On December 21, 2015, the State Water Resources Control Board issued a “Proposed Regulatory Framework” for adjusting the emergency urban water conservation regulation imposed last year mandating a 25% reduction in urban water use in response to California’s drought. Under the regulation, each urban water supplier received a conservation goal ranging between 4% and 36% based on residential per capita water use for the months July through September 2013 (see table). (For background on the regulation imposed last year, see “California Steps toward Statewide Centralized Water System,” JOW April 2015).
Mandated Water Conservation Goals by Range of Residential Per Capita Daily Use
|Tier||R-GPCD Range||# of Suppliers
At the time the 2015 regulation was adopted, urban water suppliers proposed refinements of the mandated reductions to reflect factors contributing to water use. Under the Proposed Regulatory Framework, the State Board proposes the adjustments discussed below. While the framework represents a move towards recognizing key factors generating diversity in urban water demands, the amended regulations fall short of the mark. The most significant impact is the disincentives inherent in the regulations for urban water suppliers to invest in improving water supply reliability.
Local climate is a significant factor impacting residual water use. Hotter and drier areas have higher per capita water use than cooler and wetter areas. The State Board’s initial regulation did not account for differences in local climate. The State Board’s staff recommendation is to incorporate a climate adjustment that can reduce the conservation requirement by up to 4%. The climate adjustment is based on an urban water supplier’s approximate evapotranspiration (“ET”) of its service area for July through September relative to statewide ET average:
|Deviation from Statewide ET||Reduction in Conservation Standard|
|10% to 20%||3%|
|5% to <10%||2%|
No urban water supplier would have their conservation requirement increased if their ET is below the statewide average. Staff estimates that this adjustment will reduce statewide water conservation requirements by 1.4 percentage points.
The proposed adjustment acknowledges that climate has an impact on urban water use, but may be of small solace to customers in the dry and hot portions of California. Their “high” per capita water use pushes them into higher tiers of mandated cutbacks. The 4% restriction on the climate adjustment means that, at best, their situation may move one tier down on mandated conservation. However, the wide variation in daily per capita water use throughout California suggests that climate variations are substantially greater.
Urban water suppliers have experienced growth in their customer base since the base period used in the calculation of mandatory conservation. The volume of water added allow consumption to reflect growth reflects three adjustments:
- Number of new connections added since 2013 multiplied by 165 gallons (reflecting 55 gallons per person per day for three people) multiplied by 270 days for which the 2016 regulations are in force.
- Area of new residential landscape area (square feet) added since 2013 multiplied by 55% of total ET in service area from February through October (converted from ET in inches to gallons).
- Number of new commercial, industrial and institutional connections since 2013 multiplied by average water use by commercial, industrial and institutional connections during February through October 2015.
Staff estimates this would result in about a one percentage point reduction in statewide water conservation requirements.
The proposed adjustment acknowledges that urban water suppliers serve more connections now than in 2013. The first two factors of the adjustment are effectively “water budgets” for new residential connections. Urban water suppliers in the higher tiers of the conservation goals may find that the growth adjustments do not accommodate the increased water demand from new connections to the extent that their historically higher daily per capita use of water reflects underlying factors not adequately captured by the State Board’s proposed adjustments. On the other hand, urban water suppliers in the lower tiers of the conservation goals may find that the proposed adjustments more than accommodate the increased water demand from new connections.
Drought Resilient Sources of Supply Credit
Many urban water suppliers have made substantial investments in drought resilient water supply sources, such as indirect potable reuse of coastal wastewater, seawater desalination and the San Diego County Water Authority’s acquisition of Colorado River supplies from the Imperial Irrigation District including canal lining.
The State Board staff proposes a one tier (4 percentage point) credit if the urban water supplier can document that at least 4% of its potable water supplies is from indirect potable reuse of coastal wastewater or seawater desalination developed since 2013. The staff recommends against providing San Diego with any adjustment for its acquisition of Colorado River water.
From a water investment perspective, the staff’s recommendation produces a significant disincentive for investment in reliable water supplies. For the seawater projects that do receive credit, there is only a partial credit—those sources must supply at least 4% of potable water supplies to receive a 4% credit. Investments yielding water in excess of the 4% threshold do not avoid the need for cutbacks in water use. For San Diego’s investments in Colorado River water, the situation is worse. Their investment does not avoid the need for cutbacks in water use. When a reliable water supply should pay off, the State Board staff says no.
Non-Potable Recycled Water Credit
Urban water suppliers invest in water recycling to stretch their available water supplies. Recycled water reduces the need to use potable water for outdoor uses.
The State Board staff does not recommend providing any credit for non-potable recycled water credit. Their argument is that the mandatory water conservation requirements are for potable water. Urban water suppliers who use non-potable recycled water “already benefit” because their potable water use is lower.
This is another example of punishing pro-active urban water suppliers. Use of non-potable recycled water means that the mix of indoor versus outdoor use of potable water becomes more skewed to indoor uses. In other words, the potential for conserving outdoor use is less, the greater the use of non-potable recycled water. The State Board staff recommends to ignore these distinctions.
