Residents are definitely seeing a price increase, said Richard Balocco, vice president of corporate communications for the San Jose Water Company.

He said the water bill has increased approximately 3.8 percent, or about $1.30 a month per household consumer. The increase went into effect on July 1.

Residents of Willow Glen, Campbell, Los Gatos, Saratoga, and parts of Cupertino and Santa Clara buy their water from the San Jose Water Company, a water retailer. All water retailers in the county must buy water from the Santa Clara Valley Water District.

"The cost of importing, storing and distributing to 13 retail agencies is increasing," said Santa Clara Valley Water District spokesman Mike Di Marco.

Since 1997 water rates have steadily increased, as existing water rates were not covering the costs, Di Marco said.

The water district builds and manages 10 local reservoirs and groundwater basins and has programs that protect water quality and aid distribution. Once the water is processed and treated, the district then sells this water to local water retail agencies, one of which is the San Jose Water Company. This year the water district increased its prices for the water company by more than 10 percent.

While $1.30 may seem like mere pennies in the bucket, water usage and pricing is a simple case of supply and demand. If there is enough water stored in underground basins and reservoirs and not a lot of people using water, there will be surplus. If on the other hand, there is not a lot of stored water but many people using water, then water conservation methods will need to be put in place. And there are the unknown factors such as natural disasters or drought. What's more, as city populations grow so does water demand.

The average consumer uses about 375 gallons of water a day. Yet not all residents will use 375 gallons a day because not everyone has a swimming pool or a lawn to water. And people have become much more water conscious after the series of droughts that struck the Bay Area from 1983 to 1993.

Di Marco said a recent report from the Bay Area Water Agency Coalition shows that since 1986 the population has grown by 20 percent but water usage has only slightly increased.

"Now almost every home has a low-flush toilet," Di Marco said.

Items like low-flow showerheads can be obtained free of charge from the water district.

In the short term, Di Marco said, everything is set for the summer. The groundwater basins are full, and the water district expects to receive most of its imported water.

"Demand has been flat for the last several years," Balocco said. "There is currently plenty of supply."

For residents who want to see how they can save water in their homes, both the water district and water company offer free water audits, during which a water company representative walks through the home and suggests ways to conserve water.

For this summer, Di Marco said, the water district is planning to launch a water conservation campaign.

"A lot of people were here during the drought," Di Marco said, "and water conservation is a part of life. But we have a lot of new residents."

The water district plans to remind people that the county only receives about 14 inches of rain a year, which is needed to support 1.8 million people, he said.

"We'll teach people simple tips like shutting off the nozzle or washing your car over the lawn," Di Marco said. "It's a constant campaign to reach people."

For more information, visit the San Jose Water Company's website at http://www.sjwater.com or the Santa Clara Valley Water District's website at http://www.valleywater.org.