This post gives an overview of the organization of water utilities in California. For this purpose, water utilities are defined as entities that own and operate public drinking water systems at the retail level. There are few sources of information about who provides water utility service in the state, and this post offers only an overview of the topic. The data used for the analysis in this post was derived from a proprietary database I have of all water utilities in California.
Water utilities in California may be organized as one of six general types: cities, county districts, special districts, public utilities, mutual water companies or mobile home parks. The distribution of water systems by number and population served are shown in the figures below. As you can see, cities, special districts and public utilities dominate in terms of the population served, but there are large numbers of mutual water companies and mobile home parks. That occurs because most mutuals and mobile home parks are relatively small.
Cities. There are 482 incorporated cities in California, and 285 of those (roughly 60 percent) own and operate water utilities. Not surprisingly, the largest city water system is owned by Los Angeles and serves approximately 4.1 million people. Other large systems are owned by San Diego (1.27 million people) and San Francisco (800,000 people), which operates its utility through the San Francisco Public Utilities Commission. Together, cities provide water service to almost 20 million Californians, slightly more than half of all state residents.
County Districts. There are 129 county districts in California. These may take several different forms, such as county service areas, county water works districts and county maintenance districts, but all are owned and operated by county governments. The districts are operated as separate enterprises, although many receive financial assistance from the county general fund due to their small, uneconomical size. These districts tend to lie in rural areas, with the majority serving fewer than 1,000 people.
Special Districts. California has 537 special districts that own and operate public water systems, serving a total of 10.6 million people. That makes special districts the second-largest category of water providers in the state, behind cities. Special districts may be of many different types, with each type governed by its own statute. In addition, there are a number of special act districts, each of which was formed directly by the Legislature pursuant to a statute that applies only to that district. Special districts are governed by an independent board elected by registered voters within the district (with the exception of California water districts, which hold landowner elections). Some special districts provide multiple public services, while many focus on water service alone. The number and population served by special districts are shown in the figures below. Districts included in the “Other” category include resort improvement districts, resource conservation districts, sanitary districts, water conservation districts, water storage districts and special act districts.
Public Utilities. There are 138 public utilities in California, including eight Class A utilities with more than 10,000 customers. Public utilities are organized as private corporations, with their stock owned by shareholders for investment purposes. Of the 138 companies operating in California, four are publicly traded, two are owned by investment funds, and the remainder are closely-held businesses. Public utilities are subject to comprehensive regulation by the California Public Utilities Commission regarding water supplies, capital improvements, service quality and water rates.
Many of the larger public utilities own more than one water system, so that the 138 companies own a total of 255 separate systems. Together, public utilities serve almost 5.5 million people in California, 15 percent of the state’s population. The largest public utility is California Water Service Company, which serves approximately 1.8 million people through 48 systems.
Mutual Water Companies. Mutual water companies are private organizations owned and controlled by their customers. They are often formed in connection with real estate subdivisions, and some operate through the organization of a homeowners’ association. I have written extensively about mutual water companies in prior posts. In California, there are approximately 1,200 mutual water companies, of which 1,100 operate as water-specific organizations and 100 perform multiple functions as homeowners’ associations. While most mutual water companies are small, some provide service to more than 10,000 people. Combined, mutual water companies serve approximately 1.3 million residents in California.
Mobile Home Parks. Many mobile home parks provide water service to their tenants, since municipal and private utility companies have difficulty in serving individual mobile homes. Some mobile home parks purchase water from larger utilities for resale to their tenants, while others own and operate surface water diversions or groundwater wells. Currently, there are 467 mobile home parks operating public water systems in California, serving a combined population of 75,000. There are special rules governing mobile home parks, and they are subject to limited oversight by the California Public Utilities Commission.