Why This California Town’s Water Costs Way More Than the National Average

Samuel Bonaccorso protested Lucerne's water rates at a public hearing before a judge from the California Public Utilities Commission.

Samuel Bonaccorso protested Lucerne's water rates at a public hearing before a judge from the California Public Utilities Commission. (Audrey Dilling/KQED)

The town of Lucerne in Lake County is tucked between mountains and a lake. When you drive in on the main two-lane highway, the sign that greets you calls it the “Switzerland of America.” But David Cruz has a different nickname for the place.

“Welcome to the most expensive water in the whole United States,” Cruz says. He’s standing in his front yard, wearing a T-shirt that says: “FLAT BROKE — DAUGHTER IN COLLEGE.”

“She’s out, but we’re still paying,” adds Cruz’s wife, Lorena.

In his 100-day action plan to “Make America Great Again,” President Trump proposed privatization as the best strategy for fixing the country’s infrastructure, including roads, bridges and water systems. That’s already happened in Lake County’s Lucerne and other small towns like it throughout California — and it’s not working out very well for people like the Cruz family.


David Cruz is semi-retired, and says he can’t afford to pay his family’s water bill on his limited income. Lorena shows me their latest one: $712.70 for two months.

Two months of water costs the average U.S. household about $240. The Cruz family is paying three times that, and Lorena says her family of five doesn’t waste water. They do dishes only once a day, wash their laundry every two weeks and take short showers.

These habits might sound familiar after a drought that lasted half a decade. But this isn’t about the drought. The Cruzes are conserving water because they can’t afford not to, rain or shine.

A sign displayed at a public hearing regarding Lucerne’s water rates.
A sign displayed at a public hearing regarding Lucerne’s water rates. (Audrey Dilling/KQED)

It hasn’t always been like this. But just over a decade ago, David Cruz says, their water bill started to rise. The high cost of water has impacted the entire town.

“There’s no trees, empty houses, no gardens,” says David Cruz. “Pretty soon it’s going to be a ghost town.”

The Cruz family’s neighbor, Steve Theodorf, remembers more vibrant times in the area. He’s lived in Lucerne since high school.

“During the summer it was just wall-to-wall tourists,” he says.

Theodorf was just doing something he rarely does: washing his car to get ready for a special trip.

“Otherwise we just leave our cars dirty because we can’t afford to wash them,” he says.

Like a lot of his neighbors, Theodorf is a retired veteran on a fixed income. Lucerne’s population skews mostly older and white, and many people live below the poverty line. The main highway through the town is dotted with shuttered hotels and restaurants.

“I hate to see the town go the way it’s gone,” Theodorf says. “The water is what killed the businesses.”

Like the Thai restaurant that closed up shop and reopened in another town just a couple of miles down the road, where water bills are lower.

So, how does a town get priced out by its water?

Clear Lake, the source of Lucerne’s drinking water, is full of algae, bacteria and other compounds that must be removed before the water reaches customers.
Clear Lake, the source of Lucerne’s drinking water, is full of algae, bacteria and other compounds that must be removed before the water reaches customers. (Audrey Dilling/KQED)

Lucerne’s water comes from nearby Clear Lake. But, at least on this visit, it doesn’t quite live up to the name. The lake is teeming with green algae. Water like this needs a lot of treatment. And when the current water company in Lucerne took over about 15 years ago, the health department told them the treatment system they inherited wasn’t up to the job.

“You simply cannot operate a system that does not provide safe drinking water to customers,” says Paul Townsley, vice president of regulatory matters for California Water Services (Cal Water). Townsley says the company had no choice but to upgrade the treatment plant, to the tune of about $7 million.

“You take that cost and you divide it by the number of customers here” — that’s about 1,800 households — “and you have the issue that we have today,” Townsley says.

“The alternative is to ignore the infrastructure,” he adds, which is the choice hundreds of small water systems around California are being forced to make because they can’t come up with the money to make improvements.

As many as 160,000 Californians get their water from a company that has failed to meet water quality standards in recent years.

But Cal Water happens to be one of the largest private water companies in the West, so it can come up with the money upfront, usually from investors. And it’s up to customers in Lucerne to pay it back.

“An investor in a company like Cal Water is investing in infrastructure,” says Townsley. “The money has to come from somewhere.”

It might even be coming from you, if you’ve got a retirement fund. Some major mutual funds invest in Cal Water.

