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2026 Valley Water Rate Increase

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Effective July 1, 2026

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. 

July 1, 2026 Water Quantity Rates chart

Bill Comparison Chart (3/4-inch meter)

July 1, 2026 Service Meter Charge

 

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See billing schedules here

 

See the rate increase for 2025 here

 

FAQ Accordion

FAQ

  • SJW pays imported water charges and groundwater fees to VW.
  • SJW buys “imported” water from VW’s three water treatment plants: Rinconada, Santa Teresa and Penitencia.
  • SJW also pays a groundwater pump tax to VW when we pump water from our wells.
  • We have approximately 100 wells throughout our service area.
  • VW is responsible for managing the county’s groundwater basin.

SJW has three sources of water: imported, groundwater and local surface supply.

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