Some residents' water bills may jump 14%

If approved, the increase in July would be one of the largest in the region

“Water utilities have a lot of fixed costs. It doesn't matter if you use a drop of water or a lot of water. There are the dams, the pumps … everything that goes into bringing water to people. Those fixed costs don't go down.”

— Newsha Ajami, water expert at Berkeley Lab

Over a tenth of San Jose's population soon may see their water bills significantly jump if councilmembers approve an increase Tuesday, making it one of the largest rate hikes in the Bay Area this coming year.

Customers of the city-operated San Jose Municipal Water System, which serves about 140,000 city residents, could see a 14% rise in their monthly water bills — roughly $16 extra per month.

Price increases will go into effect July 1 if the San Jose City Council gives the thumbs-up.

Officials blame the cost bump on increasing charges by thirdparty groups who dispense the water, drought-related impacts on supply and usage, and infrastructure improvements that need to be completed.

The city-run system serves customers in North San Jose, Alviso, Evergreen, Edenvale and Coyote Valley.

Despite the rise in prices, water usage is not expected to change in the coming year, officials said. The SJMWS is expecting to bring in an additional $8.9 million from the adjustment.

SJMWS also expects further bill increases in the years ahead, with a minimum 15% jump in 2024, 11.5% in 2025 and then seven years of 10% increases. However, if drought conditions worsen, the numbers could increase even more.

When asked about the price hikes, a spokesperson for the city's Environmental Services Department provided a memo drafted for the council meeting on Tuesday.

The SJMWS gets its water from a variety of third parties, including the San Francisco Public Utilities Commission, the Santa

Clara Valley Water District, South Bay Water Recycling and some groundwater sources.

Other San Jose water service providers also are expecting mod

erate price increases compared to the wider region, according to numbers from the Environmental Services Department.

San Jose Water Company, an investor-owned public utility that serves a majority of the city's residents, is projected to see a 10% increase, which would have to be approved by the California Public Utilities Commission. Similarly, Great Oaks Water Company, which services a small group of 20,000 residents in Blossom Valley, Santa Teresa and Edenvale, is expecting a 10.5% bump.

Outside of San Jose, Santa Clara is expecting a 9% jump, Mountain View 8%, San Francisco and Palo Alto 7%, and Menlo Park and Foster City 5%, according to the department.

The rising costs come as the state has tried to cut back on its water usage in recent years in the midst of severe drought conditions. When usage decreases, however, water service providers must find a way to make up for the lost revenue.

In July 2021, Gov. Gavin Newsom signed an executive order that asked Californians to reduce water usage by 15%. In September of that year, data showed the state's urban residents — who the executive order targeted — had only lowered their usage by a mere 1.8% compared with 2020. In the Bay Area, cutbacks were much better, with San Jose Water Company reporting an 11% decrease and San Francisco at 10% less.

By November 2022, San Jose Water Company customers were able to increase their cutbacks to 19.8%, according to the company's president, Andy Gere. In a March op-ed for The Mercury News, Gere opined that the recent winter storm's deluge of snow was “maybe” going to help with lowering water bills.

The storms enabled water agencies across the region to pull back on drought-related restrictions. In April, the San Jose Water Company announced it was canceling its drought surcharges and dropping rules that limited watering to two days a week.

Newsha Ajami, a water expert at Berkeley Lab, said that more water falling from the sky doesn't translate into cheaper bills.

“Water utilities have a lot of fixed costs,” Ajami said. “It doesn't matter if you use a drop of water or a lot of water. There are the dams, the pumps … everything that goes into bringing water to people. Those fixed costs don't go down.”