GrokSurf's San Diego

San Diego County faces a “new normal” where water is concerned. What’s the new normal? It’s widespread community awareness that we inhabit an arid region, rely on mostly imported water to survive, are vulnerable to supply disruptions from a variety of causes, human and natural, and must use water wisely and sparingly, drought or no drought. It’s aggressive cost-cutting in water agency budgets while continuing to diversify water sources. It’s improving supply reliability. And, the new normal is more rate increases for the foreseeable future.

San Diego County Water Authority headquarters: water-wise landscaping shares the sun with photovoltaic arrays under construction in the parking lot.

Those were some of the points made during Water Talk: Investing in Reliability, a community forum on key water issues facing San Diego County hosted by the San Diego County Water Authority (CWA) at its headquarters on Tuesday evening.

Michael Hogan, Board Chair; Dennis Cushman, Assistant General Manager; and Eric Sandler, Director of Finance spoke to a group of about 50 people.

Mr. Hogan gave an overview of CIP activities and reliability/diversification projects completed or underway comprising part of a long-term strategy arising from the 1987-1992 drought that caused the state to begin strictly rationing water. Projects include additional local storage capacity from the new Olivenhain Dam and the San Vicente Dam Raise under construction, 3 seawater desalination projects, expanded use of recycled water including potable reuse, a water transfer agreement with Imperial Irrigation District, and extensive public outreach to promote a water conservation mindset.

Mr. Sandler said adjusting to “the new normal” means controlling costs to minimize water rate increases, such as: cutting $6 million from the operations budget, reducing the workforce by 12%, making no spot water purchases, selling stored water (reduces evaporation loss, water was purchased earlier at a lower price), and using the rate stabilization reserves. He pointed also to CWA’s excellence in financial reporting and budgeting which earns high bond ratings and keeps borrowing costs low. Nevertheless, infrastructure and operations costs will continue to rise.

Another major contributing factor in higher water rates is the Metropolitan Water District of Southern California (MWD).

While the percentage varies among the 24 CWA member agencies, drought or no drought water comes in a 50-30-20 plan for the county: 50% imported from the Colorado River, 30% imported from Northern California, and 20% drawn from local resources. All of those imports come to San Diego via MWD.

CWA also has contracts to purchase Colorado River water from the Imperial Irrigation District (IID) but there’s no direct pipeline from Imperial Valley to San Diego. Instead the water authority pays MWD to transport IID’s water through the Colorado River Aqueduct and to CWA’s pipelines. The water authority believes it is being unfairly and illegally overcharged by MWD for those water transportation costs (some observers say MWD imposed the high rate in retaliation because San Diego’s deal to buy Imperial Valley water meant it would buy less water from MWD). Consequently, CWA filed a lawsuit in Superior Court charging that MWD’s water transportation rate structure is illegal.

Commenting on the current status of the lawsuit against MWD (it’s being heard in San Francisco Superior Court), Mr. Cushman said that a decision could come in 2012; however, both sides are so firmly entrenched in their positions that regardless of the outcome, there will be an appeal. Therefore, it could easily be another 3-5 years before the matter is settled for good. In the meanwhile, it’s certain that MWD will continue to impose rate increases because demand is down but fixed costs will still need to be paid. CWA, in turn, will have to pass along any MWD increase plus its own increases in fixed costs.

More background on the CWA vs. MWD lawsuit:

• MWD’s position
• CWA’s position

Another perspective on MWD is outlined in What We Need in a Bay-Delta Fix, a water authority presentation recently given to California legislators.

Here are CWA summary sheets for issues covered in the forum:

• 2011 Water Issues
• 2011 Water Supply Update
• Budget at a Glance
• Sacramento-San Joaquin Bay-Delta
• San Vicente Dam Raise
• Seawater Desalination: Binational Plant Studies
• Seawater Desalination: Camp Pendleton Seawater Desalination Project
• Water Reliability and the Economy

Coincidentally, on the same day as the water forum, the San Diego County Grand Jury announced that water rate increases are inevitable, in its report San Diego County Water Rates: High Today, Higher Tomorrow.

The Grand Jury news release is below. Although it states that the full report is on the county website, as of this writing it’s not there yet. However, the Union-Tribune has a copy of the report.

[Update June 2: the Grand Jury website now has the final report]