Coronado households that conserve water will pay more starting Jan. 1, 2027. San Diego's City Council dropped the city's tiered rate system in a 6-2 vote on Tuesday, Oct. 27.

The change affects roughly 286,000 customers across San Diego, Coronado, Imperial Beach and Del Mar, according to the San Diego Union-Tribune. Under the new structure, every customer pays the same per-unit price for water regardless of how much they use.

The city is not collecting more money under the new rate structure, according to a city press release. It redistributes an overall 14.5% rate increase for 2027 that the council had already approved. The shift hits conservers hardest.

Low-volume single-family homes will pay $5.62 more per month than they would have under the old tiered system. That is a 7.1% increase. Medium-volume users will pay $7.72 more per month, a 5.9% bump, the Union-Tribune reported.

High-volume homes with large lawns or pools will see a $19.52-per-month discount, a 5.9% drop. Apartments and condos with roughly 10 units will pay $15.17 less per month, and irrigation customers will see a $48 monthly drop.

Why the change

A 2025 court decision in Patz v. City of San Diego found the city's tiered rates violated Proposition 218, the state measure requiring that utility rates reflect the actual cost of service. The court ruled San Diego could not prove it costs less to serve low-volume customers, the Union-Tribune reported.

Councilmember Sean Elo-Rivera, who voted yes, said the new structure penalizes conservation and rewards those who ignored decades of water-saving efforts. "This is a court order, not a policy choice," he said, according to the Union-Tribune.

Councilmembers Kent Lee and Henry Foster voted no. Lee said the 14.5% hike hits people barely making ends meet, the Union-Tribune reported. Councilmember Marni von Wilpert was absent.

The city received 3,644 formal protests against the new rates, far short of the roughly 50% threshold needed to block them.

What comes next

A new state law, AB 2180, signed by Gov. Gavin Newsom on Sept. 27, could eventually let cities bring back conservation-based tiers under a lower legal standard. But Lisa Celaya, the city's executive assistant director of public utilities, told the council San Diego does not plan to use the law to revive tiered rates until 2030 at the earliest, the Union-Tribune reported. She said the city wants to wait for the California Supreme Court to rule in Dreher v. City of Los Angeles Department of Water and Power, a pending case testing tiered rates.

No on-the-record response from Coronado city officials about the rate restructuring's local impact appeared in available public records as of publication.

San Diego officials also agreed to explore a subsidy program for low-income customers, funded by non-rate revenue such as Public Utilities land leases and solar panels on city facilities.