The Bay Delta Conveyance Facility: Affordability and Financing Considerations

California Debt and Investment Advisory Commission (CDIAC) | November 1st, 2014

The Bay Delta Conservation Plan (BDCP) is a collaborative effort involving numerous state and federal agencies with the goal of restoring and protecting the environmental

The Bay Delta Conservation Plan (BDCP) is a collaborative effort involving numerous state and federal agencies with the goal of restoring and protecting the environmental health of the Sacramento-San Joaquin Delta while also improving the reliability of an important source of California’s water supply. Currently, the Delta provides vital water supplies to municipal, industrial and agricultural water users in the Central Valley and coastal and Southern California. These water deliveries are crucial to the state’s economy and represent a critical source of water for more than 25 million California residents. According to the BDCP documents, in the absence of the various conservation measures proposed in the plan, Delta water supplies are expected to become increasingly unreliable, water quality in the Delta would be vulnerable due to sea level rise and associated saltwater intrusion, and the state would be exposed to potentially severe public health consequences resulting from a major seismic event that could damage Delta facilities and temporarily halt water exports. This report provides a preliminary assessment of the affordability and financing considerations of the Delta conveyance facility. The report does not address the merits of the BDCP per se or the question of whether the state and other parties involved in the project should proceed with this project.

The case for state-level drinking water affordability programs: Conceptual and empirical evidence from California

Utilities Policy (Elsevier) | April 1st, 2020

Informed by the design of a program in California, we make a three-part argument for why state-level governments might consider implementing direct bill-assistance progra

Informed by the design of a program in California, we make a three-part argument for why state-level governments might consider implementing direct bill-assistance programs for drinking water service to address growing affordability concerns for low-income households. State-level operation of bill-assistance programs represents a departure from the global trend of allowing water utilities to operate bill-assistance programs at their own discretion. We first explain the motivation for enhanced public sector support to help households pay for drinking water service. In state-level contexts such as California, we find that the basic household affordability equation has worsened due to an increase in the numerator of residential retail bills and a stagnation in the denominator of household incomes. We next demonstrate why direct bill assistance to households is necessary even with the presence of other system-level financial support or retail rate structure policies. Finally, we make the case that direct bill-assistance programs are best situated at the state level, due to substantial variation in systems’ capacity and demonstrated willingness to run their own robust affordability programs for vulnerable customers.

The challenge of closing the climate adaptation gap for water supply utilities

Nature Portfolio (Springer Nature) | June 29th, 2024

The challenge of hot drought

Nature Portfolio (Springer Nature) | November 21st, 2013

Drought is heating up around the warming world. Particularly hot drought has cost more than US$40 billion and claimed 218 human lives since 2010 in the United States alon

Drought is heating up around the warming world. Particularly hot drought has cost more than US$40 billion and claimed 218 human lives since 2010 in the United States alone. These hot and dry conditions have also contributed to unusually widespread and devastating wildfires, fuelled by wide expanses of weakened and dead trees that were unable to deal with heat stress and subsequent insect attack. Yet, to get a real sense of how this recent change in drought severity might shape the future, one has to look to the past. An analysis of regional and pan-continental North American drought over the past 1,000 years, reported by Cook et al in the Journal of Climate, makes it clear that recent droughts, as costly as they have been, are only a taste of what might lie ahead, independently of any big climate change.

The cost of alternative urban water supply and efficiency options in California

Environmental Research Communications (IOP) | May 28th, 2019

Urban communities, farms, businesses, and natural ecosystems depend upon adequate, reliable, and affordable supplies of clean water. As populations and economies

