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California Steps toward Statewide Centralized Water System

With California Governor Jerry Brown’s April 1, 2015 Executive Order and the State Water Resources Control Board’s (“Water Board”) resulting Draft Regulatory Framework, California has taken an extensive regulatory approach to dealing with unrelenting drought conditions.

The Water Board released its “Mandatory Conservation Proposed Framework” on April 7, 2015, as part of a rulemaking package that addresses provisions 2, 5, 6 and 7 of the 31 provisions in the Executive Order.

Provision 5 is aimed at reducing potable use among commercial, industrial and institutional (“CII”) sector water users.  To gauge compliance among the CII users and evaluate actions taken by water suppliers to reduce CII potable use, water suppliers must report on use in the CII and large landscape customers.

Provisions 6 and 7 are simply-stated requirements, prohibit the use of potable water to irrigate street medians, and prohibit the use of potable water for outdoor irrigation at newly constructed homes and buildings, unless drip or microspray irrigation systems are used.

Provision 2 is the well-publicized conservation mandate, which has a goal of reducing statewide potable urban water use by 25% compared to 2013 water use levels.  It also specifies that the Water Board should take per capita water use into consideration when developing regulations to meet to mandated conservation goals.

The Water Board is proposing regulations that would establish conservation standards for the state’s 411 urban water suppliers (M&I water suppliers that deliver more than 3,000 AF per year or have more than 3,000 service connections), based upon their September 2014 residential per capita water use. According to the Water Board, breaking down the suppliers into four groups with conservation standards of 10%, 20%, 25% and 35% (see table) “is intended to equitably and effectively achieve a 25% aggregate statewide reduction in potable urban water use.”


Residential Per Capital Water Use
(gallons per day)
# of Suppliers within Range Conservation Standard
Under 55 18 10%
55-110 126 20%
110-165 132 25%
Over 165 132 35%


The state’s actions open a number of questions:  How will the regulations be enforced?  How do water supplies play into this?  What about agricultural water users?  What will be the impact on individuals?

Enforcement.  Uncertainty remains around the question of enforcement.  The Water Board has not yet taken action on Provision 8 of the Executive Order, which would ultimately affect the pocketbooks of individuals who fail to meet conservation standards. But the board has outlined enforcement mechanisms that it can impose on water suppliers, but has not provided definitive guidance to explain how they will be applied.

Non-compliance on the part of water suppliers would fall into three categories: failing to file the required reports, failing to impose the required prohibitions and restrictions or failing to meet their conservation standard.

Informal enforcement, such as warning letters, generally do not include monetary penalties and are intended to remind water suppliers of the regulations and notify them that they are not achieving their water savings standard.

The Water Board could use the emergency rulemaking procedure to develop additional tools, such as informational orders and conservation orders.  Informational orders would allow the board to require specific data and information from non-compliant water suppliers.  Conservation orders would specify the actions needed for the water supplier to come into compliance and can be reconsidered by the board.  Conservation orders do not carry a monetary penalty.

Formal enforcement includes Cease and Desist Orders (“CDO”).  To issue a CDO, the Water Board must hold an evidentiary hearing, if requested.  Like conservation orders, CDOs must specify what actions must be taken to be in compliance and provides a timeline for the water supplier to return to compliance.  But if the water supplier fails to comply within the specified timeline, the Water Board can file a court action to assess Administrative Civil Liabilities of up to $10,000 per day for each day of non-compliance.

Water Supplies. Among the most troubling aspects of the top-down approach to trying to extend the state’s water supply in the unrelenting drought is that it is being done independent of the agencies’ water supply situations.  Agencies that have invested in conservation, storage or water supplies receive no benefit for their investment.

The San Diego County Water Authority (“SDCWA”) issued a press release expressing concern that the state’s approach is inequitable.  SDCWA argues that by using 2013 as the baseline year for measuring conservation, the proposed framework punishes those that previously made conservation efforts. SDCWA’s 2013 water use was already 20% lower than 2007.  As a second point, SDCWA also argues that by giving no credit for where investments have been made to improve water supply reliability, the state is punishing those that have invested in water supplies and rewarding those that have not.   SDCWA has been working for two decades to diversify its water supply and is highlighting its conservation-and-transfer agreement with the Imperial Irrigation District and the nearly-completed Carlsbad desalination project as achievements.  Finally, SDCWA expresses concern about the impact on commercial and industrial users arguing that targeting commercial and industrial use will hamper economic activity.

“The Water Authority strongly supports additional conservation and the governor’s goals are laudable – but they haven’t been translated yet into proposed regulations that are equitable, protect our economy or advance sensible long-term water policies,” said Mark Weston, chair of the SDCWA Board of Directors. “The Water Authority has met every objective in California’s Water Action Plan, which promotes regional self-reliance, and yet the proposed water-use mandates ignore the investments that this region has made to diversify our water supplies and protect our $206 billion economy. The current approach will stifle economic activity and undermine the long-term ability of water agencies to invest in new supplies if ratepayers don’t stand to benefit from investments they are asked to make.”

What about Agriculture? In a press statement announcing the Executive Order, Governor Jerry Brown noted that the agriculture sector has already “borne much of the brunt of the drought” and noted that agriculture has already faced reduced water allocations, fallowed hundreds of thousands of acres and laid off thousands of farmworkers.  He made similar comments in an interview with ABC’s “This Week.”

