Rethinking California Part III: Back to the Drawing Boards on Water Supply Availability?

What happens when the impossible happens?  Does prudence dictate that one revisit expectations?  The existing drought in California has understandably distracted the water industry.  With multi-billion infrastructure investments on the horizon and the foundation of the California economy hanging in the balance, responsible decision-making must reconsider analyses of California’s water supply availability.

Over the past month, a debate has emerged about the cause of California’s dire water supply situation.  Water agencies point to increased stringency of environmental regulation of the Golden State’s water projects as the cause.  Environmentalists counter that severe hydrologic conditions are responsible.

Do both sides have valid points?  Does California find itself in a “new hydrologic normal”?  Here are some facts.

 The “Impossibility” of the Existing Situation

The Department of Water Resources (“DWR”) produces water supply availability studies for the State Water Project (“SWP”).  These studies are valuable because they inform the public of the inherent risk in the availability of SWP water supplies.  In fact, DWR’s water availability analysis is the analytic linchpin underlying DWR’s assessment of the Bay Delta Conservation Plan (“BDCP”).

What does DWR say about SWP water supply availability?  Take DWR’s pessimistic water supply scenario used in its analysis of the BDCP—existing project conditions with high Delta Outflows.  The minimum SWP allocation is 7%.  In other words, DWR’s analysis concluded that the probability of a SWP allocation of less than 7% is zero. 

As we all know, the SWP allocation this year started at 0% and was only recently increased to 5% after significant rainfall.  Concerning the 5% allocation, the water is only available in the fall—after the peak water use months.  Is anyone truly relying on this meager allocation?  The water will be welcome, of course—to replenish storage.

As economist sometimes says about their forecasts, “Oops!  What happened?

Can the 5% SWP Allocation Be Explained by Hydrologic Conditions?

Not likely.  Consider Hydrowonk’s model of SWP allocations.  Two key factors have historically driven SWP allocations—the amount of water in storage in Oroville at the beginning of the water year and precipitation.  Based on actual precipitation through April, the expected SWP allocation for 2014 is 23%.  The probability of a 5% allocation is small, less than 10%.  In other words, there are factors at work in 2014 that have not been in play historically that result in an unexpectedly low SWP allocation in 2014.  The “out of sample” experience for 2014 is consistent with the water agency views about environmental regulations.

Are Droughts Increasingly Severe?

 Based on tree ring studies, the answer is no.  Earlier this year, DWR released a draft Final Report Klamath/San Joaquin/Sacramento Hydroclimatic Reconstructions from Tree Rings,   Hydrowonk reviewed the reconstructed historical record for the Sacramento River Four Rivers Unimpaired Runoff for the period 900 through 2013, a total of 1,113 years—What Does DWR Tree Ring Study Tell Us About Sacramento River Hydrology?  From the perspective of California’s future, there is good news:

  • long-term hydrologic conditions are stable
  • the historical record DWR uses in hydrologic analysis (1906-forward) is consistent with long-term hydrologic conditions
  • DWR’s median forecast in May 2014 for the Sacramento River Unimpaired Runoff for 2014 is 7.2 million acre-feet, which is above the runoff in three years of DWR’s historic record since 1906—1924 (5.74 million acre-feet), 1931 (6.1 million acre-feet) and 1977 (5.12 million acre-feet)

The year 2014 will be the third year in a row where unimpaired runoff is below normal.  A four-year run of below normal hydrologic conditions is not exceptional.

Water Supply Availability Matters

Water infrastructure investments, such as the Bay Delta Conservation Plan, are always a bet on water supply availability.  What if the water supply availability model used is misleading?  With the impossible (at least in terms of DWR’s model) happening this year with hydrologic conditions that, while severe, are not exceptional, the problem lies with how the model analyzes environmental regulations.  With existing conditions not properly analyzed, how can one have confidence that the future regulatory world under the BDCP is properly analyzed?  Are the water-supply benefits of the BDCP overstated or understated?  Who knows?

It would be prudent to revisit the BDCP’s assessment before making multi-billion investment decisions that are designed to improve the water foundation of California’s economy.  The BDCP is a multi-billion venture backed by a computer model.  Shouldn’t California have the right one?

This entry was posted in Bay Delta Conservation Plan, Risk Assessment, SWP Allocation, Water Security, Water Shortages on by .

About Rodney T. Smith

Rodney T. Smith, Ph.D., President of Stratecon Inc.—an economics and strategic planning consulting firm—advises public and private sector water users on the acquisition, sale and leasing of water rights and water supplies in the western U.S. He is routinely involved in economic valuation of water rights, water investments, and negotiation of water acquisition and transportation agreements and has served as an expert witness in the economic valuation of groundwater resources, disputes over the economic interpretation of water contracts, economics of water conservation and water use practices, and the socio-economic impacts of land fallowing. For more information, see