DWP Expects Water Prices to Skyrocket : Drought: Increases could be in double digits for each of the next 10 years. ‘We have serious supply and quality problems,’ an agency official says.

The cost of water in Los Angeles--and around the state--is expected to skyrocket in the coming decade as water agencies wrestle with the worsening problems of supply and quality, officials said Thursday.

Mike Gage, president of the Los Angeles Department of Water and Power Commission, said water users can expect rate increases that could be in double digits in each of the next 10 years to cover increasing costs of water conservation, reclamation projects and processes designed to meet increasingly stringent federal water quality standards.

“The cost of water is going to go up by more than the rate of inflation for the next 10 years and people had better get used to it,” Gage said. “We have serious water supply and quality problems.”

The rest of the state is facing similar quantity and quality problems and is also expected to increase rates at a blistering pace.

“I don’t see any way out of it,” said John Fraser, executive director of the Assn. of California Water Agencies, a trade organization representing more than 400 agencies statewide. “And there is not any recognition in the general public of what is in store.”

Fraser said polls conducted last year for his organization showed that California consumers would begin to strongly resist water rate hikes when they exceed $25 a month.

“But we’re not talking about $25, we’re talking about three or four times that amount,” Fraser said. Many California water users could be facing monthly water bills of $125 to $150 a month by the end of the decade, up from $25 or $30 today, he said.

Despite the March storms that doubled California’s water supply, the DWP commissioners on Thursday voted to stick with their plans to increase mandatory conservation to 15% on May 1, from the existing 10% level.

“It seems prudent to me that we have a target of 15% because that’s about what we’re short,” said Jim Wickser, assistant general manager for water. “March was wonderful to us, but it cannot make up for the previous five years” of drought.

And a return of normal rainfall in the coming years will not solve the city’s supply problems, Gage said.

The first rate increase will come next month when the DWP plans to file a notice with the City Council that it intends to seek a rate hike of about 10% to begin in the fall.

The DWP currently raises about $350 million a year in water sales, with an average residential bill of about $28, according to the agency. The last rate hike was a 6.5% increase last April. In the past 10 years there were eight rate hikes, averaging about 8.9%, agency records show.

Gage likened the water outlook to that of energy in the early 1970s with the “oil shock” that caused a top-to-bottom restructuring of the DWP’s power production and pricing. The agency, which had been almost entirely dependent on oil-fired power plants in 1970, now receives only about 20% of its electricity from that fuel.

“Gage is saying we want to control our own destiny, and that has a price tag,” said Jerry Gewe, DWP planning engineer.

Some of the projects the DWP is planning:

* East Valley project, a pipeline to transfer reclaimed water from the Tillman reclamation plant to a steam generation facility. Along the way, some water will be used for irrigation at parks, schools and golf courses. Approximate cost: $50 million.

* Sepulveda Basin project, a pipeline to transfer reclaimed water to several golf courses and parks in the San Fernando Valley. Approximate cost: $17 million.

* Greenbelt project, a pipeline to transfer reclaimed water from a Glendale waste treatment plant to Forest Lawn and Mount Sinai cemeteries, Lakeside Golf Course and Universal City. Approximate cost: $4 million.

* Hyperion reclaimed water project, a pipeline to distribute reclaimed water in the Los Angeles International Airport area for industrial use and ground water recharging. The project is shared with the West Basin Municipal Water District. Total cost: more than $100 million. The DWP’s share is estimated at tens of millions of dollars.

* Elysian Park project, a pipeline to carry treated waste water to Elysian Park and eventually to the planned Central City West development for irrigation and industrial uses. Approximate cost: $30 million.

Potentially one of the most expensive projects, Gewe said, is the DWP’s continuing effort to underwrite the cost of low-flow toilets. The agency will pay a $100 rebate to anyone who will trade in an old water-guzzling toilet for a new low-flow model.

Gewe said that with an estimated 2 million toilets, the program could cost the DWP more than $200 million. The agency already has spent $2.5 million and has received claims for an additional $3.5 million.

By saving several gallons on every flush, Gage said the program is one of the most cost-effective ways of stretching the city’s water supply. Or, as Gewe said, “It’s where we get the most bang for the buck.”