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Water Rates

About Pleasanton’s Water Rates

The City of Pleasanton is committed to maintaining an equitable and justifiable rate structure that supports reliable water service and long-term financial sustainability. Pleasanton’s water system is funded by a separate Water Enterprise Fund, which covers all water-related services and infrastructure. The City purchases 100% of its water from the Zone 7 Water Agency, which charges the City both fixed and variable costs. The city’s utility bills also include applicable city rates for water (both fixed and variable), sewer, irrigation, and recycled water. Sewer rates include local collection charges from the City of Pleasanton, as well as pass-through charges for wastewater treatment from the Dublin-San Ramon District (DSRSD) or City of Livermore.

History of Pleasanton Water Rates

Delivering safe, reliable water requires extensive infrastructure and ongoing maintenance. Over time, the cost of providing water service has increased. To keep pace, the City and Zone 7 Water Agency regularly review their rates in response to rising costs, new regulations, and evolving system requirements. From 2011 to 2023, while Zone 7 raised its fixed and variable water rates, the City’s water rates were adjusted only for inflation. During this period, the City also provided the first 20 CCF (hundred cubic feet) of water free of charge to all customers. In 2022, the City discontinued use of its groundwater wells due to concerns about PFAS and began relying entirely on imported water from Zone 7. This shift significantly increased the cost of water. In 2023, the City approved a two-year emergency rate increase to stabilize funding and support critical infrastructure needs. The new rates, a 30% increase and a 12% increase, took effect in 2024 and 2025, respectively.

Water Rate Update – 2025

Like most water providers across California, Pleasanton is facing challenges related to aging infrastructure, stricter regulatory requirements, higher water quality standards, and rising construction costs. Since 2023, the City has taken a strategic, progressive approach to planning for the future of its water system.

Rate Setting
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Rate Setting
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Did you know?

Emergency repairs can cost up to 10 times more than proactive infrastructure maintenance and upgrades.

Water Rate Update 2025: Rate-Setting Process

To fund these critical improvements and maintain financial responsibility, the City is implementing a strategic, structured three-step process to ensure its rates reflect the actual cost of service, support long-term investments, and uphold the financial health of the water enterprise fund. In September 2024, the City officially began its rate-setting process by contracting with Water Resources Economics, LLC, to conduct a comprehensive water rate study and develop cost-based, equitable, and legally defensible rates in compliance with Proposition 218 and industry best practices.

Status: Adopted January 2025

In January 2025, Pleasanton completed its first long-term water planning document, the Water System Management Plan (WSMP). This document serves as the foundation for completing the 2025 Water Rate Study in a financially and strategically sound manner. The WSMP:

  • Outlines all water system assets
  • Identifies capital improvement and maintenance needs over the next 20 years
  • Guides near-, mid-, and long-term system improvements
  • Serves as the foundation for all future rate-setting and financial planning

Status: Completed March 2025 

In March 2025, the City conducted a financial analysis and identified funding scenarios to establish the financial framework for prioritizing and funding critical water infrastructure projects over the next five years. The analysis included:  

  • Operational costs, infrastructure needs, and revenue options
  • Long-term impacts on financial stability and ratepayers
  • Informed a prioritized investment strategy to complete $73 million in Critical Infrastructure Projects in the next five years 

The City Council approved the enhanced project delivery model, which takes a balanced approach by accelerating the most critical infrastructure upgrades while minimizing long-term risk to the City. Learn More

Status: In Progress

The final step in the rate-setting process is determining recommended rates and a rate structure that aligns with the needs of the WSMP and the funding priorities outlined in the Financial Analysis and Plan, to ensure rates adequately reflect the City’s cost of service. This step includes:

  • A complete cost-of-service analysis and rate study to ensure equity and legal compliance
  • Updated connection fees to reflect current infrastructure demands 
  • Proposed changes to the rates, rate structures, and related fees 
  • A formal Proposition 218 process for public notification, comment, and adoption

The City will host a formal public hearing to adopt the latest fees in October 2025. 

Water Rate Update 2025: Rate-Setting Priorities

The City’s proposed water rate updates aim to achieve the following goals:

  • Ensure financial stability and resiliency 
  • Establish consistent, equitable, and justifiable rates 
  • Achieve appropriate cost recovery
  • Reduce legal and financial risk through compliant rate design
  • Maintain affordability through appropriate assistance programs
  • Address both short- and long-term infrastructure needs 

Water Rate Update 2025: Proposed Water Rates

Last Updated April 29, 2025

On May 6, 2025, the City Council will review the results of Pleasanton’s [cost-of-service analysis and rate study], along with preliminary recommendations for updating the City’s water rate structure. The following changes to the City’s rate structure and rates are being considered:

The City currently uses a tiered rate structure for single-family customers. Tiered consumption-based variable charges, or rates, have historically been a standard rate structure used by water agencies to promote water conservation and maintain affordability for lower water users. Over the past three years, several court cases in California have addressed the legality, primarily focusing on their compliance with Proposition 218 requirements that:  

  • Rates must be proportional to the cost of service 
  • Revenue cannot exceed the funds required to provide the service 
  • No user should pay more than their proportional share 
  • Agencies must demonstrate the cost basis for each tier

Recommendation: Adopt a uniform rate structure for all customers to achieve greater consistency and reduce legal risk. 

Consumption-based variable charges represent the portion of a water bill that changes based on a customer’s water usage. Pleasanton has two variable charges: Zone 7 variable charges (related to City water supply purchases from Zone 7) and City variable charges (related to City’s delivery of water to customers). Common variable costs include the volume of water purchased, energy costs for water pumping, and water treatment.