The governor has come under fire for failing to address agricultural water use.   Critics, including Los Angeles Times columnist George Skelton, inaccurately characterize agriculture as the state’s largest water user and charge that the governor left the largest potential savings untapped.

First, a factual correction:  agriculture is a large water user, but it is not the largest.  In 2007, DWR changed its water use accounting methodology to include environmental water use.  According to the 2013 California Water Plan Update, state and federal environmental mandates account for 48.5% of water use in California, agriculture accounts for 41.2% and municipal for 10.4%.

While the environmental mandates have little room for water supply reductions, simple mathematics suggest that a 25% reduction for agriculture could yield savings of more than 10%.  Applying that reduction to municipal use yields a savings of only 2.5%, but municipal use may be the only place left to find short-term water savings, since agriculture has already faced severe cutbacks.

In the Central Valley, ground zero for severe cutbacks of water to California agriculture, agricultural water users have a zero percent allocation from the Central Valley Project (“CVP”).  While a zero percent allocation does not necessarily equal zero water use, it has led to extensive fallowing.  Where water is being used, it must come from alternative surface water supplies—i.e. water purchased from Settlement Contractors or water right holders—or groundwater.  Alternative surface water supplies are limited in availability, with Settlement Contractors receiving their contractual minimum 75% allocation and water right holders anticipating curtailments.

Groundwater also has limiting factors.  In addition to the well-cited physical impediments—the difficulty and cost to access it once water tables have dropped and the problem of land subsidence—there are groundwater management regulations.

The Executive Order requires large agricultural districts (defined as those serving more than 25,000 acres) to include in their 2015 Agricultural Water Management Plans a drought management plan that specifies what actions have been taken to manage demand in the district and a quantification of the district’s water supplies and demands for the last three years.  Medium-sized agricultural districts (defined as those serving 10,000 to 25,000 acres) must now produce an Agriculture Water Management Plan with similar information.  Also, high and medium priority basins that have not yet met the California Statewide Groundwater Elevation Monitoring Program monitoring requirements are directed to immediately do so—and the Water Board is directed to adopt regulations or enforcement measures to promote compliance.

In addition, groundwater legislation passed last year has groundwater sustainability planning underway.  The three-bill package requires high and medium priority groundwater basins to develop groundwater sustainability plans by 2020, requires implementation of such plans by 2022, and provides for enforcement or state take-over if the plans are inadequate or there is failure to comply with the planning requirements.  (For more on the legislation, see “Gov. Brown Signs Controversial Bills To Manage California’s Groundwater,” JOW, September 17, 2014).

Similar to the Central Valley, a particular class of irrigators in the Klamath Basin is receiving zero deliveries so that the Bureau of Reclamation can meet environmental requirements under a 2013 Biological Opinion and make contractually obligated deliveries to senior contractors.

Impact on Individuals. The Executive Order is directed heavily at state agencies, with 14 provisions guiding bureaucratic operations, including directing how project permits should be prioritized and investigating whether short-term crop idling and transfer proposals are subject to Water Code section 1810 (which addresses the use of unused capacity in a water conveyance facility for the purpose of a transfer).  And there is some good news for the individual municipal user.

The Department of Water Resources (“DWR”) has been directed to lead a statewide lawn replacement initiative and to provide funding for underserved communities, and DWR and the California Energy Commission are directed to establish an appliance replacement program and to provide monetary incentives.

But the questions of most interest to the individual remain unanswered.  Topping that list are “how much am I going to have to cut my use?” and “what if I started conserving last year under the voluntary conservation orders?”  The closest piece of information is a document that specifies the conservation standard for each of the urban water suppliers by name.  The hope is that reducing or prohibiting potable water use as directed among CII, large landscape customers and on street medians and pushing to replace lawns with drought-tolerant landscapes would help ease the burden on individuals.  But that remains to be seen.

Also of prime interest to individuals is whether their water rates will go up.  Under the Executive Order, urban water suppliers will be directed to develop rate structures and pricing mechanisms, such as surcharges, fees and penalties, to maximize conservation.  There is not yet any guidance on form, amount or schedule for such charges.

Final Thoughts.  There are a couple of matters that have not been considered in discussions of the state’s actions.

First is a land use question.  The Executive Order and Proposed Framework regulate outdoor irrigation for new construction, a minor impact on new construction.  But no acknowledgement has been given to the possible overall impact on new construction.  Will-serve letters for new construction stipulate that service would be provided as long as there are sufficient water supplies.  Would there be sufficient supplies to add new use under a mandatory conservation scheme that is reducing use from a previous level?

Also overlooked is the hypothetical situation of everyone complying with the mandate.  The Water Board stated on the Proposed Framework that its system of grouping suppliers by residential gallons per capita day (R-GPCD) and applying conservation standards accordingly “is intended to equitably and effectively achieve a 25% aggregate statewide reduction in potable urban water use.”  But what if it doesn’t?

With headlines over the last year presenting cases where conservation has led to increased water rates, there is also the possibility that everyone complies to the financial detriment of the water suppliers and a loss of the public’s buy-in on conservation.


Written by Marta L. Weismann