SACRAMENTO, CA — Governor Gavin Newsom signed Assembly Bill 2180, authored by Assemblymember Chris Ward (D-San Diego), providing greater clarity for local water agencies when establishing rates under Proposition 218.
AB 2180 clarifies that local agencies may use reasonable methods, supported by historic, existing, estimated, or projected data, to determine the proportional cost of providing service. It also provides clear authority for uniform and tiered water rates while maintaining the requirement that rates not exceed the proportional cost of service.
“Californians deserve reliable water service at rates that are fair, transparent, and affordable,” said Assemblymember Chris Ward. “AB 2180 gives local water agencies clearer rules to responsibly set rates while maintaining strong protections for ratepayers. This will help agencies plan for the long-term needs of our water systems without passing unnecessary legal costs on to customers.”
“This legislation comes at a critical time, as water agencies strive to balance delivering safe and reliable water to Californians with maintaining affordable rates,” said Karla Nemeth, Executive Director of the Association of California Water Agencies. “AB 2180 sets clear, consistent standards for water agencies, which helps prevent costly, frivolous litigation and protects ratepayers across the state.”
The law also clarifies the reasonable factors agencies may consider when establishing tiered rates, including water supply costs, infrastructure and maintenance, peak demand, and conservation measures. AB 2180 protects both water agencies and ratepayers by reducing costly litigation and ensuring that low-use customers are not subsidizing infrastructure costs driven by high-use customers.