Professor Carson made quite a statement in his opening remarks with the point that there is no water shortage in San Diego — it’s just that we will have to pay more to get water and we’ll have to plan and collect for that.

So let’s delve into the moderator’s question, which Carson’s post provoked:

Are we dealing with an ever-more scarce resource that we’ll have to conserve to ensure there is enough for vital business and health needs? Or are we dealing with an ever more valuable resource that we’ll simply have to pay more to import or create?

This question asks: Is the supply of water fixed from the point of view of San Diego businesses and residents? Our willingness to pay a higher price might allow us to import or capture a larger portion of water from Northern California or the Colorado River, but that will depend on the decision makers in charge of their sources.

Higher water prices might also encourage new sources of water (e.g., desalinization or enhanced usage of “gray water.”) A reduction in water usage, involving conservation, greater efficiencies, and adaptation of living styles and business models, will have to be a large part of the solution.

Now for some other questions from users:

Stephen Waits wrote

“All three of your panelists are spot on. Economics solves this problem. Forget regulation, which is expensive (and near impossible!) to enforce. Raise the price of water and less is consumed. That is just plain common sense. One thing is clear, any sort of “base charge” should be eliminated. Water users should pay for what they use, nothing more, nothing less. The real question is how to raise prices. I prefer a flat rate; however, I understand the draw of a tiered rate. A flat rate that’s too high may make water seem expensive for low-income people. One that’s too low won’t discourage conservation from the biggest users. A tiered structure attempts to solve this dichotomy by artificially lowering the rate for the smallest users (i.e. low-income) and artificially raising the rate for the biggest users (hotels, office buildings, etc.). It sounds great, but is unfair!!!”

Your point about preferring a flat rate is well taken. The problem of low-income households could be addressed by granting them special subsidies. The bigger problem relates to individuals or businesses who had originally invested with the belief that water would continue to be priced at low rates. Granting them an amount of “base water usage” qualifying for a standard price with higher rates applying to large usages would ease some of the potential economic hardship and support adjustments over time.

Ian Trowbridge wrote:

“No-one has addressed the issue of commercial users versus household use and the politicization of water rates. The hospitality issue, hotels and restaurants, are major water users and use their political heft to ensure they have the cheapest water available even at the expense of individual water users. The biotechnology industry needs access to high quality water in substantial amounts. Finally, the companies producing purified products from seaweed use obscene amounts of water and certainly in the past have used their political power to obtain equally obscene cheap water. Maybe I am wrong about this and if so please set me straight.”

Lobbying efforts should definitely not be a factor in determining water rates. Commercial usage actually accounts for a relatively small amount of total water consumption in San Diego County. In 2008, commercial businesses accounted for 17 percent of the county’s total water usage. Households accounted for 59% of the total, with residential landscaping consuming nearly a third of the County’s water supply last year.

George wrote:

When water agency operating expenses are drawn from water used fees, the agency has an inherent conflict-of-interest as a consequence. That’s why some water districts face operating expense problems when people conserve their water use. A base charge that goes towards operating expenses provides more transparency for the consumer—they know exactly what the cost of the water itself is, and they see the operating costs separately. That’s how the city of San Diego operates.

Many companies have faced this problem. The first approach should be a major effort to improve productivity and lower costs at the water agency.

Joel Price wrote:

As a residential 2 person household who has made a point to conserve, I’m frustrated. When I look back on my bill and it says I used 20 percent less than last year and my payment is 100% higher than that previous year. I can’t help to think the system is flawed. Using the same reasoning that “economics solves this problem” why can’t people who conserve receive breaks, credits or incentives? Should it go both ways?

This same problem has affected other commodities. For example, although many people cut back on energy (use of air conditioning, heating, and driving), many still saw their total spending on energy rise when the price of oil skyrocketed. Clearly, though, individuals who conserved more and adapted their energy consumption saw smaller increases in their total energy bills than others. To minimize the adverse impact on households, a phasing-in of higher water rates would be preferable.


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