| San Diego’s agricultural industry gets permanent water rate break
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San Diego’s agricultural industry gets permanent water rate break

Avocado, citrus and flower growers, along with other farmers in the San Diego region of California, will soon have the option to choose a permanent reduced agricultural water rate in exchange for lower supply reliability. 

citrus and avocados“Agriculture is a multi-billion-dollar industry here, one of the most valuable ag industries of any county in the country,” said Mike Lee, public affairs manager for the San Diego County Water Authority (Water Authority). “We have a lot of high-value crops. When you go into any of the big box garden centers, many of their starts are from greenhouses and crops in San Diego County.”

The Water Authority, a utility member of the American Water Works Association since 1950, is a public agency that delivers wholesale water to 24 retail agencies within the San Diego region, including cities, special districts and a military base.

Twelve years ago, the Metropolitan Water District of Southern California, which has overlapping service boundaries, discontinued its special interim agricultural water rate program.

Kelley Gage“We had a lot of ag customers in our service area who were not happy to see it end,” said Kelley Gage (pictured right), the Water Authority’s director of water resources. “So, our board decided to offer our own program and phase it out over time.” The program was originally designed to be temporary so the Water Authority could monitor its feasibility.

Farmers who participated in the Metropolitan Water District’s agricultural rates were grandfathered in, and no new farms were added. The Water Authority’s board chose to renew its transitional program several times because of its popularity, but that created a lot of price uncertainty for growers.

Late last year, the Water Authority’s board of directors approved a permanent agricultural rate program that exempts participants from fixed water storage and supply reliability charges. The cost per acre-foot is still being determined, but the agricultural “all-in” rate will likely be close to $1,309 per acre-foot of treated water, roughly 27 percent less than what municipal and industrial users pay, Gage said. And for the first time, it will be open to other eligible farms in the Water Authority’s service area.

In exchange, farmers and growers who participate in the program will see a lower level of water service during shortages or emergencies, allowing the Water Authority to reallocate those supplies to commercial and industrial customers that pay for full reliability benefits.

In the 12 years that the Water Authority has managed the temporary program, it has had to cut back water to participants only twice, Gage said, and that is expected to become even less frequent as customers become more water-efficient and as the Water Authority shores up more reliable supplies.

The permanent rate will go into effect Jan. 1, 2021. For now, water resources staff is refining the permanent program and detailing eligibility requirements.

Though the rate will support all farmers who elect to join, it’ll give an extra boost to one of the region’s oldest and most important crops — avocados. At one time, Gage said, avocados were the county’s main harvest, but they have slim profit margins. As new growers move in and replace avocados with cut flowers, perennials and ornamental bushes, crops with a much higher profit margin, they often have more flexibility to pay higher rates for full water reliability benefits.

“In many ways, avocados are the old guard of San Diego,” Gage said. “This is one way we’re trying to protect those farmers who have been here for generations.”