A California appeals court has ruled last week that San Juan Capistrano’s tiered water rates are unconstitutional, dealing a potential blow to the state’s water conservation efforts as it deals with historic drought, critics say.

In a 3-0 ruling, the 4th District Court of Appeal upheld an Orange County judge’s decision that found that charging higher rates to those who consume more water violates Proposition 218, a voter-approved law that prohibits government agencies from charging more than the cost of a service.

The ruling could complicate water conservation efforts as agencies statewide have been using this pricing structure as one tool to reach the end goal of reduced water consumption.  

San Juan Capistrano charged nearly four times as much per unit of water for users in the highest tier to provide an incentive to conserve, reports CBS Sacramento.

“It’s unfortunate because as our studies showed it looks like these rate structures are effective at reducing demand and also doing so in an equitable manner,” environmental economist Ken Baerenklau told CBS. “Households that are using relatively more water, those households appeared to be the ones who reduced consumption the most.”

Officials must demonstrate that fees correspond to the cost of providing the service, the court said. If heavy water users cause a water provider to incur additional costs, it would be legal to charge them for those increases.

San Juan Capistrano has already flattened its tiers and tied water charges more directly to costs after a state Superior Court judge in 2013 ruled the tiered structure invalid, according to a report in the LA Times.

Although this latest court decision is only binding in Orange County, about two-thirds of water districts in California might have to rethink their pricing structure of tiered rates, depending on how this decision affects the rest of the state.

For example, the Los Angeles Department of Water and Power had considered a plan to expand its tiers and charge even more for higher water use. Last week, agency officials said they were reviewing the court’s decision.

“Water retailers are going to have to scrutinize their rate structures more thoroughly,” Benjanmin T. Benumof, an attorney for the Capistrano Taxpayers Association, told the LA Times.

“The practical effect of the court’s decision is to put a straitjacket on local government at a time when maximum flexibility is needed,” Gov. Jerry Brown said in statement. Earlier this month Brown ordered an unprecedented 25 percent water-use reduction statewide. “My policy is and will continue to be: employ every method possible to ensure water is conserved across California.”

Sources: CBS Sacramento, LA Times 

Photo credit: “the world of water” by Snap is licensed under CC BY 2.0.