How to Start A Rebellion

Deborah Sullivan Brennan’s UT San Diego article headlined “Council OKS Water Rate Hike” is a lesson in how to start a rebellion. It is a given that our most precious commodity is too cheap, but this article fails to tell the consuming public the reasons why water must be priced according to its value to the City. The “….to ensure that SD has the financial reserves needed to maintain its good bond rating and cover rising wholesale costs” means NOTHING to the average user. Do your homework. Help the consuming public understand we live in a desert hundreds of miles from water sources subject to natural disasters and political hanky-panky and we have to increase water prices to become water independent to ensure a reliable supply, without which the City’s economy will collapse. People are not stupid. When they are given the proper information, they make good decisions. Let’s help them get there!

The graph that accompanied the article did not even take inflation adjustments into account. This is sloppy reporting. Inflation alone has increased by 26.9% over the 2003 base year used, so with no increases the cost would be $41.70, not the $31.97 noted for 2003. So, inflation-adjusted, the price of water has risen by 71% for the typical user since 2003.

Whoa! Big deal! Over the same period another commodity, gasoline, has increased (inflation-adjusted) by 65%.
But that misses the point. San Diego can actually find itself without water and no way to get it.

So how do we avoid that possibility? By becoming water independent. Will we ever be 100% water independent? Not likely, but that does not means we don’t work to get close.

How do we get close? By pricing water so the infrastructure can be built to take advantage of indirect potable recycling (IPR) or direct potable recycling (DPR). But that takes gobs of money. Right. Let’s take a look at some numbers. In 2011 there were 1,064,048 households in San Diego County. But wait, of the 400,000 acre-ft of water coming into SD County, a large percentage is sold to agri-business. So let’s not put the entire burden of providing the funds for IPR and DPR recycling on the backs of the one million households. It would take a study far beyond the scope of this blog to do the demographics and calculations, but let’s do some assumptions.

First, let’s make an assumption the total bill for an almost water independent San Diego would be in the order of magnitude range of $5 Billion. Nice round number, and small change inside the Beltway in Washington, D.C. But we’re leaving the Feds out of this one.
The infrastructure would not get built overnight, so let’s make another assumption we can get it built in ten years, from design through cutting the ribbon. Then we are spending $500 million a year on average over the ten years. How much will we have to raise the price water to pay this bill?

We are using round numbers for ease of calculation, so with a million households we have to raise $500 per household per year to get to our $500,000,000 annual payment on the new water infrastructure. Let’s see, that means if we divide the annual increase of $500 by 12, we get $60.00 per month. The average current resident per the Water Authority pays $70.00 now.  We have to not quite double that number to get the funds we need to guarantee a reliable water supply so Mr. and Mrs (or a guy and his significant other) Average Water User actually can flush their toilet and take a shower regardless of any interruption in supply caused by earthquakes in Northern CA or the politics in Sacramento.

Imported water is about $800/acre-ft now. If the water authority added a surcharge to fund the needed water infrastructure, the cost per acre-ft would rise to $1485, or less than the projected cost of desalinated water from the facility under construction in Carlsbad, of about $2000/acre-ft. It is doable, but it will take political courage that seems to be as scarce as rainfall this 2012-2013 season (4,62 inches, or less than half our annual average). And the above figures put the entire funding  burden on the households with no contribution from agri-business.  That is material for another blog.

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For some source statistics, go to http://nettstrategies.com/2013/07/30/the-dyanamics-of-san-diegos-water-supply/