It’s a modest Irvine tract house, ensconced in a modest amount of greenery. Nona Demetre considers her water use modest as well – but her monthly bill shot up 34 percent over the course of a single year nonetheless.

“As a retiree, I have been very conscious about conserving water in order to keep my bill low,” Demetre protested to the Irvine Ranch Water District, detailing how her monthly bill grew to $48. “As rates have been increasing every year, it seems to be an effort in futility.”

Like many drought-plagued Californians, Demetre is vexed by paying ever more while using ever less. Irvine Ranch’s rates rose again on July 1. So even after cutting outdoor watering by a third, Demetre’s bill remains the same.

It’s a conundrum statewide: Officials demand that people conserve water. People respond, and water use goes down. But less water sold means less money flowing into public coffers, so prices rise to make up for lost revenue.

Folks feel that they’re being punished for conserving. But what else can the water agencies do to cover fixed costs, which don’t fluctuate like the rain?

“Sure, ‘use less water, pay more for it,’ is a tough pill to swallow,” said Yorba Linda Water District President Ric Collett in a letter explaining why basic service charges in the hot, hilly horse country are slated to jump from $16.77 to $41.77 this fall. “However, in reality, it’s ‘use less water, pay more to ensure it is there when you need it.’”

Southern California cities and water districts are selling less water now than they did back in 2003, but are bringing in much more money nonetheless, a Register analysis found. Rising rates are an integral part of that equation, and Irvine Ranch and Yorba Linda are not alone: The cost of water has doubled and rates at most agencies have risen in recent years, and is expected to rise even more.

• Among retail water agencies in Orange County, revenue rose an average of 54 percent over 11 years, according to data from the state controller’s office.

• Among O.C. cities that furnish water service, revenue rose 78 percent over 12 years.

• And among water managers, importers and wholesalers – agencies that pump it from the ground or import it from far away, then sell it to the agencies that ultimately sell it to you – revenue rose 46 percent over 12 years.

WATER PRICES DOUBLE

“Overall, costs are fixed and there’s a lot of capital in the ground,” said Gary Breaux, chief financial officer for the giant, 87-year-old Metropolitan Water District of Southern California, which falls into that last category.

“You’re using less but your bill may stay the same, and people are like, ‘It should go down.’ I’ve had those discussions many times, but it comes down to this: Water is essential to everyday living. The costs are to get it to the tap, safe to drink.”

MWD is the granddaddy of them all, importing water so 19 million people can live in this desert we call home. In 2003, it sold 2.3 million acre-feet of water, and had $1.1 billion in total revenue.

In 2013, despite more than a million new people in SoCal, MWD’s water sales were down considerably – by 17 percent, to 1.9 million acre-feet. But revenue had grown more than 46 percent, to $1.6 billion.

That can happen because MWD has more than doubled the price of its water, from $408 an acre-foot in 2003 to $890 in 2014. Rates went up 1.5 percent on Jan. 1, and will go up another 1.5 percent in 2016. That will trickle down to many local cities and water districts.

Groundwater – mostly pumped by the Orange County Water District – is far cheaper. But it, too, has more than doubled in cost, from $127 per acre-foot in 2003 to $276 in 2014.

That makes folks cranky.

“Rates are constantly going up and they have a half-billion dollars in their reserves,” said activist and critic John Jaeger of Irvine Ranch. “It’s outrageous.”

The economics behind water pricing are a story of economic scarcity in action, touching every Californian who washes dishes or takes a bath. They’re rooted in a fundamental disconnect: Seventy percent of California’s precipitation falls north of Sacramento, while 75 percent of the demand for water is south of Sacramento, according to the Water Education Foundation.

PLEASE DON’T BUY

One official wryly noted that water agencies are spending millions of dollars to tell people not to buy their product.

“The hard fact is that the drought has a price tag,” said Cindie Ryan, spokeswoman for the city of Brea, which imports all of its water.

