Southern California water agencies make a sharing deal amid drought

The Los Angeles Department of Water and Power has agreed to give a portion of the water it gets from the State Water Project to the region’s water wholesaler to help smaller water districts that are facing greater challenges amid a severe drought.

The State Water Project was constructed after World War II to funnel water from northern California to southern California cities and the agriculture-heavy Central Valley.

Amid persistent drought conditions, the California Department of Water Resources has warned that the state’s water network might supply no water to southern California water districts next year.

An August view of the State Water Project’s San Luis Reservoir near Los Banos, California, which was only at 18% of capacity and 38% of historical average.

Kelly M. Grow / California Department of Water Resources

Those water districts in southern California are served by the Metropolitan Water District of Southern California, a water wholesaler that supplies water to 28 regional member agencies in Los Angeles and Ventura counties.

With the DWR warning it might cut off the spigot, MWD worked out agreements to help out the districts that would be most harmed by the move. One of those agreements was with LADWP.

“Living with limited water resources isn’t just a phase — it’s the new normal, and we have to work together as a region if we want to ensure that we can count on access to water for generations to come,” said Los Angeles Mayor Eric Garcetti during an Oct. 5 press conference held at the Los Angeles Aqueduct.

MWD’s ability and willingness to prepare for and mitigate the effects of drought and climate change on its own finances and that of its 28 member agencies factor into its AA-plus, AAA and AA-plus bond ratings from Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.

Rebecca Kimitch, an MWD spokeswoman, attributed MWD’s consistently high bond ratings to high scores in areas the rating agencies consider including board governance, management, financial policies and performance, and bond covenants.

“Our investments in storage, supply-reliability projects and our demand management programs have been critical to our resilience to the impact of the previous and current drought,” she said.

While the drought has created challenges for Metropolitan and its member agencies, she said “it is only one factor among several that determines our credit ratings.”

MWD “benefits from an immense service area that includes over 300 cities across six counties within southern California,” Moody’s analysts wrote in a June piece. “Consistent finances with sound debt service coverage and liquidity levels further support a strong credit profile.”

Both California’s State Water Project and the Colorado River have experienced water shortages as a result of severe drought conditions affecting the Western United States. MWD and LADWP benefit from both of those water sources, and have reservoirs to store water. But that isn’t true for all of the agencies that MWD supplies with water.

Southern California receives a quarter of its water from the State Water Project.

DWR sets the allocations from the State Water Project for the water agencies that contract with it. For instance, if a water agency contracted for 100,000 acre feet, and the state sets the allocation at 15%, the agency would receive 15,000 acre feet of water. On Sept. 30, the state set the allocation at 5% because of the drought, the lowest it’s been based on how much precipitation occurred and how the fisheries are doing.

“This year the conditions on the state water project in Oroville and in the reservoirs are so low, that we are projected to start 2022 with zero percent allocation,” Kimitch said. “It’s likely to go up from zero, but it might not go up a lot more.”

Zero percent might be a little bit of hyperbole, because more water comes from the State Water Project then just that allocation, but zero is low, and it is an indication of just how bad the drought is. Though the allocation is set annually, DWR and the governor typically go up and measure the snowpack to great fanfare, and then DWR announces whether adjustments have been made to the water allocation.

Some of MWD’s members, including the Las Virgenes and Calleguas municipal water districts, don’t receive water from the Colorado River because the system isn’t plumbed in that direction; and they don’t have groundwater.

Las Virgenes provides potable water and wastewater treatment services to residents of Agoura Hills, Calabasas, Hidden Hills, Westlake Village and adjacent unincorporated areas of Los Angeles County including the Santa Monica Mountains and Chatsworth. Roughly three quarters of Ventura County residents use water purchased by their retail purveyors from Calleguas’ distribution system.

“The city of Los Angeles has some areas that can’t get Colorado River water, but other areas can,” Kimitch said. “They also rely on the State Water Project. Normally, they prefer to receive water from the State Water Project, because they can get it untreated, and it’s cheaper. They can only get treated Colorado River water, which is more expensive. But LADWP agreed to receive treated water, rather than SWP water, so that areas that rely on SWP will have enough water.”

Los Angeles Mayor Eric Garcetti, at podium, is flanked by Metropolitan Water District chair Gloria Gray and MWD General Manager Adel Hagekhalil to announce a water conservation partnership.

Los Angeles mayor’s office

MWD will credit DWP for the water exchange, so the city isn’t footing the bill for the more expensive water, Kimitch said.

“Los Angeles did a good thing. It helps,” Kimitch said.

“The key to being resilient during dry weather periods is to continue investing in and strengthening our local water supply,” said Anselmo Collins, LADWP’s senior assistant general manager of the water system. “That is why we’re working on expanding our local stormwater capture capabilities through large and small infrastructure projects.”

Even with the announcement, if next year is another dry year, the people who receive water through MWD are going to have to conserve more water. The region had maintained the 15% drop in water use that occurred during the six-year drought that ended in 2017, according to speakers at the press conference. But California Gov. Gavin Newsom recently asked everyone to cut that use by another 15%.

“We have managed through this dry year thanks to innovative shifts in our operations, water stored in reserves and increased water efficiency across the region,” said Gloria Gray, chair of MWD’s board. “But we are facing unprecedented conditions in our northern California reservoirs, and next year could be an even bigger challenge. So, we need everyone to work together to save water, particularly in communities that rely on the State Water Project.”

The MWD also has made changes to the region’s pipes, including rehabbing a pumping station to pump water into areas that could not access Colorado River water. It’s not just those two water districts that are dependent on SWP water in MWD’s region. The San Gabriel Valley and the Inland Empire are also state water dependent.

MWD has been investing in its storage capacity for years, going back beyond the last drought, she said.

Plans to expand delivery capacity while finding environmental solutions have stalled.

Most recently, a proposal in the state Legislature to spend $785 million to fix the state’s water delivery system was pulled in early September by its chief author, state Sen. Melissa Hurtado, D-Sanger. Hurtado pulled the legislation after an Assembly committee stripped the funding and made other changes to the legislation. The Senator’s decision turns Senate Bill 559 into a two-year bill that could be revived next year.

Due to previous conservation efforts and investments in storage and new technology, the Southern California region is better positioned to manage the drought than much of the rest of the state, according to Garcetti’s office. As current dry conditions continue to break records, it has become imperative that conservation efforts improve to protect the longevity of future water supplies, speakers said.

“Long-term water supply reliability will require significant investments to diversify our portfolios and modernize the State Water Project. Here at LVMWD, we plan to locally source 15% of our water supply through the Pure Water Project Las Virgenes – Triunfo, an indirect potable reuse project treating recycled water to above drinking water standards,” said Jay Lewitt, President of the Board for the Las Virgenes District.

Los Angeles County voters approved Measure W in 2018, a parcel tax on property that provides nearly $300 million in local, dedicated annual funding for projects that increase local water supplies, improve water quality, enhance the public right of way, and protect public health.

In response to the 2014 drought, Garcetti signed Executive Directive 5, which set a 20% reduction target by 2017. The city reduced potable water use from 133 to 106 gallons per capita by February 2017. In 2019, Garcetti announced that the city would recycle 100% of its wastewater for reuse by 2035 at the Hyperion Water Reclamation Plant.

“Collaboration amongst all these agencies speaks to the importance of preserving and protecting this vital resource,” said Steve Blois, Board President of Calleguas Municipal Water District. “California has faced drought before, but not under such extreme, dry conditions. We all must work together to explore the full capabilities of our water systems.”

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