SF Utility Commission Approves Rate Hikes, $35.5 Million Wastewater Upgrade

Household water and sewer bills across San Francisco are set to climb by roughly $21 a month starting in fiscal year 2027 under a rate framework the San Francisco Public Utilities Commission advanced in late March, alongside a separately approved $35.5 million wastewater upgrade that the commission voted through at its March meeting.

The proposed increases, if approved, would take effect July 1, 2026. The SFPUC projects a combined monthly bill increase of $21 for the average San Francisco residential household in fiscal year 2027 and $23 in fiscal year 2028, representing annual increases of approximately 12.6% and 12.5% respectively. The commission pointed to a 2023 independent rate study, the most recent of the five-year reviews required under state law, as the basis for the proposal. Independent rate analysts recommended the increases to address operating and capital improvement needs.

The SFPUC framed the timing as a cost-control measure: "Taking action now to improve these systems will save money in the long run. The longer we wait to make needed upgrades, the more they will cost." The agency also noted that even after the proposed increases, the average San Francisco customer's combined water and sewer bill would remain below current bills in Los Angeles and Santa Clara, and only slightly above those in Oakland and San Jose.

Alison Kastama, a communications manager with the SFPUC, has emphasized that the utility's funding model relies entirely on ratepayers, not tax dollars. "The work is funded by customer rates, not by taxes, for the not-for-profit public utility," Kastama said. "The cost is equated for the operating, maintaining and upgrading of the water and sewer systems."

The $35.5 million wastewater upgrade approved at the March meeting adds to that capital picture. The commission did not release project-level details at this stage, including which facility or infrastructure component the funds target or when construction is expected to begin.

The SFPUC's rate-setting process is governed by its Ratepayer Assurance Policy and state law, requiring public hearings and transparency benchmarks before any new schedule takes effect. Residents with questions about the proposed rate changes can contact the agency at ratesinfo@sfwater.org.

The water and sewer rate proposal is separate from a recent SFPUC action on electricity. The commission also approved a 20% to 25% reduction in CleanPowerSF electricity supply rates, intended to offset a 15% to 25% rise in PG&E delivery charges that appear on the same bill. CleanPowerSF, the city's community choice electricity program, serves more than 385,000 residential and business customers across San Francisco.

The SFPUC delivers drinking water to approximately 2.7 million Bay Area residents through the Hetch Hetchy Regional Water System, which draws from its namesake reservoir in Yosemite National Park. That scale means rate decisions in San Francisco ripple well beyond city limits, as downstream wholesale customers in cities including Mountain View have seen in prior rate cycles.