Homes near the farming area of De Luz in Fallbrook on Feb. 1, 2022. / Photo by Adriana Heldiz

Eleven years ago, when the San Diego County Water Authority was going through the final stages of approving what had, by that time, become a decade-long odyssey to create the first desalination plant on the West Coast, the agency made a prediction.

Yes, the potable water the plant created from the ocean would be expensive. Yes, it would take a lot of energy. But the agency asked us to compare that to the water we imported from Northern California and the Colorado River, via the Metropolitan Water District. Officials said in countless hearings and documents that, within 20 years, that imported water was going to be more expensive. We would look brilliant having made this investment.

Now, those projections look terrible. The cost of desalinated water soared, just one of the many factors that pushed the cost of water in San Diego higher than almost anywhere else in the country. At the same time, the cost of water from Met climbed but nowhere near the pace. Nobody draws up projections now where the two lines – the cost of desalinated water and the cost of Met water — cross at any time in the foreseeable future. They won’t.

What happened? The Water Authority didn’t realize San Diego Gas & Electric was also on a building spree and would also raise its rates to some of the highest in the nation. Pushing 50-million gallons a day of water through reverse-osmosis filters to make it something we can drink and pour on plants takes a lot of electricity.

Now, San Diego’s water is more than $400 more per acre foot than Met’s.  

“The projections were wrong. There’s no denying that,” said Dan Denham, the new acting general manager of the Water Authority. “Part of what the Water Authority needs to be better at is being more transparent about when we’re wrong about some things. We tried to predict the cost and we were wrong.”

But, Denham told me, the projections, the high costs, they’re all part of a largely successful three-decade-long push to make San Diego water independent, to shelter it from drought and cutbacks it can’t control and to thrive when the rest of the west dries. It was a project he said even the two water agencies that are now leaving the Water Authority largely supported.

To pull it off, desalination was just the biggest, most interesting investment they made. But it was by far not the only investment. The Water Authority is now about to mark the 20th anniversary of the Quantification Settlement Agreement, the historic deal between all the huge major Southern California water agencies that essentially, for the first time, quantified just how much water the Imperial Irrigation District would use and send the rest to San Diego.

It was a huge deal and a very expensive one. It required the Water Authority to line the All American Canal with concrete to keep some of the water from leaking into Mexico. It required other, large expenditures and now it, too, is one of the major drivers of the cost of San Diego water. It was a historic deal even the Fallbrook Public Utility District and Rainbow Municipal Water District supported. All the districts that make up the Water Authority’s governing board supported that vote.

But now Fallbrook and Rainbow want out.

The Incredible Separation

County Supervisor Jim Desmond didn’t return my calls. I wanted to know why it was so important for him, as the chair of the Local Agency Formation Commission, or LAFCO, to approve Fallbrook and Rainbow’s application to leave the Water Authority and instead join the Eastern District in the Riverside area.

Desmond’s board delayed the decision but then the city of San Diego and the Water Authority, so concerned about the divorce, got Assemblywoman Tasha Boerner to push a bill that would require voters across the entire county approve the decision, a vote that would almost certainly fail.

Desmond and Fallbrook and Rainbow needed five votes but one of the members, Jo MacKenzie, seemed to not support it. She had let them know she couldn’t attend a meeting in July. Seeing the legislation progress, Desmond moved the vote to July. MacKenzie’s alternate supported it and Fallbrook and Rainbow got the five votes they needed. The divorce was done.

It was hardball and it worked.

At least, unless the state successfully intervenes. The city of San Diego pulled every lever it has in Sacramento. The Chamber of Commerce, the labor unions, all the big shots they could find spoke in favor of legislation to force a countywide vote and halt the divorce. Fallbrook, though, got Big Avocado to weigh in.

The vote needs two-thirds support in both the state Senate and Assembly. And it seemed to be breaking down as a Republican vs. Democrats issue and, with a super-majority of support among Democrats, that would be fine. But last week, one Democrat balked and that’s not a good sign.

