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2020-21 Groundwater Production Charge-Setting Process


The Santa Clara Valley Water District, now known as Valley Water, conducted its public process for setting FY 2020/2021 groundwater production charges (rates) in the Spring of 2020.

As Santa Clara County’s primary water wholesaler, Valley Water strives to make sure there is enough clean, safe water to sustain the region’s economic vitality and quality of life. Water charges pay for the infrastructure and services required to deliver clean, safe drinking water to Silicon Valley residents and businesses.  Other references related to the infrastructure and services provided are:

The rate-setting process includes a series of opportunities for the public to provide input at an open house and public hearings in April.

Valley Water’s founding legislation (District Act) provides for the levying of groundwater charges to pay for the protection and augmentation of  water supplies from those who produce groundwater for beneficial use. Charges may be collected from all those within a zone who own or operate water-producing wells, whether currently active or not. Revenue from groundwater production charges may be used to pay for and incur debt for certain activities, including the following:

•    Plan and construct improvements to infrastructure such as dams, pipelines, recharge ponds, drinking water and recycled water treatment plants, and pump stations
•    Operate and maintain dams, pipelines, recharge ponds, treatment plants and pumping stations to help sustain the groundwater basins 

Water supplies
•    Operate and maintain local reservoirs to capture water and fill groundwater percolation ponds
•    Purchase imported water and develop local water supplies to replenish the groundwater basin

Water quality
•    Monitor and protect groundwater from pollutants
•    Ensure proper construction and destruction of wells to prevent contaminants from infiltrating the groundwater basin

The "2020-21 Protection and Augmentation of Water Supplies," or PAWS 2020 Report, presents the financial and water supply information that forms the basis for the fiscal year 2020-2021 wholesale water charges. Valley Water released the PAWS 2020 Report on February 28, 2020 in compliance with the District Act and other legal requirements as part of its wholesale water rate setting process. The report does not reflect the effects, if any, of the Federal Energy Regulatory Commission's directive of February 20, 2020 (the "FERC Directive") with respect to the lowering of the Anderson Reservoir elevation, as Valley Water received the FERC Directive after the PAWS 2020 Report had substantially been written. Valley Water is currently reviewing what effect, if any, the Federal Directive may have on projected water supply, water cost or other potential future impacts related to the Directive.

Recently, Valley Water commissioned a scientific study of its groundwater benefit zones. Based on a comprehensive evaluation of geological studies, local groundwater, and the services Valley Water provides, staff proposed a minor adjustment to the boundary of North County Zone W-2, and a partitioning of the South County zone into three zones. These adjustments ensure that ratepayers are grouped in a way that reflects the most recent and relevant data regarding the services and benefits received by well users. On April 28, 2020 the Board adopted the proposed changes to the groundwater benefit zones which took effect July 1, 2020.

Operations, infrastructure, and rate structure for each of the new or modified zones are separate. The North County groundwater benefit zone is referred to as the modified Zone W-2.  In the South County, the 3 groundwater benefit zones are as follows: 1) Coyote Valley is referred to as the new Zone W-7; 2) Llagas Creek Subbasin is referred to as the modified Zone W-5; and 3) the foothills below Uvas and Chesboro reservoirs is referred to as the new Zone W-8.  For more information on the rate-setting process in your area: