As reported by the City News Team, San Diego water customers’ bills will look different under a proposed change to the rate structure, which is the result of a class action lawsuit over how rates are determined. If approved by the City Council, the City will move from a tiered rate to a unitary rate beginning Jan. 1, 2027.
The City currently uses a tiered water rate structure, where customers who use more water pay a higher per-unit rate on the additional water used. This tiered structure was developed based on nationally accepted American Water Works Association cost-of-service principles and methodologies that are used by utilities throughout California and the country.
To comply with a recent court decision, the City is changing to a unitary rate structure, where all customers pay the same rate per unit of water, regardless of total use. The court decision found that the national standard methodologies as used by the City did not satisfy Prop 218’s evidentiary burden.
Tiered rates have historically been used by water districts across California.
Why is the rate structure change happening?
A 2025 court decision (Patz v. City of San Diego) requires the City to change how water rates are structured. To comply with the court order, the City is moving to a unitary rate structure.
The rate change must be approved by the San Diego City Council in order to take effect. A public hearing was held on Oct. 6, 2026, for the Council to consider and vote on the proposed rate adjustment. According to a report from KPBS, three council members were absent, and the hearing was postponed to Oct. 27.
If approved, San Diego customers would see the new rate structure reflected in their water bills beginning on Jan. 1, 2027.
Impacts to customers’ bills will vary depending on how much water they use, their property type and water meter size. Details of the proposed changes to volumetric rates and service charges can be found at sandiego.gov/rate-adjustments and in the notice of public hearing mailed to customers.
