Varying Water Rates Is Key to Economy of Southland : Indulging homeowners at the expense of industry is shortsighted. Residents have a right to fair rates but so does business. A thriving industrial base benefits us all.

The rainstorms that bruised Southern California this winter were a reminder of the impact of water on the lives of all of us who live in the Los Angeles Basin.

Often, when it comes to water, we seem to veer from one extreme to the other. Some years, a scarcity of water focuses our attention on how we control and use it. In other years, like this one, the abundance of water dominates our conversations. Both scenarios should remind us all of the importance of embracing policies that will provide for the most effective and efficient management of this precious resource, whether in short or abundant supply.

The city’s water-rate structure is a constant source of political debate. Proponents of change argue that it should be drastically revised in favor of homeowners, at the greater expense of industrial users.

On the other hand, Mayor Richard Riordan’s Blue Ribbon Committee developed a plan that provides relief to some residential users, while ensuring industrial users adequate supplies of water at reasonable rates, thereby making the city’s water rates competitive with private suppliers’ rates, and allowing the city to retain its large, profitable industrial-use clients.

The plan outlined a new, two-tiered rate structure for residential users, based on a formula that takes into account lot size, temperature zone and family size. The new structure provides for a special rate adjustment for additional water use in the summer.

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The Blue Ribbon Committee concluded that its proposed new rate structure “would be more equitable, more in line with wise water usage.”

Our water-use policies substantially affect our region’s economic vitality. As all of us who live here know, Southern California has suffered in the last few years from the loss of industry and jobs. Our state has come to be viewed by many as fostering an unfriendly business climate.

But efforts are under way to change the perception. Gov. Pete Wilson, taking note of an improving economy, declared recently, “If we do not continue to generate the jobs for a growing California, we are going to find ourselves in a downward spiral.” And Mayor Riordan has rightly emphasized improving the business climate as a crucial element in his program to turn Los Angeles around.

The interests of the city of Los Angeles and the entire basin are best served by continuing to vary the water-rate structure, both for industrial and residential users. There is no question that water is important to us all. But indulging homeowners at the expense of industry is both shortsighted and counterproductive. Homeowners have a legitimate claim to fair and reasonable rates. But so, too, does industry. Large industrial customers of the Department of Water and Power add value to the region. Their presence maintains an industrial base that benefits us all.

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Consider, for example, the Anheuser-Busch plant in Van Nuys. The brewery generates more than $2 billion in economic activity throughout the Los Angeles area. It not only employs 1,500 people but buys more than $400 million worth of goods and services from other businesses in the region.

Also among the top water users is Rockwell International, whose Rocketdyne facilities in Canoga Park employ 5,600 people and contribute more than $426 million annually to the area. Others making similar contributions include MCA in Universal City, the Kaiser Foundation hospitals, Cal State Northridge and the city of Los Angeles itself.

The Blue Ribbon Committee did not recommend that any industrial water user be provided unlimited supplies of water at bargain prices simply because the user generates numerous jobs and substantial revenues. Clearly, industrial water users must act responsibly and must enthusiastically develop and implement effective water conservation programs. In fact, industry should lead the fight to conserve water. And, often, it does.

I applaud the city of Los Angeles for the enduring nature of its rate structure. One of the structure’s underlying tenets is fairness. One of its less tangible benefits is increased stabilization of our city’s industrial base. Any attempt to prioritize excessive residential water use over industrial use will, in the long run, adversely affect everyone in the Los Angeles Basin.