Category: Water Supply

Drought Watch: Rethinking Urban Water Pricing

This is part of a continuing series on the impact of the drought.

The California Water Resources Control Board adopted a statewide policy last month requiring local agencies to implement drought plans, including restrictions on outdoor water use. Local agencies have responded in a variety of ways. Some have imposed mandatory cutbacks while others are still only asking their customers to make voluntary cutbacks. Mandatory water use restrictions can be more effective and, according to the July PPIC Statewide Survey, 75 percent of Californians say they strongly favor them. So why aren’t more water agencies enacting mandatory cutbacks during this crisis?

Last month, Jay Lund—a professor of civil and environmental engineering at UC Davis and an adjunct research fellow at PPIC— outlined some of the factors that might cause local agencies to shy away from mandatory restrictions. One important factor is that when conservation measures work, agencies sell less water and their revenues fall. But the costs of providing water services do not decrease as much, so agency balance sheets can end up in the red. As a result, investments in system maintenance and upgrade generally take a hit, and agencies often have to increase rates. This sends a confusing signal to customers, who just did what was asked of them.

There is an alternative: drought pricing. Charging more per gallon during drought years provides an additional conservation incentive and ensures that agencies can cover costs while they are selling less water. According to a June survey by the State Water Resources Control Board, only 4 percent of urban agencies have enacted drought pricing strategies. The city of Roseville is one community using the drought pricing tool, which was adopted—and vetted with customers—before the drought hit. In June, Roseville implemented a temporary 15 percent drought surcharge while also mandating a 20 percent reduction in water use.

Like most things that alter the status quo, drought pricing policies require effective communication with ratepayers. Agencies need to emphasize the need for higher prices alongside increased conservation during droughts to ensure customer buy-in. But a big advantage of a drought pricing policy is that customers understand in advance that prices need to go up to keep their water system solvent, rather than feeling blindsided by a rate increase after the fact. While they require additional effort—and advance planning—by local agencies, drought pricing policies result in better financials and customer relations while contributing to the primary goal of reducing water use during times of scarcity.

Drought Watch: Trends in Urban Water Use

This is part of a continuing series on the impact of the drought.

Most of California is now in an exceptional drought, but water use statewide has actually increased over the last year. In response, the state has imposed short-term restrictions intended to help us get through the current drought. As state and local water agencies look beyond the current emergency for ways to adapt to a future in which droughts are likely to be more frequent and more severe, it is instructive to examine and compare urban use in two relatively normal water years, 2000 and 2010.

First, the good news: Total statewide urban water use (for residential, commercial, and industrial purposes) decreased by 12 percent from 2000 to 2010, even as California’s population increased by more than three million. Reductions have been especially significant in central and southern California, where investments in conservation programs and new technologies seem to be paying off. In the commercial and industrial sectors, water use fell 36 percent and 18 percent, respectively, while residential interior water use declined by 20 percent overall and 27 percent per capita. The Great Recession probably played a role in these reductions, so it will be interesting to see if this trend holds as the economy continues its recovery.

Now for the bad news: Outdoor water use for both residential exteriors and large (commercial or public) landscapes rose 12 percent across the state between 2000 and 2010. This trend was largely driven by increases in southern California—in marked contrast to the region’s reductions in indoor water use. And it is likely to persist as California’s population continues to grow, especially in hot and arid inland areas with a higher proportion of single-family homes (which use twice as much water outdoors per household as multi-family buildings) and large lots.

One important takeaway is that more stringent building codes, increasing efficiency requirements, and new technologies seem to have resulted in more efficient indoor water use. But when it comes to landscaping, any improvements in irrigation technology seem to have been offset by our taste for large lawns and plants that need a lot of water (and our habit of overwatering them). To encourage long-term reductions in outdoor water use, agencies can implement new pricing structures, turf buy-back programs, and public education programs emphasizing drought-friendly landscaping. After our current water emergency ends, these long-term incentives and outreach efforts can help us be better prepared for future droughts.