Again, though, these are big fights in big places. Why so intense?

Desmond didn’t want to talk. Jack Bebee, the general manager at Fallbrook was up for talking.

Bebee’s district, unlike Rainbow, did oppose desalination and he says his district will never see the benefit of it. Fallbrook has a direct connection to Met’s infrastructure already. All that will change, as he puts it, is he’ll start getting an invoice from Met and it will be a lot cheaper.

“We’ve been paying for infrastructure we don’t need or use,” he said.

To him, the urgency is simple. “Fallbrook is Fallbrook because of avocados. If the cost of water goes up too much, it essentially creates land that has no value,” he said.

They want out.

But how about the other side? Why is the city of San Diego and the Water Authority so intense about stopping this separation that they must take it all the way to Sacramento and demand an extraordinary act of the Legislature?

They have their stated reasons: When Rainbow and Fallbrook leave, the rest of us will pay more for water to pay off the bills we took on to build all the things we built and to pay off all the deals we made. They also point out that San Diego has finally become a player at the board of Met, where with the slimmest of margins they were able to get their preferred chairman in place at Met and their preferred general manager.

But that seemed low energy to me. Something else is going on. Why are they all so fired up?

The Real Reason

Water is different than other collective efforts we undertake. We don’t let voters decide on water rate increases like we do tax increases because somewhere deep down we know it’s too important. You can let roads and libraries deteriorate. The police will always complain but they still show up. If taxes don’t go up, the rot may come but it will come slowly.

If water stopped flowing, though, everything is over. There’s no Qualcomm or UC San Diego. There’s no Ocean Beach or Chula Vista. There’s nothing. San Diego had a tiny straw tapped into far away sources of fresh water.  When the city’s big shots realized how easily Los Angeles could pinch it, they panicked.

The Water Authority turned into a machine driven by people who really believed they were on a historic mission to preserve the region as a functioning civilization. They took on massive legal challenges to secure their rights to water. They demanded member agencies get on board with major investments. They made reservoirs deeper, canals more efficient and they became the first agency in California to turn saltwater to freshwater.

Twenty years ago, when the vote to finalize the great deal between all the massive Southern California water agencies came, a couple old farmers opposed. By the end of the day, staff had gotten them to change their vote so it would be unanimous.

All for one, one for all.

Fallbrook and Rainbow leaving could mean this period of expansion, innovation, investment and independence is coming to an end.

“If agencies are able to leave, what’s going to compel people to make further investments in water? Who makes those investments if you know another agency making the decision can all of a sudden leave? If you vote on something, you’re in it and you have to stick around and pay for it,” Denham said.

It means that future plans, like massive pipelines or wastewater re-use or more stormwater capture, are in jeopardy. It also means the contractors and workers who want those jobs don’t get them.

The great separation battle in San Diego water is interesting for all the normal reasons, the impact on ratepayers, the potential change to power. But what’s really interesting is to witness this moment: Is the Water Authority’s massive spending simply being checked, for the first time? Is it hitting its limit of what it can ask for from all of San Diego’s various water users from farmers in Fallbrook to someone in a one-bedroom in Hillcrest?

Or is its historic endeavor, its march to independence and its ability to not only preserve San Diego from drought but maybe even supply California and the west with water coming to an end? Will it march forward and do more with the help of the Legislature or is this it?

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Scott Lewis oversees Voice of San Diego’s operations, website and daily functions as Editor in Chief. He also writes about local politics, where he frequently...

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  1. This has nothing to do with anything you mentioned. It’s part of the wider culture war. Fallbrook MAGA town doesn’t want to pay more for decisions made by people they hate in the city of San Diego even if it’s in their/the region/the nation’s best interest. They think of the elected officials and policymakers to be effete losers who are fixated with providing free syringes to drug addicts, and they want to see them fail more than they want to see the region’s water policy succeed. It’s visceral, and if you don’t understand it, you won’t.

