Placer County Water Agency approval of updated connection charges supports western county growth

The Placer County Water Agency Board of Directors approved updates to the Water Connection Charges (WCC) for new customers connecting to PCWA's drinking water system in Western Placer County during its meeting Dec. 19. Updated charges were approved after a public hearing and review of the agency's Capital Plan and are the first updates to the WCC since 2017. "Today's decision reflects PCWA's long-standing pay-as-you-go policy that new customers bear the cost of new facilities needed to serve them," said Board Chairman Robert Dugan. "This protects existing customers from subsidizing infrastructure for planned growth." Updated Water Connection Charges Before the Dec. 19 approval, PCWA staff hosted several work group meetings with Placer County land developers and staff from local jurisdictions to develop and review the Capital Plan for meeting development needs. This process took more than two years. The PCWA Board of Directors reviewed these proposed changes at its Dec. 9 workshop. In its analysis, staff found a potential upside: "Driven by the request from the development community and various stakeholders, staff completed an updated lot size assessment to evaluate the maximum day demands for various ranges of residential lot sizes," said Jeremy Shepard, PCWA director of technical services. "The assessment concluded homes are using less water and therefore should pay a smaller increment of capacity than the current assessed values. This means homeowners will pay a lower fee than under the old formula for the same lot size. The updated WCC, effective Jan. 1, 2025, applies to new connections to PCWA's Auburn/Bowman and Foothill/Sunset/Ophir drinking water systems. Under the updated rates, developers will pay the following for a single unit of capacity (i.e. 1,150 gallons per day): * New retail connections: $25,815, an increase of 13.1 percent (from $22,821). * City of Lincoln wholesale rate: $20,075, an increase of 8.5 percent (from $18,501). * California American Water wholesale rate: $22,982, an increase of 15.5 percent (from $19,893). "The principal challenge of implementing a development-driven capital plan is knowing when to construct; in other words, balancing large expenditures on the part of PCWA with realistic expectations of when revenues will arrive to pay back those expenditures," explained Brian Rickards, PCWA planning and development services manager. "PCWA has always been committed to readiness in having infrastructure online in time for development as long as a plan is in place for development to pay its share." Supporting planned growth in Western Placer County PCWA's Capital Plan includes projects from Auburn to Western Placer County that represent the backbone infrastructure necessary to serve planned growth over the next 30 years. Among the projects are construction of the Ophir Water Treatment Plant, 26 miles of pipelines, five storage tanks and two groundwater wells. The total cost is estimated at $614 million. The benefits of these projects will be significant. Construction of the Ophir Water Treatment Plant provides for an additional 30 million gallons of water per day (MGD) of capacity and will be phased in 10 MGD increments. Set to begin construction in 2025, the Ophir Project will treat 10 million gallons of water daily when it first comes online, meeting the needs of 20,000 families in Placer County's western region, including Lincoln. Western Placer County ranks among the state's fastest-growing regions. By agency estimates, the build-out population of Western Placer County – the area that relies upon PCWA water supplies – is estimated to be near 500,000. That's up from 337,000 in 2023. The areas served directly by PCWA account for 192,000, with the rest being areas where PCWA sells wholesale water. The WCC increases ensure the costs of serving new development will be carried by those new customers and will not burden existing customers, says the agency. This pay-as-you-go model has been PCWA's standard. "By aligning charges with current water use trends and ensuring new development covers the costs of expansion, these updates balance fairness with sustainability," Dugan said. Rickards noted that within two years, PCWA will analyze all assumptions made on the 2024 WCC study and re-engage with stakeholders. "It is anticipated that in 2026 several assumptions (such as revenue and construction costs) will be verified," he said.