(The map below shows the change in per capita outdoor urban water use between 2000 and 2010 in each hydrologic region. To see details of the state’s hydrologic regions, including county boundaries, visit our Map Room.)

Chart source: California Department of Water Resources.

Drought Watch: Our Thirsty Lawns

This is part of a continuing series on the impact of the drought.

The unprecedented restrictions on outdoor water use that the state enacted this week send a message that Californians need to conserve more water. But we can do more to move toward sustainable consumption. To help the state get through this drought—which may continue into 2015—and prepare for a future that will include repeated droughts, local agencies should go further to encourage long-term changes in how we use water outdoors.

Outdoor water demands—which account for roughly half of all urban water use—are highest during the hot, dry summer months. Experts regularly cite reductions in landscape watering as “low hanging fruit” during droughts. But, as we’ve learned, it is not enough to just ask people to cut back: during the 2007–2009 drought, outdoor water use did not significantly decline despite repeated calls for conservation.

The main culprit is Californians’ love affair with lawns. Not only do lawns require a lot of water to look good, but people also tend to overwater them. Water agencies should seize the opportunity presented by the drought—and the publicity surrounding the new restrictions—to offer incentives for switching out thirsty lawns. For instance, Long Beach has a turf buyback program that offers rebates to customers who replace grass lawns with low-water-using plants—which have the added benefit of lending themselves to more-efficient irrigation systems. Finding attractive alternatives to lawns is easier than ever before, now that major garden retailers offer a range of California-friendly plants. Gone are the days of cacti and gravel being the only options.

Water pricing can also motivate customers to make the switch. Tiered rate structures—which charge a higher price per gallon for higher use—help send a message about the real costs of our landscaping choices. More than half of urban water agencies currently have some form of tiered rates, though recent legal challenges to their constitutionality under Prop 218 threaten to undermine these very important tools.

During droughts, it makes sense for water agencies to charge higher prices per gallon than they do in normal years. This provides additional conservation incentives while ensuring that agencies bring in enough to cover costs when they are selling less water. The city of Roseville, for example, implemented a temporary 15 percent drought surcharge starting in June. But according to a State Water Resourses Control Board survey, only 7 percent of agencies have enacted drought pricing strategies this year.

So far, no region has reached the governor’s 20 percent conservation goal, and water use has actually increased in some regions. Over the next few months we will see whether increased watering restrictions and threat of fines can deliver the conservation message to all Californians.

Drought Watch: Putting Some Myths to Rest

This commentary was first published by the Sacramento Bee on July 6, 2014. Drought Watch is a continuing series on the PPIC Blog.

As the effects of the drought worsen, two persistent water myths are complicating the search for solutions. One is that environmental regulation is causing California’s water scarcity. The other is that conservation alone can bring us into balance. Each myth has different advocates. But both hinder the development of effective policies to manage one of the state’s most important natural resources.

Let’s consider the first myth, that water shortages for farms are the result of too much water being left in streams for fish and wildlife.

Continue reading on Sacbee.com.

Allow Water Rights Trading

This commentary was published by the New York Times on June 29, 2014, in a discussion of The Water Crisis in the West.

We have an outdated water rights system in the American West: Water goes to those who claimed it first, whether or not they are putting it to the best use.

This system originated out of practicality. The climate in the West is dry for much of the year, and with Western rivers few and far between, it’s often necessary to invest in storage and conveyance to get water to where it is needed. But the rights to use water were allocated many decades ago, when the region had far fewer people, and before it was widely recognized that the system often short-changed the environment. …

Continue reading on nytimes.com.

Drought Watch: Regional Solutions

This is part of a continuing series on the impact of the drought.

