Your Rates are changing

The California Public Utilities Commission recently issued a decision that changes the way in which residential customers on the Monterey Peninsula are billed for water service. While the decision does not approve new revenues for California American Water, it will result in a rate increase for most customers, due to changes in pricing and implementation of a new surcharge to recover revenues approved in past years that were not collected due to increased conservation resulting from restrictions on the local water supply.

What are the major changes to the rate design?

  • Application of a new water revenue adjustment mechanism (WRAM) surcharge to collect approximately $32 million of previously approved, but uncollected revenues over a five-year period. The charge will be based on meter size.
  • The current residential allotment system, in which the amount of water each customer is allowed at each tier of the inclining block rate system, is based on individual survey information, including the number of people in each home and other factors, will be eliminated. A new system, widely employed by other water providers, will allow the same amount of water at each tier of the rate structure for all residential customers.
  • The monthly fixed water charge will increase for all residential customers, while the percentage of revenue collected through volumetric or quantity charges, will decrease.

What will be the average rate impact due to these changes?

The average monthly increases are estimated to be as follows:


100 gallon units (CGL)    

Current Rates  

New Rates

Effective March, 2017**  


Single Family










Low Income










*Assume Division 1 customer

**Assumes proposed changes to low income surcharge, PUC fee, meter based WRAM/MCBA surcharge, 2015 WRAM

When will these changes go into effect?

The new rates will be reflected in customers’ March 2017 bills.

How does the new residential rate plan work?

The new rates will still feature five pricing tiers, as before. However, the amount of water allowed at each tier will now be standardized for single family and multi-family residential customers.

During each billing period, your household water use starts in the first tier, where the price per 100 gallons is the lowest. Each tier has a certain amount of water allocated to it – if you use more water than is allocated to a particular tier, you move to the next higher-priced tier.


Single Family Rates

Tier 1  

0 to 29.9 CGL


Tier 2  

30 to 59.8 CGL


Tier 3  

59.9 to 104.7 CGL


Tier 4  

104.8 to 172 CGL


Tier 5  

More than 172 CGL  


Multifamily Rates

Tier 1  

0 to 18.7 CGL


Tier 2  

18.8 to 37.4 CGL


Tier 3  

37.5 to 50.5 CGL


Tier 4  

50.6 to 69.2 CGL


Tier 5  

More than 69.2 CGL  


Non-residential Rates

Division 1  

Rate for all units   


Division 2  

Rate for all units  


Division 3  

Rate for all units  


Division 4  

Rate for all units  


 What are the new monthly service charges?

The new monthly service charges will be as follows:

Meter Size    












1 ½


















 How much will the new WRAM surcharge be?

The new WRAM surcharge will be:

Meter Size    












1 ½”



















How will the Low Income Ratepayer Assistance program change?

The current 20% discount on the monthly service charge and Tier 1 and 2 rates will increase to a 30% discount on the monthly service charge and the rates in Tiers 1 through 4.

What resources are available to help customers save water and money on their bills?

California American Water offers robust conservation incentives including generous rebates for indoor appliances and efficient outdoor irrigation technology. Free devices including low flow showerheads, sink aerators and positive shut-off hose nozzles are also available at our business office during normal hours. In addition, customers may schedule a water wise house call, in which our conservation specialists will visit your home and make recommendations on ways to save water. Visit or call 831-646-3205 for more information.

Customer Bill Calculator

For customer convenience, we have an online single-family home Customer Bill Calculator. The calculations are intended for estimating purposes and are not a replacement for an actual utility bill.


How to read your bill

We offer a step-by-step instruction worksheet on how to read your bill. This online document will help you learn about how your bill is calculated as well as how to analyze your comparative monthly usage. It also includes important payment information and information regarding various surcharges that may appear on your bill.


Conservation programs

You are not alone in your effort to conserve water. We offer services, information and free water devices that could help you save water. This includes our Water Wise House calls where you can schedule one of our customer service representatives to come to your home and look for leaks and other opportunities for water savings.


Fact Sheets

Monterey Rate Change
Monterey Rate Change Non Residential
Meter Fact Sheet