Urban communities, farms, businesses, and natural ecosystems depend upon adequate, reliable, and affordable supplies of clean water. As populations and economies grow and as climatic changes alter both water supply and demand, traditional options for meeting freshwater needs are becoming less available, reliable, and effective. As we approach peak water constraints on traditional water supplies, more efforts needed to reduce water demands through a wide range of conservation and efficiency technologies and policies, and to develop alternative, non-traditional water sources. A key factor in the adoption of these strategies is their economic feasibility; yet, only limited and often confusing data are available on their relative costs. To fill this gap, this analysis evaluates the costs of four groups of alternatives for urban supply and demand based on data and analysis in the California context: stormwater capture; water recycling and reuse; brackish and seawater desalination; and a range of water conservation and efficiency measures. We also describe some important co-benefits or avoided costs, such as reducing water withdrawals from surface water bodies or polluted runoff in coastal waterways. While difficult to quantify, such benefits are economically relevant, and we highlight areas where further research and analysis are needed to improve estimates presented here. All of the water- use efficiency options are far less costly than traditional or alternative supply systems with the exception of some of the most expensive landscape water reduction options. The water treatment and reuse systems and the urban stormwater capture projects are more costly per unit of water produced but still less expensive than seawater desalination—the most expensive option evaluated.

The Cost of Regulating Active Landfills for Water Quality

California State Water Resources Control Board (SWRCB) | January 3rd, 2016

This report to the legislature was prepared pursuant to Chapter 718, Statutes of 2010 (SB 855, Committee on Budget and Fiscal Review), which requires the State Water Reso

This report to the legislature was prepared pursuant to Chapter 718, Statutes of 2010 (SB 855, Committee on Budget and Fiscal Review), which requires the State Water Resources Control Board (State Water Board) to submit to the budget committees in each house of the legislature a report on the costs of regulating water quality at active landfills. The State Water Board and Regional Water Quality Control Boards (Regional Boards, collectively, the Water Boards) analyzed the cost of resources required to implement State and Federal statutes, regulations, and policies at these facilities. This report provides an overview of the Water Boards’ Land Disposal Program, followed by a cost analysis. The Water Boards’ Land Disposal Program provides regulatory oversight to 439 active landfills and 235 other waste management facilities in the State. Active landfills are all landfills that still pose a threat to the environment, even if they have stopped accepting waste. Active landfills are classified as operating or non-operating, with non-operating landfills including proposed, closing, and closed landfills. There are an estimated 1600 legacy landfills that were not included in the cost analysis for this report. Legacy landfills are waste management units that were closed, abandoned, or inactive prior to the adoption of revised State Water Board regulations in November 1984. In response to the legislative requirements, the results of this analysis show the cost of regulating the 439 active landfills to be approximately $18.1 million. The Land Disposal Program also regulates other waste management facilities as an integral part of the program, and tracks these facilities along with active landfills. Based on this analysis, the cost of regulating the 235 other waste management facilities is approximately $7.6 million. In total, implementation of the Land Disposal Program would cost approximately $25.7 million (not including legacy landfills). In Fiscal Year 2011-2012, the total expenditures incurred by the Land Disposal Program were approximately $10.6 million. As this presents an approximately $15.2 million shortfall in funding, the program prioritizes work based on threat to water quality, complexity, and level of activity at the facility. Working within existing resource constraints, the Land Disposal Program is currently implementing a series of efficiency measures to improve program effectiveness. A discussion of these efforts concludes this report.

The Economic Impact of the Westlands Water District on the Local and Regional Economy

Westlands Water District | October 11th, 2016

To anyone who visits the Westlands Water District (the District), the one reality that is most obvious to the observer is that agriculture IS the economy in the communiti

To anyone who visits the Westlands Water District (the District), the one reality that is most obvious to the observer is that agriculture IS the economy in the communities within and immediately surrounding the Westlands Water District. It is an area characterized by wide open fields-often populated with crops and occasional small pockets of residential and (rarer) retail-usually at the intersections of roads. Not only is agriculture the primary employer, but government, agricultural support industries and the limited general retail sector comprise the full course of jobs within the district and its immediate environs. Nearly every business in the district is related to agriculture or supporting the needs of the workers who support those working in agriculture. Westlands Water District is perched on the eastern side of Interstate 5 in the Central Valley covering the geography between roughly Kettleman City in the south and Firebaugh in the north. As the largest agricultural water district in the nation, it plays a central role in the economies of both Fresno and Kings Counties. This analysis unravels the story of Westlands' contributions to the local economy, exploring the demographics and economy of the region, agriculture's major role in that economy, estimating the economic contributions of growers within the District's boundaries, and providing a preliminary assessment of the consequences of current water policies on crop production, and giving a preview of what some of the implications of those changes may be.

