Metropolitan Water District proposes 9.5% rate hikes as Pure Water EIR secures approval

Metropolitan Water District proposes 9.5% rate hikes as Pure Water EIR secures approvalThe wholesale giant advances its massive potable reuse program with environmental certification and state streamlining, while member agencies brace for significant rate increases in the upcoming biennial budget.

Metropolitan Water District staff proposed 9.5% rate increases for both 2027 and 2028 during a February 10 workshop.

The budget includes funding for Stage 1 design and preconstruction of the 45 MGD Pure Water Southern California facility.

The MWD Board certified the Final EIR for the Pure Water program on February 10, following judicial streamlining certification under SB 149.

Commercial and HOA turf replacement rebates have been reduced from $7 to $4 per square foot after funds were fully reserved.

The Metropolitan Water District of Southern California (MWD) has initiated its biennial budget process with a proposal for significant rate increases to support aging infrastructure and new water supply projects. During a February 11, 2026, meeting of the West Basin Municipal Water District—a member agency of MWD—staff reported that Metropolitan is proposing an overall rate increase of 9.5% in both calendar years 2027 and 2028. According to the update provided by West Basin Senior Water Policy and Resources Analyst Tammy Hurley-Hye, the budget baseline included a combined 15% increase over two years. However, incremental drivers, including capital investment plan (CIP) costs, operating equipment, and staffing, pushed the required increase higher. A key driver identified in the proposal is the funding for "Stage 1 design and preconstruction" of the Pure Water Southern California program, specifically for a 45 million gallon per day (MGD) capacity. If approved, the 9.5% hikes would follow the 8.5% annual increases previously implemented for 2025 and 2026. These rising wholesale costs—driven by inflation, infrastructure needs, and revenue volatility from declining water sales—are typically passed through to Metropolitan's 26 member agencies. Previous adjustments have triggered retail rate increases in service areas like Long Beach and San Diego, raising concerns about affordability and the challenge of balancing fixed costs against successful conservation efforts. The rate proposal follows a major regulatory milestone for the Pure Water program. Hurley-Hye reported that the MWD Board approved and certified the Final Environmental Impact Report (EIR) for the project on February 10. Additionally, the project was certified by the Governor for judicial streamlining under the SB 149 infrastructure streamlining program, which is expected to expedite potential legal challenges related to the California Environmental Quality Act (CEQA). Planning for Direct Potable Reuse (DPR) is also advancing alongside the environmental approvals. Metropolitan has advertised bid packages for testing equipment to facilitate the design of a DPR testing facility. Preliminary findings from studies assessing treated water and raw water augmentation alternatives are anticipated to be available next month. On the conservation front, high demand has forced adjustments to rebate programs. Hurley-Hye noted that funding for turf replacement rebates for Commercial, Industrial, and Institutional (CII) customers and Homeowners Associations (HOAs) has been "fully reserved." Consequently, the rebate amount for these sectors has successfully dropped from $7 per square foot to $4 per square foot. The MWD Board is expected to hold a series of workshops regarding the budget before considering the adoption of the budget and rates on April 14, 2026. West Basin staff indicated that the next workshop is scheduled for February 24.