A California appeals court has ruled that San Juan Capistrano's tiered water rates are unconstitutional.
The 4th District Court of Appeal ruling Monday could have broader implications for other cities, including San Diego, that use a similar pricing structure to encourage conservation.
At least two-thirds of California's water providers use some form of the tiered rates that are at issue in the lawsuit, consultants and water lawyers said.
San Diego's Public Utilities Department charges higher prices for households that use more water. Households that use more than 36 hundred cubic feet of water a month are charged $8.766 per hundred cubic feet, while households that use less than 8 hundred cubic feet of water a month are charged $3.896 per hundred cubic feet. Each hundred cubic foot equals 748.05 gallons of water.
The ruling on Monday upholds an Orange County judge's decision that found that charging the biggest water users higher rates violates a law voters approved in 1996 that prohibits government agencies from charging more than the cost of a service.
San Juan Capistrano charged nearly four times as much per unit of water for the highest users, to encourage conservation.
Residents complained the higher rates were arbitrary and unfair.
Gov. Jerry Brown recently issued drought orders that called on local water agencies to use tiered water pricing to help save water. Brown called the court's ruling "a straitjacket on local government at a time when maximum flexibility is needed," according to the Sacramento Bee.
A 2014 study at the University of California, Riverside, estimated that tiered rate structures similar to the one used in San Juan Capistrano reduce water use over time by up to 15 percent.
