In a decision that could undermine California's ability to respond to increasingly dire drought conditions, a state appellate court has ruled that San Juan Capistrano cannot implement tiered water rates that are not based on the cost of service provision. Under the city's plan, the rate charged for water usage increased depending on the overall amount of water used. Users in the lowest tier paid about $2.50 per unit -- the most profligate water users paid over three times that rate.
The city's plan is designed to encourage water conservation by increasing water's cost the more one uses. It also violates a state law prohibiting government agencies from charging more than the cost of a service, the court found.