State officials want a new conservation approach that imposes a “water budget” on millions of urban customers. Some local water agencies say it’s a regulatory excess that could cost them dearly.
AN EFFORT BY California officials to carry their success with water conservation beyond the drought is not sitting well with local water managers, many of whom are eager to shake off state control.
Gov. Jerry Brown declared the state’s five-year drought officially over in April, following an unusually wet winter that refilled reservoirs and buried the Sierra Nevada in deep snow. But Brown also made it clear, given the likelihood of future droughts, that he wasn’t going to ease up on water conservation.
That same month, responding to the governor’s executive order, state agencies released a new water conservation “framework,” a plan designed to “make water conservation a way of life.” The goal is to unify the state around better water management, both to prepare for the next drought and to encourage more public respect for vital water resources – even in times of plenty.
The core program is a new “budget-based” water conservation strategy that would be imposed on the state’s 409 large urban water agencies. It would give every water agency a customized water budget based on total indoor and outdoor water consumption within their service areas, along with a budget for allowed leakage from distribution pipes.
This budget approach would replace the 20 percent conservation mandate water agencies are required to meet by 2020, according to a 2009 law (the so-called 20×2020 rule). Most communities have already met that target, thanks in part to conservation measures imposed during the drought.
The new proposal was met with howls of protest from some local water agency leaders, who say budget-based water use targets are too costly and complicated to adopt. Some also object to continued state meddling in local water management.
“Maybe we are leaning toward too much state control and not enough of the local water management that we’ve relied on for 100 years or so,” said John Woodling, executive director of Sacramento’s Regional Water Authority, a coalition of about two dozen water suppliers in the state capital region.
The Association of California Water Agencies, a trade group representing the majority of urban suppliers, submitted a comment letter in December expressing concern about the budget-based approach. Co-signed by 116 individual water utilities, it urges the state to allow alternatives for setting conservation targets, saying this could be “more cost-effective.”
Pieces of the new framework require action by the state legislature. The legal changes were initially attached to a budget trailer bill, irking some water leaders who saw this as an effort to silence debate.
In response, Woodling’s agency and the Irvine Ranch Water District sponsored their own bill that essentially continues the status quo: Local agencies decide how to structure water conservation, unless ordered by the legislature to do otherwise.
For the moment, the issue hangs in legislative limbo.
Environmental groups support the budget-based approach to water use. Tracy Quinn, a water conservation policy expert at the Natural Resources Defense Council, said the new approach could make state-mandated rationing less likely in the next drought, a process many local water agencies bitterly resisted.
“If we have consistent plans and effective targets, I’m very hopeful we can reduce the need for mandatory conservation in the future,” she said. “You cannot tie the hands of the state to protect the citizens of California from future drought.”
Water agencies would establish categories of consumption based on when yards were landscaped. One category would apply to yards landscaped before 2010, when the state offered a “model” landscaping ordinance for landscaping that many communities adopted. Other categories reflect more frugal landscaping resulting from updates to the ordinance after 2010 and 2015.
Indoor water use is assumed to be fairly consistent across different parcels. A daily consumption rate of 55 gallons per person is under consideration as the indoor standard.
Quinn said the budget system has flexibility built in. Water agencies can decide whether to focus conservation effort on indoor or outdoor programs, or on fixing system leakage.
“What it does is, it moves us away from just conservation – asking folks to use less water – and makes sure we are using water efficiently,” Quinn said.
It also begins to educate customers about how much water different uses require. This was a problem with the percentage targets set under prior conservation rules. Quinn said that when told to cut their water use by 20 percent, customers didn’t really know what that meant, or where to start. Learning to live within a water budget all the time begins to provide that information.
The framework also requires local agencies to adopt consistent water shortage contingency plans, which require certain conservation steps when a “Stage 1” or “Stage 2” drought is declared. Most water agencies already have such plans, but they all have different conservation requirements.
Under the new rules, all water shortage contingency plans would be required to contain the same number of stages with the same conservation targets. How they achieve those savings, however, may vary. This would allow state officials to declare a “Stage 2” drought with predictable statewide water savings as a result.
A handful of water agencies across the state have already adopted a budget-based approach to water conservation. A few are even billing customers according to water budgets. While this isn’t required by the state proposal, it could lead more water agencies in that direction.
Moulton Niguel Water District is one agency that bills customers according to water budgets. The district, which serves about 170,000 people in Orange County, adopted budget-based water rates in 2011. It cost about $1 million to implement, said general manager Joone Lopez, and required hiring a consultant.
Because outdoor watering is the largest component of residential water consumption, the district relied on aerial imagery to set water budgets based on parcel-specific landscaping types. If customers disagreed with their landscaping assessment, they could request a site inspection of their property for a more accurate assessment. The district hired a number of temporary employees to do these inspections.
“It’s working extremely well, and we know that because our customers tell us it’s working well,” Lopez said.
Prior to the new approach, she said, customers sometimes became “irritated” when told to conserve water because they felt they were being told how to manage their own property. They didn’t like being told how much or how often to water their lawns, for example.
But with budget-based rates, Lopez said, customers are now working to save money, a very familiar concept for most people. In short, it makes buying water more like buying other consumer goods.
“With this budget approach, not only do they have clarity in what they need to do, but it also gives them the choice,” Lopez said. “If they want to use more water outside and less inside, they have the choice. If I stay within my budget, I pay less – I am rewarded for being efficient. And that is the bottom line.”
Woodling fears the state is focusing on water conservation to the exclusion of another priority in the governor’s framework: developing new water supplies. He’d prefer to see more emphasis on new water supplies – groundwater, surface water, water reuse, water trading – and less fixation on water efficiency.
He notes that, during the drought, the state’s conservation mandates initially didn’t consider local water supply conditions. Every water agency was required to meet a conservation target, even if it actually had enough to meet demand.
This was a particular problem in the Sacramento region, which has abundant water rights in the American and Sacramento rivers. The region’s water agencies were required to impose conservation targets, which required some customers to let landscaping die. Many were also hit with rate increases, a result of falling water agency revenue caused by reduced sales.
Woodling said some water agencies also found themselves with “stranded assets”: Recent investments in new water supplies became unnecessary due to the conservation requirements, yet they still had debts to pay on those investments.
“I think the focus on cutting water use as the highest priority really undermines that other part of the balance dealing with improving supply,” Woodling said.
Lopez said she has found that budget-based water rates offer another way to look at this conundrum.
When her customers began to use water according to a budget, she said, the district’s total water demand became more predictable. It also got easier to predict water demand caused by population growth, because the district now had fine-grained detail about water consumption on different types of parcels.
All this allows the district to be much better informed when investing in new water supplies.
“It helps us right-size supply projects so that we’re not over-sizing them, and we don’t have a stranded asset down the line,” Lopez said. “At the end of all of this, what we’re really trying to do is to better serve our community. If we can put the focus there, I think it will help to alleviate some of these concerns.”
Editor’s note: The story has been updated to correct an earlier version and reflect that the state proposal is not about budget-based water rates, but budget-based water use.
As originally published in Water Deeply by Matt Weisner, June 26, 2017