Catalyst: California August 11, 2015
Bob: So, [unintelligible] California kind of situation Southern California, you know, there was a comment in the opening in water usage in Southern California. About half of Southern California’s water is actually local water. There’s a tremendous amount of rain water harvesting, that’s already going on an Urban Southern California, this is basically the 3 major water sheds of Los Angeles and San Gabriel [unintelligible] water sheds but all the way[unintelligible] when you [unintelligible] down to the Mexican border about half is local water. About a quarter is state water, project water being pumped from the delta down the valley over the mountains although of course in the last couple of years that has been reduced dramatically and then about a quarter is Colorado River water coming in through the metropolitan’s Colorado River aqueduct. So, I’m getting a disconnected sign here, and this is quite distracting (timestamp for engineering escalation [01:06:15.23]) but I’m just going to keep going. So, what does that mean, it turns out that every water agency at least that I’m aware of is working diligently now with billions of dollars in investments going into local water supply development that would be efficiency improvement firsts [unintelligible] and rain water harvesting and water recycling everything from inter___ reuse to the standard purple pipe kind of systems. And in a couple of cases including environment community going the [unintelligible] desal in our case for the second time, the first time [unintelligible-interrupted escalating for mic status tags [01:06:54.07] We got other people talking on the line? I don’t know who’s doing the technical but it’s there. If they could sort that out that would be nice. So this investments from the water agencies (mumbles [01:07:07.00] – [01:10:00.05])systems are moving very dramatically in the direction of local water supply development and trying to reduce reliance and the draw on the big irrigation systems and in this case the state water project and the Colorado river aqueduct. So that’s interesting the implications for drought resilience and building a more robust system and also from the standpoint of energy use and greenhouse gas emissions. In most cases even with the additional treatments for water recycling the amount of energy used relative to the amount used to import water over the ocean by our nation is quite a bit less. so we’re getting multiple benefits here from some of the new strategies. But the other interesting thing is that most of this is being financed by local money. The work capital for the last decade where the investment is in water infrastructure. Almost all of it is coming out of local agencies [interrupted [01:08:21.10] Ok, we’re getting people talking on the line here and the state contribution is the maxed in the least from the federal government so if you think of the big powerful federal government and the big money, actually those days are long gone. Investment really is at the political level. And that makes the big difference I was talking about. Institutions, as part of the topic for today and decision making but it really is as I see it going to be a rate based future. That is, water rates, local fees, taxes are going to be the primary mechanism for financing the technologies and the approaches we take to manage a resilient and reliable water system, and what that means is that people need to be convinced that those investments are getting the results they’re looking for in the appropriate..but they’re the people [unintelligible] at this point in California anyway, Northern California as well as Southern California, Bay area is actually much more similar to Southern California than many realized. What’s going on in Silicon Valley right now with water recycling and the ground water management look at the Silicon Water Agency which is not connected to the state infrastructure the state water project [unintelligible] system and on down to Marin County. Same story with the aggressive efficiency and recycling and so forth. Lots of lessons to be learned in terms of rethinking how we use water, how much is there, understanding the limits [unintelligible] that cuts into the pricing as well. The institutions managing these resources clearly are faced with the conundrum people expect high quality water with high reliability and they expect it delivered yesterday, no problems and it’s no longer a world where that is possible the rate structures are going to need to reflect the cost, the true cost including the environmental cost of managing water systems. So this is how of the big one’s I wanted to throw out there.
Steven: Hey, Bob we’re getting some questions now on the screen here and you were talking about water rates and one of the things that’s interesting about water rates in California right now is, you know, several agencies have tried what to known is to tiered pricing where, you know, individual water users get a certain water budget and have to go over that budget, they’re charged a higher rate for the excess water that they use that in a, in a one city, Capistrano, they’re was say a legal challenge to that and in fact that tiered pricing scheme lost in court primarily because there’s a state law that basically requires, you know, a pricing to basically reflect the cost of providing service. I’m just wondering as we move forward as California moves forward, how are we going to get past that, that obstacle of, you know, it’s a proposition of 47 for folks who don’t know it was a voter initiative that basically required utilities public utilities could not charge more for service than cost of providing that service. But how can you get around that obstacle that prop 47 has placed in the path of tiered pricing?
Bob: I think you’re talking about prop 18 actually.
Steven: My mistake.
Bob: Yeah, and now actually constitutional amendment in California, so they were dealing with not just a law but a constitutional provision. What it calls for is a reflection of actual cost you know what’s being charged, so it does not say that in the Capistrano district it does not say that tiered rate structures are illegal or inappropriate. It says that the entity developing the charges needs to tie them to actual cost. So in some ways, in an interesting twist this is perhaps useful and agencies essentially sharpening their pencils and reading the book reflect the increased marginal cost of the increased extra cost it takes, you know, if people would like to use water with abandon they’ve got to go out and get it. Building that lease outline and operating, buying some more water on a water market or building more expensive infrastructure is going to cost more than its [unintelligible]. I got a problem though, from the social equity stand point your strong sense that having a so called lifeline rate a low cost amount of water that certain amount to make sure that everyone has access to a basic amount of water that one would need. That cannot be subsidized according to the interpretation [unintelligible] so there are a lot of discussions about that make sure to take care of that dimension. In fact, that’s a relatively small amount of water in the large scheme so we’ve got many tiers above that. But there is a strong move to change the proposition to which a constitutional change I think or some efforts as well some legal changes without changing the constitution and it strikes me that that is in order because the pricing tool, in order to send a clear price signal that helps you understand the value of water is that important.