“It will hit the pocketbook of everyone in California and there is no avoiding it. But employing good conservation habits now will help mitigate future costs to the best extent possible. … The price tag to California, and by extension, cities and individuals would be even higher absent strict conservation measures.”

And don’t count on El Niño to save you. Big rains often translate into even less water used, making budget holes even bigger.

Higher revenue reflects the pass-through of higher costs to consumers, as well as interest income and growing property tax revenue for the agencies that get them (not all do), officials said.

Costs have been going up as well. In addition to the rise in the price of water, it costs more to deliver it and to maintain and improve the delivery systems. Especially among cities, there has been a burst of catch-up to refresh saggy old infrastructure that was neglected when times were tight, to avoid UCLA-type flooding.

The revenue increases reflect additional millions for capital improvement projects, officials said.

“Aside from the fact that public utilities have not communicated the true value of water effectively, there is also a lack of public understanding concerning what it takes to provide safe, reliable drinking water to customers,” said Alma Flores, spokeswoman for the city of Santa Ana.

“For utilities with debt obligations, fixed costs make up anywhere from 75 to 90 percent of total costs. This percentage is lower for those utilities with no debt burden. Consequently, even if no water is sold, utilities still have significant costs that must be covered.”

To that end, how you pay for water is in the midst of change.

There are two parts to your water bill: the service charge, which is meant to cover fixed operating costs; and the commodity charge, which is supposed to cover the cost of water itself.

Historically, many agencies depended heavily on the commodity charge to make ends meet. With water consumption down, that’s changing.

‘PEOPLE CUSSing AT ME’

The starkest illustration may be in Yorba Linda, where the fixed service charge is slated to rise to $41.77 from the present $16.77. Unlike most other water districts, Yorba Linda has kept its fiscal reserves low, so it doesn’t have much of a cash cushion. The governor’s 36 percent conservation mandate for the district is translating into a sudden 36 percent drop in revenue – about $10 million.

The district needs to dramatically restructure its rates or face insolvency.

“This isn’t something we like to do and it’s not something we want to do,” said spokesman Damon Micalizzi. “Our rates have been the lowest in the land forever, and we have big green lots that people watered with abandon.

“The $700 bills subsidized those who didn’t pay as much, but that has got to change. I’ve had people cussing at me, but after we explain, they want to go out for coffee. They may not like it, but they understand.”

The average water bill in Yorba Linda is about $85 now. After a 36 percent reduction in water use and the rate hike, it will still be about $85, Micalizzi said.

The Santa Margarita Water District, one of the county’s largest, recently examined its rate structure and found that fixed charges only covered about 40 percent of fixed costs.

Even before the drought, that presented challenges, said spokesman Jonathan Volzke: Water sales, and therefore revenue, peaked in the summer and then trailed off in the winter.

In March, the district hiked fixed charges from $6.41 to $8.72 for most single-family homes, while dropping the water charge about 20 cents a unit. Four more annual increases are on the way, and the district is embracing “water budgets,” which set usage targets based on property, home and family size.

The governor’s mandatory reductions are expected to cut Santa Margarita’s revenue by $6.8 million this year, Volzke said. To absorb that, the district is delaying equipment purchases and reducing how much is socked into reserves.

DROUGHT SURCHARGE

The East Orange County Water District, which acts as both wholesaler and retailer, is exceeding its 36 percent reduction target thanks to July’s rains, and anticipates revenue losses of some $400,000, General Manager Lisa Ohlund said. It’s doing a cost-of-service analysis, and anticipates a “drought surcharge.”

“If we have a wet winter, that will further exacerbate the revenue loss, and the drought surcharge will probably stay in place longer – which will be even more upsetting to our customers,” Ohlund said.

“The vast majority are pretty understanding of the situation. I’ve been heartened by several of our customers who, while attending one of our drought outreach workshops, will come up to us afterwards and pat our arms and tell us that things will get better.”

Contact the writer: tsforza@ocregister.com