Urban water suppliers are increasingly storing water in groundwater basins for use in future years. Adjudicated groundwater basins, for example, allow right owners to “carry over” the groundwater available under their rights from one year to the next. Conjunctive use programs are another example of a right owner forgoing use of available water supplies and storing for use in future years.
The State Board staff recommends against the use of any groundwater credits. It finds any such credits “not well-defined” and “generally inconsistent with goal of conserving the state’s remaining groundwater and surface water supplies during the drought.” Concerning the first point, the State Board staff has a good point in areas outside adjudications or effective groundwater management. However, there are many areas in California under adjudication and existing regulations that, in fact, yield storage activity “well defined.”
To the extent that the State Board frustrates the ability of urban water suppliers to use stored water during times of drought, the lack of groundwater credits is another example of the State Board’s regulation punishing pro-active urban water suppliers.
Regional Compliance Approach
A stakeholder proposal suggested that urban water suppliers jointly comply with their aggregated conservation standards as a single entity. If a group as a whole did not meet its conservation target, the suppliers would revert to their individual requirements.
The State Board staff recommended against this approach. The concern was that the approach would impede timely compliance and enforcement and has the potential of reducing individual supplier accountability.
A better variant of the stakeholder proposal would be to create a “cap and trade” market for water conservation. The State Board’s enforcement policy would remain in place. The relevant test for compliance would be comparing the urban water suppliers’ water consumption to the regulatory standard, as adjusted by trading of “water conservation credits” among urban water suppliers. A water conservation credit market would use the same tools environmental credit markets used worldwide. Individual supplier accountability will remain intact. The stakeholder group could have advanced a far better proposal.
Commercial Agricultural Exclusion
The State Board staff recommends modifying the current exclusion to require certification that excluded uses produce at least $1,000 in annual revenue from agricultural sales and are not subtracting water used in ornamental landscapes. The $1,000 threshold is consistent with the United States Department of Agriculture’s definition of a farm.
Exemption of Regions without Drought Conditions and no exports/imports
The drought has reduced available surface water supplies in Northern and Central California. In contrast, California continues to receive its 4.4 million AF of Colorado River water. Further, under the 2007 Shortage Guidelines, California will continue to receive 4.4 million AF of Colorado River water even when shortages are declared in the Lower Colorado River Basin. Further, there are many adjudicated or managed groundwater basins that either (1) have sustained no cutback in available water supplies, or (2) allowed pumping has been reduced reflecting drought conditions.
The State Board regulations do not take into account the status of actual water supplies when defining mandatory conservation requirements. This has resulted in many examples where urban water suppliers must cutback water use substantially, even if they have not suffered any reductions in available supplies. In this circumstance, urban water suppliers must cut back water use that simply yields excess/unused available water supplies.
The State Board staff does not recommend any adjustments to addressing the situation. The current regulations contain a reserved 4% tier for suppliers “that can demonstrate multiple years of supply and no use of imported water and groundwater.” The staff believes that the current 4% tier is adequate for an extended emergency regulation “given the uncertainty of the state’s surface and groundwater supplies during the drought.”
Urban water suppliers have three options for their unused available water supplies: (1) storage, (2) transfer, or (3) loss. As discussed above, the State Board regulations do not recognize adjustment for the use of stored water. Therefore, any storage of water would be for use in later years after the drought has passed. Transfers are problematic due to the lack of a well-organized water market in California and the restriction of eligible buyers to suppliers whose actual use falls below the level dictated by its mandatory conservation requirement. These suppliers are lower-valued water users than other suppliers whose water use exceeds the level dictated by their mandatory conservation requirements.
The third option is loss of water supply, a remarkable outcome during a drought. This is precisely the situation of the City of Riverside, who only uses local groundwater supplies unaffected by the drought. Their cutback in water use resulted in the city having unused groundwater from its rights in the Bunker Basin. Since the water could not be stored, the city effectively loses its right to the unused water. (For background on Riverside’s situation, see “City of Riverside Demands Repeal of Mandatory Conservation Regulation,” JOW June 2015).
Urban Water Suppliers with Significant Seasonal or Transient Populations
Some urban water suppliers serve areas with significant seasonal or transient populations. As a consequence, water demand patterns do not follow the patterns of urban water suppliers with full-time populations.
The State Board staff recommends no action to address the issue. The staff rejected a stakeholder proposal to base conservation requirements on year-round water use to avoid reducing regulation’s emphasis on reducing outdoor water use.
A Cap on Credits and Adjustments
After outlining a variety of potential adjustments, the State Board staff caps the allowed adjustments to a 4 percentage point reduction in an urban water supplier’s conservation tier. In other words, the circumstances of an urban water supplier may yield a variety of adjustments (climate, growth, drought resilient water sources) that collectively exceed 4 percentage points. The cap on credits exasperates the problems from the individual adjustments as well as the exclusion of credits for activities that promote investments in reliable water supplies.
California’s mandatory water conservation regulation is a classic “top-down” approach. Conservation targets are set irrespective of diversity in factors driving diversity in water use patterns in California. Conservation requirements are determined independent of “facts on the ground” regarding the availability and character of water supplies. The law of unintended consequences will run amok in California. Incentives to invest in drought resilient water supplies and store water for drought are deadened. California will be even less prepared for the next drought than it was for the current one.
Written by Rodney T. Smith, Ph.D.