The board of Southern California's major water wholesaler voted Tuesday to effectively cut water deliveries across the region by 10% this summer.
The Metropolitan Water District of Southern California has warned for months that the state's drought and environmentally driven cutbacks in water shipments from Northern California would leave demand higher than the supply.
"We're short," said Jeffrey Kightlinger, the water district's general manager.
The cuts are the agency's first since the early 1990s drought.
The Metropolitan Water District, which imports water from the Sacramento-San Joaquin delta and the Colorado River and sells it to local water districts, will achieve the reductions by imposing penalty rates. Local utilities that use more than their allocation will have to pay more.
In anticipation, Los Angeles is poised to adopt conservation rates aimed at getting residents to reduce their water use by 15%.
Statewide water conditions have improved in recent months but they remain below average for the third consecutive year.
Total storage in the Colorado River basin is also slightly better than last year. But a persistent drought in the basin has left the river's reservoirs at 54% of overall capacity. Lake Mead, which supplies Southern California, is 46% full, although it will get more water from upstream Lake Powell as the season progresses.
Last year, the Metropolitan Water District cut supplies to agricultural customers and it has suspended regional groundwater replenishment. All told, agency officials said they will deliver roughly 20% less water than three years ago.
The reduced deliveries have meant less sales revenue for the agency, which is also facing rising costs.
As a result, the agency will hike its prices by nearly 20% in September -- in addition to the penalty rates. The increase comes on top of a roughly 14% rate increase last year.