TEMECULA: Farmers water rates to rise

Cost-savings plan for farmers to be eliminated in next five years

By NICOLE SACK - Staff Writer | Friday, September 12, 2008 8:42 PM PDT ∞

TEMECULA ---- After 50 years of providing agricultural customers with reduced rates, changes are coming down the pipeline that will likely force growers to pay rates that most homeowners experience.

About 30 farming customers of the Rancho California Water District received news this week that their reduced water rates likely will be phased out by the main supplier of regional water ---- Metropolitan Water District ---- in the next five years.

The change will almost certainly mean customers will see higher prices for regional produce, or a reduction of farming operations.

From 1958 to 1994, Metropolitan Water District provided a 25 percent discount for agricultural customers.

Then in 1994, the Interim Agricultural Water Program was established. That program extended lower rates to growers with the understanding that their water supply would come from "surplus" water and could be interrupted when the supplies tightened.

Under the program, agricultural customers pay $394 per acre-foot of water ---- $132 less than municipal, industrial and residential customers for the same quantity and quality of water. One acre-foot is the volume of water sufficient to cover an acre of land to a depth of 1 foot ---- 325,851 gallons. On average, one acre-foot of water is enough to meet the needs of four people for a year.

Metropolitan Water District provides the Rancho California district with 70 percent of its water. In 2006, more than 7 billion gallons of the lower-cost water were delivered to the local district's agricultural customers.

That "surplus" water is dwindling, however, as Southern California water supplies continue to tighten due to drought and legislative decisions that will restrict the importation of water to regional customers.

In response to the tightening supplies, farmers were notified of a mandatory 30 percent reduction in their water use. As a result, area avocado and citrus farmers have stumped their trees and taken other measures to adhere to the restrictions.

Now a new kink is in the line for those same farmers as it appears Metropolitan will eliminate the agricultural rates entirely in the next five years. Rates will increase by $25 to $75 per acre-foot for those in the program, said Perry Louck, Rancho California Water District's director of planning.

The local water district held a meeting Wednesday to inform growers about how the Metropolitan decision will trickle down to local customers, both inside and outside the Rancho California district's boundaries.

Rick Opel, vice president of Henry's Avocado Corporation, based in Escondido, said he needs to "study and digest" the phase-out proposal after Wednesday's meeting. Opel's company has 2,200 acres of avocados.

Opel said the company has had to stump trees and cap sprinklers to reduce their water use.

"We're operating our factory at 75 percent efficiency," he said. "This is going to make farming less profitable. The outlook is very bleak."

Larry Libeu, a director on Rancho California Water District's board, said the five-year phase out period gives growers time to re-evaluate their growing future and possibly switch out their heavy water-drinking crops, like avocados and citrus, with less-water needy plants such as grapes.

"Instead of just cutting the water at once, the phase out will allow agricultural customers to create a business plan," he said.

Libeu said there are two likely scenarios for area growers: face higher costs or cease operations. He said the region could see more agricultural jobs lost to foreign markets due to the water restrictions and rising rates.

Len Francis noted it is really only a four-year phase out as 2009 is almost here. He said that by the time the phase out of the discounted agricultural water program is complete in 2013, he expects his water costs to be 50 percent more expensive.

He said one positive aspect of the change is that while agricultural water customers will face a 30 percent reduction in the amount of water they can use, being lumped in with domestic customers the farmers will be able to use as water as they can pay for.

Francis said he manages more than 600 acres of avocados, a crop he has had to cut back by 25 percent because of the restrictions. He said this water scenario is the most severe he has seen in his 30 years of growing.

"This is the first time we've ever had a 30 percent cutback in water allowances," he said.

He says he doesn't know how the market will balance itself out. Changing what crops he grows is not an option, he said, and without avocado trees, his De Luz property will lose value.

"What else are you going to do with hilly land like that, if you're not growing avocados?" he asked.

Contact staff writer Nicole Sack at (951) 676-4315, Ext. 2616 or nsack@californian.com.