If it were a public company, money for big projects would come from bonds, Townsley explains. But people vote on bonds. The residents of Lucerne don’t get a vote. Instead, they get one chance every three years to plead their case at a public hearing with the California Public Utilities Commission (CPUC).

“I took the first damn shower in one month today,” Lucerne resident Samuel Bonaccorso told a CPUC judge in front at the latest packed public hearing in December. “Do you know what that feels like?”

After the hearing, the water company agreed to consolidate Lucerne’s costs with other nearby water districts — another option that’s only available to a large company like Cal Water.

That brings down the monthly water bill for people like Bonaccorso from three times the national average to double what most Americans pay for their water.

Why This California Town’s Water Costs Way More Than the National Average 24 March,2017Ryan Levi
  • Ya know, I get sick of hearing all of this whining about water, electricity etc! It’s Calif and you morons elected these idiots that screwed up the free market system so they could take over control, as in Nationalizing all utilities. That’s right! You are setting yourselves up for a complete govt takeover.
    Yes, it’s what marxists do, they destroy the system by creating useless laws and regulations (See EPA writing laws only congress can do) and leave you with no other alternative, so you’ll demand govt take over the problem, a problem they created in the first place!

    Drill a well you whiners! I live in the sierra, I don’t even have access to public water, and water wells on average are 300′ deep to hit water.
    You live in the valley where water averages depths 20 to 70′ down and costs little to pump compared to 300′.
    Point is, stop voting in marxist Dimocrats, get govt out of the utility business and watch your costs drop.
    For proof, look at your electricity bill over the last 8 years under obama the Marxist, and his so called “Green Energy” scam.

    This hit piece is proof positive as to why Trump PBS/NPR funding and rightly so. I don’t even like trump, but he was definitely right on this one.

    • LynneB

      hey bonehead the issue here is that ‘the free market’ is making water unaffordable to these people, take out the profit that calwater makes and they might be able to afford their water. Compare the rates between SMUD (public company) and PG&E (private) SMUD is 30% cheaper, same electricity, same infrastructure. Trumplandia is a place where everything is privatized, not something most of us want to live

      • Wrong oh thick headed one!
        It’s govt interference in the free market, that not only forces cost increases, but creates monopolies as in picking winners and losers!
        Lookup Fabian Socialism and learn something. The Dim party knows exactly what it’s doing.
        Sheesh…

        • Byron Buck

          Where is the interference here? Requiring minimum health standards so you can actually drink the water? This is a private monopoly, so there is no market here.

          • If you knew anything about the PUC you wouldn’t have to ask.
            So let me guess, your answer is to let the govt take over a private entity, right?

          • Byron Buck

            Having worked in the water industry for thirty years and dealt with the PUC may times, I likely know more than you. Give that water supply service is a monopoly, it is generally cheaper to have a public entity as a non-profit, run them than a private for-profit entity. This history of water service in CA is that private entities provided poor service at high costs before the PUC came to regulate them, and most large ones were taken over by municipalities where ratepayers actually have a say through their elected officials. The remaining PUC regulated utilities are guaranteed a 15% profit, no matter how poorly run. Is your solution to de-regulate them where they can charge whatever the traffic will bear under a monopoly?

          • JakiChan

            I checked out your whackadoo “forum”. Wow. Guess the chemtrails got you. Especially how you can’t see that this is privatization at its finest.

          • dzerres

            yes. take over the monopolies. In fact that what’s the PUCs were set up to regulate because if it weren’t for the PUCs these monopolies could run roughshod over the consumer because there’s no competition. I agree the PUCs are not doing a very good job – they should crack down and revoke this companies license to operate as a monopoly. And you can’t have everyone drill wells within a city. Show me where that’s allowed ANYWHERE in the country – it’s not. conservatives are the least informed people on the planet.

    • microlith

      This post is pretty funny. It basically screams at people for daring to push back against companies. Corporate worship, almost. The reality is that life-essential services like water delivery shouldn’t be privatized. You end up with ridiculous situations like this.

      it’s what marxists do

      Once someone starts throwing around the word “marxist” it’s obvious that the plot’s been lost somewhere and they’re just looking for something, anything they can smear their target with to attack, even if it’s utterly ridiculous.