Across California, local water agencies are scrambling to apply for new state matching grants authorized under February’s emergency drought legislation. The program aims to accelerate the use of remaining state bond funds for integrated regional water management: activities in which local agencies team up to generate mutual benefits. One example—water suppliers and stormwater agencies that work together to incorporate captured stormwater into local water supplies. Such projects can simultaneously enhance water supply reliability and the quality of water in rivers and coastal areas.

Regional integration has already led to some significant successes, most notably the enhanced ability of urban water suppliers in Southern California and the Bay Area to cope with the current drought. Successes include ramping up water conservation and recycled wastewater storage to increase supplies in storage, and building new connections between local water systems to enable emergency sharing. Outside funds are often needed to jump start these collaborations, both to encourage innovation and to enable some partners—such as stormwater agencies – to participate even if they don’t have the necessary funds.

But as we showed in our study Paying for Water in California, integrated regional water management is on the brink of fiscal failure because state bond funds are running out. Both the legislature and local water agencies have pushed the idea that bonds should continue to provide these dollars, and the major bond proposals under consideration include substantial new funds for this purpose.

But there might be a better way: adding a small statewide surcharge on water use to support regional projects. Local water agencies have often rejected this idea, arguing that if they send money to Sacramento they won’t see it again. But what if the funds go directly to the regions?

Here’s how we think this could work. The legislature (or state voters) would pass the surcharge and set broad criteria for funding eligibility. The funds would be apportioned to the state’s 12 principal hydrologic regions—the large basins that are already used to divvy up bond funds. But rather than having state agencies award the grants, this task would go to new Regional Water Commissions—regional counterparts to the California Water Commission, the state body tasked with awarding matching grants for storage projects under most bond proposals.

Though more politically tricky to pass than a bond, the statewide water surcharge would have numerous advantages. The revenues would be more reliable than bond funds. And relying on Regional Water Commissions to allocate these dollars could encourage broader collaborations than we have seen from the state-sponsored grant program, which has nearly 50 planning regions, often too small to reap the real benefits of integration. Many groundwater basins, for instance, have different boundaries than the current planning regions, and groundwater agencies could use assistance from these regional funds to support better management.

Finally, this statewide option is preferable to creating local or regional surcharges, which can be difficult to raise without approval of two-thirds of local voters. To raise $200 million annually—the amount that’s been available through bonds—a surcharge 7.5 cents/1,000 gallons on urban water bills would suffice. This would increase the average cost of tap water by just 2.8 percent, while creating a valuable incentive fund that helps local water managers enhance the quality and reliability of regional water supplies. As part of a package with a new bond devoted to areas of true statewide need, a statewide water surcharge would help ensure that our water system can support a healthy economy, society, and environment.

Local Water Funding in the June Primaries

Much of the current water talk in Sacramento surrounds a new state water bond for the November ballot. Yet as we show in our study Paying for Water in California, most water spending—84 percent—is actually raised locally. While passage rates on local water measures have been fairly high since 1995 (72 percent passing), few make it on the ballot (on average only six per year). This is largely because funding for many critical water services—including stormwater management, flood protection, and ecosystem and watershed improvements—often requires two-thirds of voters to approve, and local officials are reluctant to put such measures on the ballot unless they think they can win. In the June 3 primary election, only two local water measures were proposed. The results illustrate the challenges of funding water services that require direct voter approval.

In Contra Costa County, Orinda’s Road and Storm Drain Repair Bond passed with 75 percent approval. It authorizes the city to issue $20 million in general obligation bonds to fund the restoration and repair of roads and storm drains, plus a property tax increase to pay for the bonds. Broader funding measures like this—which include a water service along with something else—have generally been more successful than exclusively water-focused measures. Local governments seem to have recognized this reality and have increased these kinds of measures in recent years. Unfortunately, measures that fund multiple activities may generate less funding than is needed to fill water service gaps.

The second local water measure, the Lake County Healthy Lake Tax, failed with 64 percent approval (repeating an earlier failed attempt in 2012 that had 63 percent approval). It would have increased the local sales tax by one-half cent for 10 years to pay for the eradication of weeds, algae, and invasive mussels from Clear Lake, the restoration of wetlands, and the improvement of water quality.