Steven: Well exactly, then that kind of goes to another question that’s been posted on that’s screen in the breakout room, and that going to goes this issue of water being over appropriated in California, in other words, even during the wet years some would argue that, you know, that California has over subscribed it’s available water and I’m wondering how do we change that and be, I mean where do price signals, maybe fall into efforts to change that?
Bob: Well, I would argue that every nature system have been overallocated for a long time. You know, we saw some of the early cases, the ___ case in Monterey was a good example and the courts and the state board openly decided that yes, the water rights that Los Angeles holds are not.. they still retain the water rights but there are limits to the exercise of those water rights in the public press document. We’ve got overdraft of ground water systems and asking the question of the rates of pumping we don’t’ know exactly how much cause we don’t measure and report that information cuz I believe we should, work clearly over drafting ground water at a very unsustainable level we have over appropriated most of the surface systems so the Colorado River does not reach see it hasn’t for a long time, even now [unintelligible] And, you know, San Joaquin River and Klamath was the second largest river in California, whether it’s sand for about 50 miles. We’ve got a lot of systems that have been over exploited to the point where became really a restoration of flows and systems if you could affect something like sustainable machine for ground water and surface water extractions.. I actually think that it’s quite possible to restore the ground water systems but it’s going to take sometime and it matters sustainability. They key is that to have good information on the resource, and then have the policy tools in place to be able to manage within the limits of the resource so that [unintelligible].
Steven: But Bob, do you feel that the timing of the state’s efforts to get a handle on the ground water situation that the law that was passed last summer was sort of putting on place the framework to get more information about, you know, how much ground water is in the ground? How much is being pumped, you know, pushes for the final implementation of the plan I think up until 2025, maybe later. And, you know, in the meantime, you know, it seems like the status quo will be allowed to continue the ground water pumping will be allowed to continue, is there disconnect there and the need to get this information that you’ve been talking about and the long timeline is that this law has laid out?
Bob: Well, in my view, yes. I think this way too long a time frame. We’ll meet move much more quickly. We are going to pay the price for waiting to resolve things. We have very expensive impacts already in terms of infrastructure that is being impacted. Roads and Canals and rats for plans subsidence So we really need to up the game in my view. It does not diminish the strong effort from part of our folks to push through the first significant ground water management law. But there’s still fierce opposition there still is today to even talking about how much [unintelligible] and I do think we need to shift and in a sense that is important than necessary to have goo information on the table to be able to manage. We are only a 2.3 Trillion Dollar economy. We’re only one of the top 10 of the world. You’d think that with water being fundamentally important resource in the economy, that at the scale that we’re operating, it’s the equivalent of a major nation state that [unintelligible] figure out a way to actually measure and manage resources to [unintelligible]
Steven: Yes, and actually to that question I think we have time for just one other question, in this portion of the breakout Bob but you mentioned obviously the size of the California economy, and yet many folks would argue that our water laws are archaic, that they basically were set up at a time that they couldn’t foresee the growth of the economy as it is today. And I think Australia was able to remake its water rights? If I remember correctly, how can California do something similar? What do you think?
Bob: I [unintelligible] Australian models directly political [unintelligible] whipped out quite a lot spent time in there. There are big differences between the Federal role and state role there and the tradition on the ground. So I think we have to deal with our own reality in California. Truth is, in 1848 you know, we picked up the Spanish law, the Pueblo Water Rights. That was our first water doctrine. Then we created a brand new one the next year in the Gold Mines, under the appropriate doctrine, and then in 1850 we created a state, and we adopted ___ rights from the English common law suing, and in the states for less than 2 years we picked up 3 water doctrines and have been fighting over it vigorously. Since we created the state. None of them really are logic, are legal logic for a sustainable water management system. They really aren’t. they were designed for different purposes. For clarifying who had rights to what on Federal territory before we were even a state and so forth, so I do think it probably is time to do a serious rethink of what is a legal framing that makes sense. In the meantime, much as we have over allocation on paper of water rights; that’s ___ more water than is really there. And so we’re really setting up for allocation sites that could be from an economic standpoint, from an equity standpoint not necessarily very fair either. I don’t have the answer. But I do think that it probably is time to take a hard look at a legal framework for water management that works better from the standpoint of sustainability as well equity.
Steven: Exactly. And I wonder how easy a process that would be in other words, the current legal framework has been in place for close to 100 years. There are a lot of vested interests in maintaining that legal framework. I mean how feasible is it to have folks that down rationally and try to hammer out a more equitable distribution of the water pie?
Bob: Well, I think it’s been so unfeasible for so long that it’s essentially of the table, and for the last 6 months I’ve been asking people from various quarters leading figures in the water battles in California, their thoughts on the water rights issue, take a serious look at water rights, and the answer is just a instead of “no way, we’re not going there” it’s “you know, we’d need to protect these senior rights and stuff off but yes they’d probably need to talk about it. I think we’re inching toward a dialogue in California it could be quite healthy to really figure out what do we need to do and what do we need to know to be able to manage water differently. It’s going to be the [unintelligible: “foreign doc of noturnis”] no question. And maybe that’s the way it works I mean that’s our system and it’s not necessarily a bad thing. Put all the information on the table and get people to sort it out. But it probably would get quite ugly, hopefully we’d figure out ways to do it that are not so ugly. I do think Felicia and her colleagues on the board are doing a tremendous job in trying to steer through this and it is taking people that have an ear for all sides and they’re trying to think about the equities. To guide a dialogue to try to get in to actually changing [unintelligible] for which it’s not so far.
Steven: You know you I mean you mentioned a couple of times, equity a couple of times. Is the water board the sole arbiter of equity in California, or should that be a larger dialogue?
Bob: Well of course, we will structure they are quasi judicial and then it goes on to the courts, and the courts, they get ultimate arbitral… interpreting the law, when it comes to politics people can stare and write that political dialogue.