pivot away from imported water. According to the budget presentation, purchased water from the Metropolitan Water District is forecasted to drop from a five-year average of 54% of LADWP's portfolio down to 28% for the upcoming fiscal year based on average hydrology. Conversely, local groundwater and recycled water are expected to jump from 8% to 20%. Supporting this local transition, interim management reported that the North Hollywood West groundwater remediation facility recently completed its 90-day commissioning. Built entirely by LADWP staff, it is the first of three planned facilities designed to remove contaminants from the San Fernando Basin. The remaining two larger plants—the Tujunga Centralized Facility and North Hollywood Central Facility—are expected to be completed later this year. The newly adopted 2025 UWMP maps the utility's supply strategy out to 2050. A staff presentation highlighted that overall water demand is projected to remain flat over the next 25 years, despite an expected population increase of nearly half a million residents. To maintain eligibility for state grants, the plan will be submitted to the California Department of Water Resources ahead of a July 1 statutory deadline. Despite the heavy capital program, the water system's combined operations, maintenance, and capital budget decreased by $26 million compared to the preliminary budget. Ratepayers will not face a water rate hike in the upcoming year; the average residential bill for 10 billing units is scheduled to drop slightly from $127 to $126 in July. The Office of Public Accountability reviewed the budget and recommended its approval, noting the favorable rate trajectory compared to the utility's concurrent power system investments.