The Economic Impact on the Local Economy of Irrigated Agriculture in the Paso Robles Area and Potential Impacts of the Sustainable Groundwater Management Act

California Polytechnic State University, San Luis Obispo (CSU) | August 26th, 2020

The purpose of this study is to analyze the economic impact of the agricultural and wine industry within the Paso Robles Subbasin and AVA and San Luis Obispo County and t

The purpose of this study is to analyze the economic impact of the agricultural and wine industry within the Paso Robles Subbasin and AVA and San Luis Obispo County and to assess the economic impact of potential changes in the agricultural industry as a result of the Paso Robles Subbasin Groundwater Sustainability Plan that will reduce water allocations and/or increase the cost of water in the basin from 2020 – 2040 and beyond.

The Economic Impacts of Central Valley Salinity

California State Water Resources Control Board (SWRCB) | March 20th, 2009

The study team was charged with measuring the economic impacts of increasing salinity in the Central Valley to the year 2030. The study was conducted assuming that there

The study team was charged with measuring the economic impacts of increasing salinity in the Central Valley to the year 2030. The study was conducted assuming that there is no change in current policy and, as such, represents the economic impacts associated with taking no action. Additionally, the study was conducted on an aggregate valley-wide basis that required averaging the effects of salinity and, in some cases, costs. The growth in salinity in the Central Valley was based on two factors. The first factor was the growth of the areas of shallow saline groundwater based on 30 years of historical records. The second factor was increased levels of salts that result indirectly from imported water. Based on increasing salinity stemming from these factors, the direct economic effects on industry, residential, food processing, confined animal operations, and irrigated agricultural production in the Central Valley were measured. Economic and physical effects were quantified using different physical and economic models. In addition, the team undertook a substantial survey of the population in the Central Valley to establish non-market values for increased salinity and its effect on non-market activities. The study results showed that if salinity increases at the current rate until 2030, the direct annual costs will range from $1 billion to $1.5 billion. Total annual income impacts to California will range between $1.7 billion to $3 billion by 2030. The income impacts to the Central Valley will range between $1.2 billion and $2.2 billion.  The production of goods and services in California could be reduced from $5 billion to $8.7 billion a year. The Central Valley output reduction would range between $2.8 billion to $5.3 billion. Furthermore, there is $145 million per year of non-market costs. In terms of job losses the increase in salinity by 2030 could cost the Central Valley economy 27,000 to 53,000 jobs. California could lose 34,000 to 64,000 jobs. In short, the problem is substantial and growing steadily. The magnitude of the economic and employment losses justifies a more detailed study of remedial action and correction policies.

The Economic Value of Efficiency for California Water Service: Lower Water Bills

Alliance for Water Efficiency (AWE) | June 28th, 2024

Prior to 2009, California Water Service Company (Cal Water) did not meter all its water customers, did not have conservation rates, and did not offer a robust set of cons

Prior to 2009, California Water Service Company (Cal Water) did not meter all its water customers, did not have conservation rates, and did not offer a robust set of conservation programs. Per capita water use had been flat or increasing prior to this period. In 2009, Cal Water adopted conservation rate designs (increasing block rates, IBRs), increased conservation program expenditures by more than three-fold and implemented an accelerated schedule to convert unmetered customers to metered water service. Per capita water demand has decreased steadily since 2009. These innovative strategies related to water efficiency, conservation, and rates over the years pose the questions: What would the economic impact on bills have been if none of these activities occurred? Are bill-paying customers better or worse off?