Valley Water Costs

San Jose Water has submitted comments to Valley Water on its Draft 2026 Groundwater Management Plan, which serves as Valley Water’s Alternative Plan under California’s Sustainable Groundwater Management Act (SGMA).

Read San Jose Water’s full comment letter here. 

Groundwater is one of our region’s most proven and reliable water resources, and how it is managed has a direct impact on water supply reliability and customer affordability.

Approximately 42 cents of every dollar SJW charges customers is a pass-through of Valley Water’s groundwater production charges and treated water costs. Since Valley Water adopted its original SGMA Alternative Plan in 2016, its groundwater production charge passed through to SJW customers has increased 174%.

SJW’s comments call for a more active, collaborative approach to groundwater management that:

• Gives water retailers a meaningful role in water-supply and investment decisions that directly affect their customers.
• Provides better tools for managing water portfolios, including groundwater storage, carryover and transfers.
• Explores local, in-basin solutions and opportunities to make more efficient use of existing water supplies.
• Considers alternatives to relying primarily on increasingly high per-acre-foot groundwater pumping charges to manage groundwater use.
• Makes affordability, along with reliability and sustainability, a central consideration in groundwater planning.

Valley Water is considering its 2026 Alternative Plan update for submission to the California Department of Water Resources in December 2026. A public hearing is currently anticipated November 10, 2026. A copy of the plan is available through Valley Water’s SGMA webpage at https://www.valleywater.org/SGMA. 

Customer letter about Valley Water increase

 

Valley Water (VW), the wholesale water provider for Santa Clara County, increased its water rates on July 1, 2026. These changes affect all water retailers in the county, including San Jose Water (SJW).

SJW is entirely separate from VW and purchases water from them in two ways:

• Imported water treated at one of the three VW water treatment plants
• Groundwater charges for water pumped from our own wells under our own water rights

Effective July 1, 2026, due to the increase in wholesale water rates from VW, the average residential customer with ¾ inch meter using 10 CCF (centrum cubic feet) per month will see an increase of approximately $4.95 per month.

All monies collected for this rate increase go directly to VW and are known as a “pass through.” SJW does not markup or benefit from these charges. We have no power to control or reduce VW's costs. For more information, please visit valleywater.org.

VW and SJW play different roles in your water service:

• VW manages the county’s water supply and sets wholesale charges
• SJW delivers water directly to homes and businesses
• When VW increases its rates, we are required to pass those costs through to customers without any markup.
• VW is governed by their elected Board of Directors but is not regulated by the California Public Utilities Commission (CPUC). 
• SJW is regulated by the CPUC which approves every rate SJW charges. 

Separately, SJW is also recovering costs related to the deployment of our Smart Meters which includes an increase of $1.84 per month in addition to an M-WRAM surcharge of $3.02.

M-WRAM helps to ensure revenue is collected fairly under a tiered (conservation) rate structure. It does this by tracking the difference between the revenue actually collected under tiered rates and the revenue that would have been collected under a uniform (non-conservation) rate. The difference is recovered through a surcharge on the bill.

Beginning July 1, 2026, through June 30, 2027, customers with ¾ inch meter using 10 CCF/month will see an additional $4.86 increase on their monthly bill.

Smart Meter benefits for you:

•    Access your water usage anytime with easy-to-use digital tools
•    Monitor usage and better manage monthly costs
•    Receive alerts for unusual usage or potential leaks
•    Catch leaks earlier and avoid costly damage

SJW continues to focus on making thoughtful, long-term decisions that support affordability, reliability and sustainability for our customers. This includes evaluating new water supply options and infrastructure investments that can help manage costs over time. Long-term customer affordability is a top priority for SJW. 

 

 

See billing schedules here

 

See the rate increase for 2025 here