    1. Yes. It has absolutely nothing with being promised a product at a price and having been unable to follow through with that promise, resulting in the customer choosing another supplier.

      Nothing at all, I’m sure…

      1. Once again, the rot at the core of the issue is SDG&E. If they weren’t price gouging us to provide record profits to their shareholders we wouldn’t be in this situation, the desalination costs would be more reasonable and in line with the projections. SDG&E is corrupt to the core and it needs to be ended. Our power agency must, must, must, be converted to municipally owned and operated not-for-profit. Anything else is a complete dereliction of duty by our elected officials.

  2. One thing that gets me about this move is that these districts are opening themselves up to getting hit with water use restrictions that they have not been subject to as a part of SDCWA. Obviously the water is much cheaper but what happens when we go back to our typical rainfall and Metro imposed restrictions on them, will the farmers be subject to those restrictions?

  3. So, let’s see…

    San Diego Water promised their customer – Fallbrook and Rainbow – their product would be cheaper. They failed to deliver on that promise.

    They, like all customers, recognized that and are now choosing a different supplier.

    Imagine that.

    That’s not anything we see in any transactions anywhere, right?

    Certainly everyone reading this article doesn’t do that. When someone who has promised them a product at a price decides to raise that price, they just erase the number on the check and happily write in a higher one – right?

    Maybe the solution here would be for San Diego Water to figure out how to effectively manage it’s business?

    But then being government there is no expectation of that, nor any accountability for not doing it.

    Missing from this article? A list of the management employees at San Diego Water who lost their jobs because they failed to deliver what they promised.

    Missing because that list does not exist. Which is why we have these problems in government entities, isn’t it?

  4. Perhaps there is a direct connection between the California State Legislature’s war on practical, privately funded, inexpensive conventional electricity generating and the cost of desalinated water? Before giving up on desalinated water, identify the culprit. A legislature that is forcing the entire state’s transportation and residential sectors to electrify, while at the same time denying practical affordable electricity.

    1. Great point. But I would add the ridiculous-ness of the fact that they’re throwing away a perfectly good generator in San Onofre that cost billions to build rather than using it for a portion of the “clean” energy they want…

  5. When the decision was made for these upgrades (including desalination and the Pure Water plant), all parties agreed, including to split the cost spread over several decades. Unfortunately, the SDCWA wasn’t forward-thinking enough to install solar panels to offset the energy costs at the desalination plant (although, in theory, that could still be done). And the Pure Water project is going to cost a lot more than originally projected.

    But walking away now is like a group sitting down for dinner, then one couple decide that the food wasn’t worth the price–or was more expensive than they expected–and walk away before the waiter brings the bill, stiffing the rest of the people at the table. That’s not OK.

    1. That should read “and walk away when the waiter brings the bill.”

    2. No, it’s not.

      Let’s say you and I agree to order some food, and we agree you’re going to pay for it and I’ll reimburse you.

      We decide on pizza because it’s economical, we agree we want the Chicago deep dish (the best kind of pizza). The menu says it’s $20, so that will be $10 each.

      You call in the order. During that call they tell you their rates have changed and it’s no longer $20, but $40.

      If you don’t stop the process and say “Hey, this is going to cost twice as much as we originally agreed, do you still want to do it?” and simply go ahead and approve that – do I REALLY now owe you $20 even though the agreement we came to was for $10?

      And should you simply be able to present me with the bill anyway, and force me to pay it?

      Nope. No one would take your side on that. No people, no courts.

      And no one should take the side of the Water Authority here. If they can’t figure out how to make a project come in on time and on budget, and aren’t going to give the people who agreed to it the chance to bail out when the true costs are known, they have no claim.

      Your approach is part of the reason why we have a government that can’t seem to manage even the simplest project effectively, much less larger projects like this.

      Let’s not enable the problem, let’s be part of the solution. Government entities (and individuals) should have to live with the consequences of their incompetence, that’s the only way improvement happens anywhere.

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