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Monday, July 2, 2007 | When San Diego’s mayor and business leaders recently implored residents to conserve 20 gallons of water daily to stave off future shortages, they appealed to the public’s sense of duty and personal ethic.
They emphasized that conservation was the right thing to do, given the eight-year-long drought on the Colorado River and dry winter in the Sierra Nevada. Both are major sources of San Diego’s water.
But those leaders steered clear of telling residents that they’d save bundles of money by conserving water. A review of the city of San Diego’s water rates shows that average users will save $1.85 a month if they meet the 20-gallon challenge.
As precious and scarce as it is in arid Southern California, a gallon of water costs a household less than a cent. So while local officials encouraged conservation, they weren’t able to offer any financial incentive to residents to make those cutbacks.
As part of its conservation challenge, the water authority offers tips, such as turning off the water when you’re brushing your teeth. Doing that saves two gallons per minute. The impact on a family’s pocketbook is less than a penny.
While homeowners throughout the region receive a monthly water bill, they’re not paying for the actual value of water. That water bill pays for the cost of capturing the water, transporting and maintaining the aqueducts and pipes that convey it — not for the water itself.
When strife hits the Middle East, the price of a gallon of gas increases sharply. As the supply shrinks, the price goes up. When drought hits the west — similarly cutting supplies — the short-term cost of water stays the same.
“We’re not paying for the actual thing that is water,” says Gabriel Eckstein, director of the Center for Water Law and Policy at Texas Tech University. “When you have shortages with water, it’s so regulated and managed by the utility or government, the prices don’t fluctuate. Utilities are regulated so they can’t increase the price of water to a level where they’re capturing its true value.”
Some argue that if water were priced as a commodity, subject to supply-and-demand market forces like those that govern the prices of natural gas and oil, conservation would happen more readily because water would be more expensive.
“It’s cheap for me to water my driveway and clean crap off with the hose instead of a broom,” says Rick Van Schoik, managing director of the Southwest Consortium for Environmental Research and Policy, based at San Diego State University. “The extraordinarily cheap price of water enables us to be water ignorant in our daily activities. We use water automatically instead of thinking about efficiencies or conservation.”
While a market for water might help curtail its use, others argue that water is a public resource that should not be distributed to only those who can afford it.
“What do the poor do?” Eckstein says. “I don’t think society is willing to bear the burden of pricing people out of the market.”
In the West, water managers say that water is increasingly being treated as a commodity — with a value attached to the actual liquid, not just its supporting infrastructure. Maureen Stapleton, general manager of the San Diego County Water Authority, points to rate structures that charge residents based on the volume they use. The more water a household uses, the more expensive the water gets.
“There is an element of market conditions as a component to water supplies in California,” Stapleton says. “You end up spending more dollars when the supply is scarce.”
Water’s value is more frequently being reflected in the search for costly new supplies.
As part of an effort to diversify the region’s supplies, the water authority reached an agreement in 2004 with the Imperial Irrigation District to purchase Colorado River water used by Imperial County farmers. The deal attaches a value to the water that San Diego gets. Imperial County farmers earn money by not using that water.
But the water will cost the authority about 67 percent more than the water it buys from its largest supplier, the Los Angeles-based Metropolitan Water District. Water from MWD costs $331 for an acre foot — about 326,000 gallons.
“We’re paying a little bit more than we would elsewhere,” Stapleton says. “As a result of that payment, we’re increasing our water reliability for the region.”
That kind of deal — technically called an agricultural-to-urban transfer — is becoming more common throughout the West as water agencies look to increase supplies to satisfy the thirst of booming city populations.
Steve Erie, a University of California, San Diego political science professor who has studied water politics, says markets are gradually emerging as agricultural users sell their water to cities. But those markets are largely dominated by transfers among public agencies — not private sellers. Erie warns that privatizing water or attaching a value to it could be dangerous.
“It isn’t like power. You can live without power,” Erie says. “You can’t live without water. Since it is an essential of life, there are some real issues about making sure it is available to all at a reasonable price.”
Erie warns that the price of water will continue rising as it increasingly becomes treated as a commodity.
“And in 10 years,” he says, “they’re going to have to do something with a lifeline program (for the poor).
“I would bet on water futures.”