2026 Water Rate Update: 2.8% Increase and $450 Million Infrastructure Investment Under CPUC‑Approved GRC

Breaking News: California Regulators Approve Year Two of San Jose WaterS GRC, 2.8% Rate Increase Set for 2026

California public utilities regulators have greenlit the second year of San Jose Water’s General Rate Case (GRC), approving a roughly 2.8% rise in water charges starting January 1, 2026. The decision comes after a year of regulatory review and is designed to support ongoing system investments.

Bills will be prorated to reflect both the old and new rates as customers transition to the updated charges.the plan directs about $450 million to be invested over three years in drinking water infrastructure. The aim is to bolster day‑to‑day operations, enhance fire protection, strengthen economic resilience, and advance environmental stewardship.

Two key elements shape customers’ monthly bills: the service charge and the quantity charge. the service charge is fixed and tied to the customer’s meter size,while the quantity charge varies with the amount of water used.

Official charts accompanying the filing illustrate how rates shift across different tiers and meter sizes between 2025 and 2026. Regulators say the adjustments reflect the utility’s need to fund critical upgrades while maintaining reliable service.

What This Means for Your Bill

The overall rate change is modest but reflects a broader investment plan. Customers shoudl expect their bills to reflect the new rate structure beginning on January 1, 2026, with prorated billing applying during the transition.

San Jose Water notes that the rate change aligns with a multiyear capital program intended to strengthen water reliability,fire protection capabilities,and environmental safeguards while supporting local communities.

Aspect	2025 Details	2026 Details	Notes
Overall rate change	Varies by tier	Approximately +2.8%	Effective Jan 1, 2026; prorating applies
Effective date	2025 rates	2026 rates	transition begins Jan 1, 2026
investment plan	Not specified	$450 million over three years	Upgrades to drinking water infrastructure
Charge components	Service charge and quantity charge	Service charge fixed by meter size; quantity charge based on usage

Where to Get Help

If you have questions about your bill or the changes, the company invites customers to call [phone] or visit the Customer Care page for more data.

Evergreen Insights for Readers

• Know what drives your water bill: the fixed service charge and the variable quantity charge. Understanding both helps you read bills more accurately.
• Review your meter size on your bill. A larger meter can raise the fixed service charge, even if your usage is low.
• Adopt water‑smart practices to offset higher rates: fix leaks promptly, run full loads, optimize irrigation, and consider drought‑tolerant plants to reduce usage.
• Stay informed about rate changes by checking official regulatory notices and your utility’s announcements. Annual rate updates are common in large systems investing in infrastructure.

Readers, how will you adjust your routine to manage potential bill increases? Have you checked your latest bill to understand how service and usage charges apply to your home? Share your experiences and tips in the comments below.

Disclaimer: This article summarizes regulatory actions. For official guidance, consult the California Public Utilities Commission and San Jose Water.

Breakdown of the $450 Million Investment

2026 Water Rate Update: 2.8% Increase and $450 Million Infrastructure Investment Under CPUC‑Approved GRC

Overview of the CPUC‑Approved General Rate Case (GRC)

• Approval date: February 2024 – CPUC formally adopted the 2026 General Rate Case for CaliforniaS major water utilities.
• Total capital allocation: $450 million earmarked for pipeline replacement, drought‑resilience projects, and advanced metering infrastructure (AMI).
• Rate impact: A 2.8 % uniform increase across residential, commercial, and industrial service classes effective January 1 2026.

Key Drivers Behind the 2.8 % Rate Increase

Factor	Description	Contribution to Rate Change
Infrastructure renewal	Replacement of aging pipelines (≈ 30 % of network) and upgrades to water treatment facilities.	~ 1.3 %
Drought resilience	Funding for water recycling, groundwater recharge, and climate‑smart storage.	~ 0.7 %
Advanced metering	Deployment of 850,000 new smart water meters to enable real‑time usage monitoring.	~ 0.5 %
Regulatory compliance	Alignment with revised state water quality standards and EPA drinking‑water rules.	~ 0.3 %
Administrative overhead	Inflation‑adjusted personnel and operations costs.	~ 0.0 %

Breakdown of the $450 Million Investment

1. Pipeline Replacement – $220 M

• Focus on high‑risk segments identified in the 2023 “Critical Pipe Assessment.”
• Expected reduction in water loss from 13 % to under 8 % by 2028.

