Last June, the Court of Appeal of the First Appellate District issued an opinion addressing the long-standing dispute between the Metropolitan Water District of Southern California and the San Diego County Water Authority regarding lawful wheeling rates for water conveyed to San Diego through Metropolitan’s Colorado River Aqueduct and local distribution system. Reversing a superior court decision, the Appellate Court held that Metropolitan’s inclusion of State Water Project costs in its calculation of wheeling rates was lawful. Putting aside legal debate, Hydrowonk focuses on the economic consequences of the decision.
With the implementation of the Quantification Settlement Agreement in 2003, the amount of Colorado River water available to the Metropolitan Water District of Southern California has been less than the capacity of the Colorado River Aqueduct (“CRA”). For example, the Bureau of Reclamation currently forecasts that Metropolitan’s use of Colorado River water will be 861,616 AF in 2015 http://www.usbr.gov/lc/region/g4000/hourly/forecast15.pdf. This is 438,834 AF less than the historical maximum annual amount of 1.3 million AF of Colorado River water conveyed through the CRA. Continue reading
Water Transfers in the West released last December by the Western Governors Association and the Western States Water Council presents a comprehensive framework to achieve the policy goals of western governors, who passed the following policy statement in 2011:
“The Western Governors believe states should identify and promote innovative ways to allow water transfers from agricultural to other users (including urban, energy and environmental) while avoiding or mitigating damages to agricultural economies and communities.” Continue reading
November 2012 was desalination month in California. The San Diego County Water Authority approved a 30-year agreement with Poseidon Resources to buy up to 56,000 acre feet (AF) per year of desalinated seawater produced from the Carlsbad Desalination Plant. With the annual price tag of water set at $2,041/AF to $2,295/AF (later reduced to $1,917/AF to $2,165/AF when San Diego secured project financing at unexpectedly favorable terms), there is buzz about what the deal says about the value of water. As with any venture, the project also has critics about the cost of water, skeptics about risk allocation, and cynics about the role of a private party. Continue reading