As the Lake County example suggests, the two-thirds voter threshold for local special taxes and bonds is a significant obstacle. Orinda twice failed to pass measures in the mid-2000s, despite 64 percent approval. Since 1995, 65 percent of the measures requiring two-thirds approval passed, but 84 percent would have passed at the 50 percent threshold that is required for local general taxes and statewide fiscal measures. We can’t know how many more measures would have been put on the ballot had the voter threshold been lower.

Funding these essential water services through local tax and bond measures is a marked contrast to funding for water supply and sewer services, which are paid for with revenues from monthly customer bills. These services are generally in good fiscal shape because when new funds are needed, providers are required only to give customers the opportunity to protest rate increases.

To help address water funding gaps, California should consider treating flood and stormwater services like water and wastewater. It would also be helpful to treat local special taxes like local general taxes and statewide fiscal ballot measures—requiring a simple majority vote. Of course, this would require constitutional reforms. But without these changes, the state will need to provide much more support to local governments to pay for services that are essential to all Californians.

Drought Watch: Groundwater, Our Hidden Asset

This is part of a continuing series on the impact of the drought.

The drought has brought the term storage to the forefront of political debate over how to manage water in California. Water scarcity during this drought is perceived by many, including prominent elected officials, as a failure of government to build sufficient storage.

For most, storage refers to water kept in reservoirs behind dams. People tend to forget that we also store water underground, in the state’s many aquifers. And during a drought, this groundwater storage is usually much more important.

Managed well, groundwater is the state’s best hedge against drought. The volume of potential groundwater storage in California is several times greater than surface storage. On average, about 35 percent of annual water use for cities and farms comes from groundwater, and 60 percent or more in some important agricultural regions such as the Tulare Basin and the Central Coast. During a severe drought such as this one, when groundwater pumping increases, this share can go up significantly. But groundwater is not easing the effects of this drought as much as it could because we don’t manage it as drought storage.

A fundamental principle of sustainable groundwater management is that you allow water to accumulate in aquifers during wetter years so that you can pump it out during the dry years when surface water sources are insufficient. In most of California’s main agricultural areas—especially the southern Central Valley and parts of the Central Coast—the total water demands are so great that we have stopped allowing groundwater levels to recover during the wetter years. Instead, we are “mining” groundwater, treating it like oil and gas, extracting it as if it was a non-renewable resource never to be replaced.

This mining—or overdraft—reduces the available supply of groundwater during dry years. It raises the costs of remaining supplies, as wells need to be drilled deeper and electricity bills rise because water has to be pumped from deeper depths. Unsustainable pumping also creates a host of other problems, including dewatering of rivers and wetlands that support fish and wildlife as well as land sinking—or subsidence—that damages roads, bridges, canals, and flood control infrastructure.

Some of California’s large urban areas—including much of Southern California and Silicon Valley—provide valuable lessons on how to move toward more sustainable management of groundwater basins. In these areas, acute groundwater overdraft spurred groundwater users—often with the aid of the courts or the state legislature—to develop management schemes that work. These groundwater basins are overseen by court-appointed water masters or special management agencies that can collect fees, monitor use, and allocate pumping rights. Most important, they can compel users to store water during wet times, so it is available when drought strikes.

A silver lining of the current drought is that it has brought focus to how we manage groundwater, the other water storage in California. Innovative proposals for comprehensive reform are coming from the Brown administration and from grassroots efforts orchestrated by the Association of California Water Agencies and the California Water Foundation. These proposals have the common goal of creating sustainable groundwater management by

  • providing local agencies the tools necessary to manage groundwater sustainably, and
  • giving the state the power to ensure that these standards are achieved if local agencies fail to act.

Now is the time to move forward on this issue, while the consequences of groundwater overdraft are at the center of debate and impacting so many.

