Tiers go by

Nestlé Waters North America is hardly the first bottler to open up shop in the city. But it irked some people that there was no environmental review of the company’s plant—which pipes in Sacramento tap water, processes it and sells it to consumers at a high markup.

Nestlé pays just under a dollar for 748 gallons of water, just like you do at home. But the per-gallon price of Nestlé's bottled water is much higher—sometimes 1,000 times more than what the company paid for it.

“A lot of money is being made on our cheap, excellent city water,” says Sacramento City Councilman Kevin McCarty. “The reality is there is a huge profit margin, and I think we ought to take a look at how much we charge for it.”

McCarty has pushed for the city to adopt a system of tiered water rates—which would charge higher rates for water hogs while rewarding those who conserve.

Tiered rates are catching on in California, particularly in the south state, where the price of developing new water for thirsty urban areas is climbing steeply.

Chris Brown, executive director of the California Urban Water Conservation Council, says his group has been promoting tiered rates for two decades.

“They help to send a price signal. It’s been quite popular in communities that need to conserve water,” says Brown.

San Diego, San Francisco, Los Angeles and Santa Cruz all have some form of tiered rates, notes Brown.

But momentum for the idea has slowed to a trickle inside the city’s Department of Utilities.

Department of Utilities spokeswoman Jessica Hess explained, “The Department asked the council and they agreed to hold off implementing a tiered rate until the majority of residents have a meter.”

The city wants to wait for the meters because “it isn’t fair” for one customer who does have a meter to wind up paying more or less than a neighbor who doesn’t have a meter—or vice versa.

Sacramento residents have never had water meters. They were even forbidden by the city charter for decades. Sacramento city leaders at the time must have believed that, at the confluence of two great rivers, there would always be more than enough.

It’s only because of changes in state law that superseded the charter that we are just now switching over—about one in five homes are metered now.

But since adding new meters is a strictly pay-as-you-go situation, it’s likely to be a long while before more than 50 percent of homes have meters.

But commercial and government facilities do have water meters, and have for years. That’s because businesses were never exempted by the city charter.

Since the largest users are mostly commercial and government facilities, it seems likely that the city could begin to introduce tiered rates for the biggest user if it really wanted to.

But the Department of Utilities is in no hurry. “Our hope is that we can be able to have this discussion again with council in the next few years,” said Hess.