The primary goal of the cost-of-service rate study is to establish cost-based, equitable and proportional fees for groundwater users in the Basin necessary to support the implementation of the Groundwater Sustainability Plan (GSP) in compliance with the Sustainable Groundwater Management Act (SGMA).

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The study analyzes the 5-year budget, identifies costs related to SGMA compliance (e.g., outreach, technical support, legal fees, studies, reporting), and determines how to allocate those costs equitably among groundwater users.  

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Key Points:

• SGMA mandates that local agencies develop and implement a GSP, but the state provides no ongoing funding for the activities necessary to achieve sustainability. As a result, local landowners and groundwater users must bear these costs.

• The Rate Study process is complex and includes developing a five-year operating budget, identifying the various types of groundwater uses and classes (e.g. agriculture, commercial, rural domestic, water systems), estimating extraction volumes, determining a method of allocating expenses and designing the groundwater fee structure. The rate study essentially establishes the maximum rate that could be charged under Proposition 218. 

• As part of the process, five different budget options and associated rate structures, ranging from $3 million to $12 million per year, were evaluated..

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In January 2025, Budget Scenario 3A was selected - an average annual budget of $4.3 million over the next five years – as the preferred rate structure.  The rate study is being refined and will be presented at the Paso Robles Area Groundwater Authority meeting on April 7, 2025.