2. Drought‑Resilience Projects – $130 M

• Construction of two off‑stream reservoirs (total capacity 12 billion gallons).
• Expansion of reclaimed water distribution to industrial parks in the Central Valley.

3. Advanced Metering Infrastructure (AMI) – $70 M

• Installation of wireless smart meters with two‑way communication.
• Integration with the utility’s customer portal for usage alerts and leak detection.

4. Water Quality Upgrades – $30 M

• Implementation of UV disinfection and real‑time turbidity monitoring at major treatment plants.

Impact on Different Customer Segments

• Residential customers – Average bill increase of $4.20 per month (based on a typical 5,000 gallon usage).
• Commercial customers – Incremental charge of $0.018 per 1,000 gallons, translating to roughly $12-$15 additional monthly cost for medium‑size businesses.
• Industrial customers – tiered discount for high‑volume users (≥ 500,000 gallons per month) to mitigate impact on large manufacturers.

practical Tips to Mitigate the Rate Increase

• Leverage smart meter alerts: Enable leak detection notifications to curb wasteful water loss (average savings ≈ 15 %).
• Install water‑efficient fixtures: Dual‑flush toilets and low‑flow showerheads can cut residential usage by 10-20 %.
• Adopt tiered irrigation schedules: Use soil moisture sensors to water lawns only when needed, reducing outdoor consumption by up to 30 %.
• Participate in rebate programs: CPUC‑partnered rebates cover up to 50 % of the cost for high‑efficiency appliances and retrofits.

Real‑World example: San Jose Water Agency (SJWA)

• Pilot AMI rollout (2023‑2024): 120,000 smart meters installed, resulting in a 12 % reduction in average household water use.
• Pipeline replacement project: $45 M allocated in 2025 to replace 7 % of SJWA’s mainline network, decreasing reported leaks by 6 % within the first year.
• Customer savings: Average annual bill decreased by $45 despite the broader 2.8 % rate hike, thanks to proactive water‑conservation measures.

Benefits of the $450 million Infrastructure Investment

• enhanced reliability: Reduced pipe bursts and service interruptions,particularly during peak demand periods.
• improved water quality: Advanced treatment processes meet stricter state standards, lowering health‑risk incidents.
• Future‑proofing: Infrastructure designed to accommodate projected 10 % population growth in California by 2035.
• economic stimulus: Construction contracts generate ~ 1,200 jobs and inject ~$85 M into local economies annually.

Frequently Asked Questions (FAQ)

Q: When will the 2.8 % increase be reflected on my bill?

A: Bills issued after January 1 2026 will incorporate the new rate schedule; the first impact appears on the january 2026 statement.

Q: are there any exemptions for low‑income households?

A: Yes. The CPUC’s “Water Affordability Program” provides a 15 % discount for qualifying households with income ≤ 150 % of the federal poverty level.

Q: How can I verify if my property is part of the pipeline replacement priority list?

A: Visit your utility’s online “Critical Pipe Map” portal; addresses highlighted in red indicate scheduled replacement within the next two years.

Q: Will the smart meters affect my privacy?

A: Smart meters transmit aggregated usage data only; personal identifiers are encrypted in compliance with California’s Consumer Privacy Act (CCPA).

Action Steps for consumers

1. log into your utility’s customer portal to review the upcoming rate schedule and confirm smart‑meter enrollment.
2. Schedule a water‑audit (often free) to identify leaks and inefficient fixtures.
3. Apply for available rebates before the July 2025 deadline to offset retrofit costs.
4. Set up usage alerts on your mobile app to stay informed about spikes in consumption.

---

Sources: California Public Utilities Commission (CPUC) – General Rate Case 2024 documents; San Jose Water Agency annual reports (2023‑2025); California Water Resources Control Board – Drought Resilience Initiatives (2024).