The 2022-23 winter delivered an epic series of moisture-laden atmospheric rivers to the West Coast, especially in California. Unlike the previous water year, in which snowfall was abundant early in winter but scarce after early January, the storm train continued into early spring.

By April, snowpack was above normal across nearly the entire West. In some parts of the Sierra Nevada, Great Basin, Utah, Arizona, and western Colorado, the snow-water equivalent reached 300% of normal, setting records, filling reservoirs with snowmelt, and wiping away drought across the West.

Before the deluge of snow and rain, water agencies statewide braced for a third straight dry year in 2023. As part of its collaborative commitment, the Water Authority entered a second one-year agreement with Metropolitan Water District to provide the Water Authority’s Central Valley storage assets for MWD’s benefit. That agreement ensured additional water for MWD, along with more space for MWD to store water – an especially valuable tool once it became clear just how wet the winter would be.

Fed by significant snowmelt, Lake Mead’s elevation increased by more than 10 feet from June 2022 to June 2023, providing a critical opportunity for water agencies to agree on long-term management plans for the river.

The U.S. Bureau of Reclamation reported vastly improved hydrological conditions that also raised Lake Powell by more than 50 feet. Despite the good news, the ongoing trend toward a hotter and drier climate means long-term solutions remain critical. About two-thirds of San Diego County’s supplies are Colorado River water.

Water Authority leaders strongly supported the Lower Basin plan released in May to conserve 3 million acre-feet of Colorado River water through 2026. The proposal relied heavily on voluntary and federally compensated conservation instead of mandatory reductions, and it provided equitable and realistic near-term solutions to keep the river flowing for all users.

The Water Authority applauded the efforts of the Colorado River Board of California, of which the Water Authority is a member, for working closely with the other Lower Basin states to develop a consensus proposal to submit to the U.S. Bureau of Reclamation. The Water Authority has been a long-time advocate of collaboration on the Colorado River, and the proposal was a positive step in the right direction.

The Board of Directors approved wholesale water rates for 2024 in June and the recommended budget for Fiscal Years 2024 and 2025. The budget and rates support continued work on numerous agency priorities, including capital projects critical for maintaining safe and reliable water supplies. The budget and rates package was the most challenging in decades due to extreme inflation over the prior year and depressed water sales due to cool and wet weather. Against that backdrop, the Board prioritized immediate ratepayer relief with a planned withdrawal of nearly $30 million from the Rate Stabilization Fund, which was expected to decrease the fund to its lowest level in more than a decade.

The Board-approved $1.85 billion budget for fiscal years 2024 and 2025 increased 5% from the previous two-year budget due to higher costs for water, treatment, and infrastructure maintenance. The budget prioritizes long-term planning, capital projects, engaging stakeholders, system and asset management, and fiscal responsibility and cost control.

Water rates are rising across the state and nation for many reasons, including inflation that is driving up the cost of items like electricity, steel and chemicals needed for water delivery and treatment. The Water Authority is not immune from those impacts, and San Diego County’s strategic investments in supply reliability and efforts to maintain the aqueduct system mean that residents and businesses will pay more for water in future years.

The good news is that even in long, dry spells, the Water Authority can meet the regional demand for water that sustains its economy and quality of life. In recent years, the Water Authority made several strides to advance water affordability while maintaining supply reliability:

• $25 million secured from the State of California to pay water bills for San Diego County residents impacted by COVID-19
• $90 million secured through successful litigation efforts and distributed directly to 24 retail agencies in San Diego County
• $3 million secured through partnership with MWD on Central Valley storage assets
• Saved hundreds of millions of dollars in future costs of water deliveries
• Helped secure financial aid for low-income water customers
• Maintained strong credit ratings that reduce the cost of infrastructure
• Saved more than $250 million by refinancing debt
• Developed a best-in-class Asset Management Program to proactively address system upgrades and avoid costly failures

In March 2023, the U.S. Environmental Protection Agency awarded a $170 million low-interest loan to reduce financing costs for environmental upgrades that enhance the Claude “Bud” Lewis Carlsbad Desalination Plant. U.S. Representative Mike Levin, who represents coastal communities including Carlsbad, helped secure the funds that will save ratepayers up to $54 million compared to alternate financing strategies.

The low-interest federal loan from the Water Infrastructure Finance and Innovation Act will allow the Carlsbad Desalination Plant to improve its efficiency and environmental practices and save local water ratepayers tens of millions of dollars.

Unprecedented efforts by two member agencies to leave the Water Authority gained momentum during the year, moving toward a determination by the San Diego Local Agency Formation Commission. The two agencies – Fallbrook Public Utility District and the Rainbow Municipal Water District – sought cheaper water through a new arrangement with the Eastern Municipal Water District. LAFCO’s staff recommended approval of the detachment proposals, and the LAFCO Board planned to vote on the issue in July.

During the years-long decision process, the Water Authority Board prioritized financial protections for ratepayers in the rest of the county who would see their rates rise to cover costs incurred on behalf of the departing agencies. The Board also identified environmental safeguards as a key area of concern.