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PUC staff flags $41M water revenue shortfall, commission discusses rate alternatives
Summary
Staff told the commission the water enterprise faces an approximate $41 million current‑year variance and wastewater about $23 million; commissioners discussed mid‑cycle policy reviews and alternatives to per‑gallon rate structures to resolve conservation‑driven revenue gaps.
San Francisco — At its Jan. 27 meeting the San Francisco Public Utilities Commission reviewed mid‑cycle budget issues driven in part by stronger‑than‑expected conservation.
Charles Pearl, Deputy Chief Financial Officer, previewed Q2 financials and said the water enterprise faces an estimated $41 million variance for the current year and the wastewater enterprise about $23 million; some debt‑service savings of roughly $8 million are available and fund balances can cover the near‑term shortfall. Pearl said staff also expects to recover a portion of the water shortfall from wholesale customers via reset rates planned for later in the year.
Nancy Hama, interim AGM and CFO, proposed a policy‑by‑policy monthly review to measure implementation against the Commission’s Strategic Sustainability Plan and inform mid‑cycle adjustments. Commissioners debated rate‑structure approaches to address the revenue impact of successful conservation programs, including options to increase fixed charges, implement an opt‑in water‑budget model or create a conservation charge that offsets lost volumetric revenues while preserving conservation incentives.
One commissioner noted any change will affect wastewater revenues as well and urged careful study and outreach; staff said a formal rate policy review is scheduled for February. No immediate rate change was adopted; staff will bring proposals and additional financial detail in forthcoming meetings.