Drought Watch: Keeping Better Track of Water

This is part of a continuing series on the impact of the drought.

In most years, the arrival of May signals the end of the rainy season. As California transitions from hoping for rain to managing its absence, it is appropriate to assess how we have handled this drought so far. In a recent blog post, we, along with our colleagues at UC Davis, UC Hastings, and Stanford University, identified several key lessons from the current drought. One of these is the need to modernize the way we track water supply and use.

To illustrate, just this past week the State Water Resources Control Board released a series of graphs that summarize the gaps between projected supply and demand for this year. These graphs form the basis for determining who may be told to curtail the amount of water they take out of rivers when supplies are scarce. The take-away from these projections is that significant shortfalls will occur starting this month—when the irrigation season starts in earnest. Under California’s water rights system, irrigators holding junior water rights—i.e., rights established more recently—could be completely cut off in most areas. It also appears that unprecedented cuts will occur for senior water rights holders as well.

Although these demand and supply curves appear precise, the state board is handicapped by a lack of good information on water supply and use. To manage the drought more effectively, the board needs better information in two key areas.

First, there have been major advances in technology that can be used to measure flow. These include sophisticated remote sensing techniques, computer modeling, and sensor networks. Although there has been progress, the state has been slow to adopt these new technologies. For many rivers the board, and its partner the California Department of Water Resources, are, at best, making educated guesses. In addition, the state uses protocols for managing this information that were adopted in the early 20th century. In a drought there is need for real-time information and forecast-based projections to manage diminishing supplies.

Second, who uses how much water, and when, is acutely important when river flows are low, because a handful of users can have great impact. Although reporting on water use has improved since legislation passed in 2009, the board has not been in a position to verify the accuracy of self-reporting by thousands of water rights holders, including the oldest, most senior water right holders. Statewide, there is no comprehensive understanding of how and when water rights holders make use of alternative supplies, including the state’s overdrafted groundwater basins.

Since the economic, social and environmental consequences of water management during a drought are especially high, people understandably want to see the board administering diversion curtailments with precision and in real time. But during the wet periods, the legislature and state agencies tend to ignore this issue because there is more water to go around and little public pressure to correct information gaps. Then, when the wet inevitably turns to dry, there are insufficient time and resources to address the problem.

Droughts provide the political and economic motivation to get our water management system into better shape. Step one would be to invest in modernizing the way we measure, forecast, and administer water use—hopefully before the next drought.

Videos Highlight Water Finance Event

The drought has focused attention on water supply and highlights the crucial role of funding in supporting our water system, said Ellen Hanak, PPIC senior fellow, at a half-day conference PPIC hosted last week at the Sacramento Convention Center. The conference focused on the issues highlighted in the PPIC report Paying for Water, which pinpoints funding gaps in five key areas of water management. Hanak opened the conference with a presentation of her report, starting with an overview of how California pays for water. She noted that state general obligation bonds make up just a small part of the $30 billion spent annually on the water system.Most funding, about 85 percent, comes from local sources—rates, fees, and taxes. However, legal obstacles make it difficult for local agencies to raise money. Hanak then summarized the areas in which the state is failing to deliver the level of services California residents expect. She closed with a roadmap of recommendations for funding reform.

In the first panel discussion, experts from local water agencies and the governor’s office took up the issue of “fiscal orphans” for which there is no clear revenue stream—areas such as flood control, stormwater, and safe drinking water for small, disadvantaged communities. panelists talked about their challenges and successes in building better integrated systems in these orphan areas.

The second panel tackled a series of tough questions: How can the state partner with local and regional agencies to improve water management? What has the state done well and what can it do differently? Panelists with both state and local perspectives joined this lively discussion.

The third panel considered some of the legal challenges posed by Propositions 218 and 26. Panelists said these constitutional amendments have pushed water authorities to be more transparent in their use of taxpayer funds. But the measures and the courts’ interpretations of them have also made it more difficult to fund water solutions.