California’s Water Conservation Regulations and the Law of Unintended Consequences Part 4—Fairness

A lot has happened since Governor Brown issued his executive order on April 1, 2015 directing the State Board to impose mandatory conservation regulations. On water supply matters, a projected El Niño phenomenon failed to materialize in a way that provided significant water supply impacts for Southern California. 2016 was the Golden State’s hottest summer. And according to the Department of Water Resources, the state suffered a “snow drought” during Water Year 2016. Snow is important as a natural reservoir that provides a reliable flow of water as it melts during the spring and summer.

On November 1st, the State Water Resources Control board announced that statewide urban conservation topped 18% in September 2016, compared to September 2013. The announcement came with good news. The percent of water conserved was an improvement after conservation fell to 17.5% in August, and cumulative savings from June 2015 (when the mandatory conservation regulations were implemented) through September 2016 total 23%—which is near the governor’s 25% target. In its announcement, the State Board noted, “Conservation levels have remained significant for many communities that had certified that they did not need state-imposed mandates to keep conserving.”

While the State Board warned of the possibility of a return to mandatory conservation if dry conditions prevail, the optimism of the November announcement stands in contrast to the October announcement—which reported the third consecutive month of declining conservation levels. There had been a steep drop in conservation levels among some suppliers, and the State Board was focusing on conservation levels, rather than hydrology, as the factor driving whether it would once again implement mandatory conservation regulations. Observers picked up on the State Board’s cue, and a number of blogs and commentaries noted that people won’t save as much unless they are forced to and seemingly called for a return to a mandatory set of rules.

While conservation levels were higher, mandatory regulations are a rife with problems.

On matters of policy, the mandatory conservation regulations gave rise to a number of unintended consequences. There were management impacts, including reduced runoff, strained infrastructure, and revenue shortfalls; economic impacts affecting the pocketbooks of residents and businesses and the viability and vibrancy of communities; and environmental impacts tied to the absence or reduction of watering when lawns are replaced or allowed to go brown. The heavy-handed conservation policy also gave rise to questions of fairness, which came on the individual level, revealing a class divide, and on the agency level.

Fairness Among Individuals—The Class Divide

In fall 2015, reporters from Reveal from the Center of Investigative Reporting published a story on the biggest water users in the state and called out the largest water user—dubbed the “Wet Prince of Bel Air”—for using 11.8 million gallons in a single year. While the Los Angeles Department of Water and Power maintained that this water use was legal, public disdain for the person using such a disproportionate amount of water ensued. The argument swung the other way when residents of the wealthy community of Rancho Santa Fe pushed back against water rationing by their local water district arguing that they should be able to use as much water as they are willing and able to pay for.

The heart of this fight centers on the equitable distribution on water resources. What exactly is “equitable?” Are rate structures effective to meet that standard? What about the UN’s declaration that water and sanitation are a human right?

Fairness Among Water Management Agencies

When the State Board established the mandatory regulations, it established a system where conservation targets were set according to residential per capita water use under the assumption that there is more opportunity to conserve in places where people are using more water. It was an admirable attempt to equitably distribute the pain. But it missed the mark.

The Sacramento Bee reports that, in addition to income level, household size, property size, and microclimates drive differences in the amount of water used. Hotter, drier communities with larger lots (read: inland communities) were on the hook for a greater level of savings than cooler, wetter communities with smaller lots (read: coastal communities). There was no consideration of why those areas use more water.

Of greater concern, though, was the failure of the State Board to recognize the efforts of agencies that have managed supplies to withstand droughts. There was no encouragement to develop new supplies or invest in drought-proof water supplies, no recognition of long-standing conservation programs, and no consideration of the limits already imposed in adjudicated basins.

Some agencies voiced their opinion or even took action over this disparity.

Mark Weston, Chair of the San Diego County Water Authority Board of Directors, issued a statement indicating that the Water Authority appreciated the State Board’s goal, but was “disappointed that the board’s regulations do not encourage the development of new water supplies. Despite requests by the Water Authority and others, the regulations don’t give credit to regions that have prudently planned for dry periods by investing in drought-proof water supplies such as the Carlsbad Desalination Project…”

The City of Riverside took more extreme action filing a lawsuit calling for the State Board to rescind the mandatory regulations. Riverside receives its water supply from a local adjudicated basin—and, under the rules of the adjudication, loses that supply if it is not extracted by the city.

Ultimately, the first round of conservation regulations provided disincentives for agencies to prepare for the next drought. Fortunately, the “stress test” trigger under the newer regulations offers a course correction.

Where Do We Go From Here?

When I started this series, I expected to recommend a set of regulations similar to what is now in place—something that compels conservation but also encourages and recognizes planning efforts.  The mandatory conservation regulations had one overarching problem: the conservation targets were set based only on a measurement of water use, with no consideration of a water supplier’s water supply situation and little room for local decisions about how to the meet the conservation targets. The newer, stress-test approach rectifies the problem by imposing conservation regulations only if an agency can not ensure a three-year water supply under drought conditions.

While there is value in following the governor’s call to “make water conservation a way of life,” we need to go beyond the focus on how much we conserve or even how we conserve. From both a planning and individual perspective, we need to think about why we conserve: our water supply is limited and variable.

California hydrology is volatile. We have recurring droughts on the regional and statewide levels—and, as we saw this year, we can experience drought and flooding at the same time. We have experienced unprecedented climatic events, including record high temperatures and a snow drought. And the future is uncertain. In addition, tolerance for the cost and other impacts of infrastructure-based water supply solutions is waning.

Focusing on the why takes the sting out of the sacrifices we must make and could reveal pathways to innovative water supply solutions—including new conservation tools, development of previously untapped supplies, and market mechanisms to reallocate supplies among willing parties.

Read Part 1—Management Impacts
Read Part 2—Economic Impacts
Read Part 3—Environmental Impacts

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About Marta L. Weismann

Marta L. Weismann, Director of Research of Stratecon Inc.—an economics and strategic planning consulting firm—provides research support for all aspects of Stratecon’s services and is the Managing Editor for the Journal of Water, a quarterly publication providing in-depth analysis of water market activity and selected water policy developments in the Colorado River Basin, Texas and elsewhere in the Southwest. She also participates on teams dedicated to developing new ways to address water supply issues in the American Southwest. For more, go to www.stratwater.com.