      Drill a well you whiners

      And further drain the already dwindling aquifers that have been recklessly tapped over the last 100 years?

      get govt out of the utility business and watch your costs drop

      Yep, like when everyone turned a blind eye to Enron and prices dropped. Sure thing, those rolling blackouts are totally natural.

      For proof, look at your electricity bill over the last 8 years under obama the Marxist, and his so called “Green Energy” scam.

      Hey, when you decide that you need to protect the environment instead of just sh*tting all over it, sometimes cost go up. But it’s also a drastic infrastructure shift and that costs money too.

      This hit piece

      Won’t KQED just leave that poor corporation alone!

      as to why Trump PBS/NPR funding

      You a verb, but it wouldn’t make it any more rational.

      I don’t even like trump, but he was definitely right on this one.

      No he wasn’t. He was just pandering to people who think “public” = bad. Like you.

    • dzerres

      wow, and I always thought deregulation and privatization were Republican values but now you telling me it’s the “dimicracts”. You’re an idiot. I know you can’t read because the article clearly stated that if the water company were a governmental agency they could finance their improvements through voter bonds without having to pay shareholders. Talk about dim – you sir are a dullard.

  • Gregg Barnes

    So, a few months into Trumps Presidency, and you are already blaming him for not fixing something that the state of California caused?

    • Alan Wheeler

      Looks like you didn’t actually read the article. What they’re saying is that Trump has PROPSED that this solution be implemented nationally, and here is a local example of how it will affect people’s lives.

    • dzerres

      It’s a proven fact: Trumpanzees can’t read or comprehend. Their leader has “the best words” too bad he can’t string them together in a coherent sentence. But he’s their hero until he gores one of the pet government services whether it’s VA benefits, the ACA, Medicare or Social Security – all govomint benefits that these morons can’t understand is from the collective, social, community known as our government.

  • George Williams

    “—— upgrade the treatment plant, to the tune of about $7 million.
    “You take that cost and you divide it by the number of customers here” — that’s about 1,800 households — “and you have the issue that we have today,” Townsley says. Who is figuring this,? A cost of $7m, paid over 15 years. with interest of 6% totals $13.3m+_, or $41.00 per month for 1800 customers for 15 years. PS there must be other “customers” not just “households”
    Must be nice to be regulated. Utilities do not care if an “Investment” makes sense, as per Byron Buck below with a guaranteed profit of 15%, the only thing the Cal PUC regulates is what time they go for lunch, oh you mean I have to go to work today!. and how long before retirement!
    . Of course as a consumer you can’t just hook up to another water supplier.

  • waterguy

    Cal Water makes 10% or less on its depreciated investment (real dollars, real investment in infrastructure). Find me a “free market” company that can do that. Everything else is costs to provide water and doesn’t give the company anything.

    • microlith

      Then why have a private utility? Obviously they cannot provide the service at a reasonable cost and it’s killing the town.

      • waterguy

        You are right. Neither a governmental utility or a private utility can provide affordable water to Lucerne. Governmental utilities can’t do any better than privates (except see below). Public utilities keep rates down by delaying maintenance and upgrades, and their systems go to hell. Private utilities keep the systems maintained and well-operated, but cost more. But cost is cost and can’t be avoided forever. So the only choice here is to have the government subsidize Lucerne’s low income customers. California has classified clean water as a right. Therefore it is equivalent to health care and should be provided at an affordable cost. That is easier if the water utility is governmentally owned. But the issue is not private or public utilities as couched above. They both can do the job, each better in its own way.

  • elofdahl

    Why is this article so scarce of facts? It would be nice to know what the actual cost per unit of water is. It would be helpful to know why the town couldn’t/wouldn’t float a bond and run a municipal water system, if doing so would be more cost-effective than Cal Water. There is more to this story than meets the eye. This article is just another not-so-subtle hit against anything our current administration proposes. Sad, it’s no wonder that “Public Broadcasting” is about to be defunded.
    By the way, it might be a good thing that Cal Water took over, otherwise there might not be any water for the towns-people.

  • Lee Ann Fogel

    My recent Cal Am Bill went up 100% from the previous month. I call and was told that they went to the commission and a raise was approved. So Cal Am can charge whatever. In addition Monterey County is being charge more because we did what they asked they lost money so we did what we were asked and got screw again. I called the Public Utilities Commission and made a report. They took the information. I asked what happens now The answer nothing. They put it into the computer and perhaps someone takes time to look at it. Well again, nothing is done for the consumer.
    THE END.

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