By Sharon Bernstein

SACRAMENTO, Calif. (Reuters) - Their lawns dry and their trees on the verge of dying, Californians have dramatically cut water use during the state's relentless drought, only to learn that many local utilities are hiking rates to make up for the lost revenue.

Water providers in Los Angeles, the San Francisco Bay Area and other parts of the state have recently told customers that rates will go up at least temporarily, as utilities struggle to pay for building and repairing pipes, buying water and other costs, even as customers cut back.

"Droughts are costly for water agencies," said Lisa Lien Mager, spokeswoman for the Association of California Water Agencies. "Revenues are being affected by the mandatory conservation but at the same time costs are going up."

California is in the fourth year of a punishing drought that has led farmers to fallow a half-million acres (202,343 hectares) for each of the past two years, and led Democratic Governor Jerry Brown to order mandatory 25-percent cutbacks in statewide water use.

In Los Angeles, conservation led to a $111 million drop in revenues during the fiscal year that ended July 1, a period mostly before the mandatory cutbacks kicked into high gear, Department of Water and Power budget director Neil Guglielmo said Friday.

The city is implementing a temporary increase Guglielmo says will add about $2 per month to customers' bills, while recouping about half of the losses.

Other agencies implementing or considering drought-related water rate hikes include the Contra Costa Water District, the East Bay Municipal Utility District and the San Diego Public Utilities Department.

In Contra Costa County, a suburban area east of San Francisco, utility managers implemented a drought surcharge of 50 cents for every 748 gallons (2,830 liters) used, said spokeswoman Jennifer Allen. As a result, the bimonthly bill for a customer using 300 gallons (1,135 liters) per day - a 25 percent cutback over the county's typical use when the drought began - would be $133, about $12 more than it would have been without the surcharge.

Story continues

Max Gomberg, senior environmental scientist for the State Water Resources Control Board, said that many utilities, including those serving the Southern California communities of Irvine and Riverside, had planned ahead for the drought and did not have to raise rates.

The others, he said, should expect some consumer backlash.

"From the customer's perspective, it's 'I'm conserving and now you're charging me more,'" Gomberg said.

(Reporting by Sharon Bernstein; Editing by Sandra Maler)