Fixed charges represent the portion of the water bill that is charged to customers regardless of their water consumption. Fixed charges are consistent and depend on meter size. Pleasanton has two fixed charges: City and Zone 7. City fixed costs include meter maintenance, meter reading, and repair and replacement. Zone 7’s fixed costs to the City are determined by Zone 7. Common fixed costs include system maintenance, staffing, regulatory compliance, and infrastructure upgrades.

The City’s current rate structure charges customers only 32% of Zone 7’s fixed costs, with the remaining expenses covered through the variable rate. However, this creates uncertainty and financial risk for the City, as water consumption depends on various factors, including annual rainfall, drought conditions, and changes in customer behavior.

The City Council will be presented with options illustrating potential rates for 75% and 100% Zone 7 Fixed cost recovery. Before the 2024 emergency rate increase, the City had only charged a variable Zone 7 rate. Starting in 2024, the City began to collect a fixed charge to reduce its financial risk and began stabilizing its cost recovery.

Recommendation: Proceed with the 100% Zone 7 fixed cost recovery to establish revenue stability and reduce risk. 

The City currently offers a 20 percent discount on water and sewer rates for single-family residents who qualify as a “senior” (age 65 or older) and a 30 percent discount for residents who are eligible as low-income (those who qualify for PG&E, PacBell, or cable television discounts through either the California Department of Economic Opportunity or the Social Security Administration). Residents cannot apply for both discounts. The City also limits both programs to a discount only if the water customer’s bi-monthly water consumption is less than or equal to 30 CCF (maximum usage). 

These discount programs are funded through the city’s general fund and are not supported by user fees or rates. The senior discount program currently has approximately 3,200 enrolled customers and costs the general fund around $300,000 per year. The low-income program currently has approximately 225 enrolled customers and costs the general fund around $36,000 per year. 

Recommendation: To ensure greater financial sustainability by reducing unfunded subsidies and modifying the Senior discount program for those in greatest need, while maintaining the existing low-income discount program. Given Pleasanton’s high cost of living and median household income, many residents with limited income do not qualify for existing State or Federal low-income assistance programs. The City is evaluating alternative approaches to provide water bill relief for this underserved segment of the population.

A complete analysis and summary of the recommended rate structure, the resulting preliminary rates, and a comparison to neighboring water agencies is available in each of the documents below: 

Water Rate Design Analysis Technical Memo – April 16, 2025 – Coming soon

Agenda Report & City Council Presentation – May 6, 2025 – Coming soon

Below is a summary of the recommended rate structure changes and preliminary rate impacts. View the proposed rates – Coming soon

  • Single-family, multi-family, commercial, industrial, and potable irrigation customers will have the same uniform consumption-based variable rate. In Year 1, the breakdown of the expected impact on single-family customer bi-monthly water bills is as follows:
    • $0 to $10 bi-monthly increase: 6% of single-family bills 
    • $10 to $20 bi-monthly increase: 7% of single-family bills 
    • $20 to $40 bi-monthly increase: 52% of single-family bills 
    • $40 to $60 bi-monthly increase: 14% of single-family bills 
    • $60 to $80 bi-monthly increase: 7% of single-family bills 
    • Bi-monthly decrease: 14% of single-family bills. 
  • The proposed water rate structure has a greater impact on the rates for low-consumption customers compared to high-consumption customers, due to the switch to a Zone 7 model with 100% fixed cost recovery for financial stability. This change is in response to recent court rulings against tiered consumption-based variable charges, which had previously offered heavily reduced rates for low-usage customers. 
  • In Year 1, for low- and average-water users, the proposed water rates are overall lower than those in other Tri-Valley cities, such as Livermore and DSRSD. For high water users, the rates are lower than current water rates and comparable to those of other Tri-Valley cities.
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Next Steps: Proposed Timeline & Activities

Date Milestone
May 6, 2025City Council Meeting: Review of Cost-of-Service Analysis and Recommended Rates and Rate Structure
June 3, 2025City Council Meeting: Final Water Rates, Connection Fees, Drought Rates
July 15, 2025City Council Meeting: Approve Prop 218 Notice, Accept Rate Study Repor
July 30, 2025Last Day to Mail Out Public Hearing Notices – 45 Day Comment Perio
October 7, 2025City Council Public Hearing and Potential Adoptio
January 1, 2026New Rates Take Effect

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Additional Rate Information

  • Water Rate Design Analysis Technical Memo – May 6, 2025
  • Agenda Report & City Council Presentation – May 6, 2025
  • Current rate information (as of January 1, 2025) can be found here.

Links to 2023 Rate Change Materials currently available on water rate page

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FAQs

No, the City’s top priority has been and always will be to ensure drinking water public health and safety standards are met for all Pleasanton residents and businesses. The City is prepared to meet all water demands, drought or no drought. Wise use of water by the City and our consumers is an important part of our water supply plan, and conservation is a key part of being good water stewards.
Historically, demands immediately following a drought have never gone back to pre-drought levels, so chances of this are close to zero. Instead, users gradually fall back into old habits and water use grows over several years – not months – even during the hotter weeks of the summer following a drought. More recently, acceptance of climate change has resulted in reduced water demand. We know that conservation is now a way of life in Pleasanton and throughout California, and we’ll all do our part to responsibly use our water. Our new water reality is one of the primary drivers behind our decision to use wells only as a last resort.

P.O. Box 520
Pleasanton, CA 94566

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