Originally posted at the Public Policy Institute of CA.
By Lori Pottinger.
California’s residential water pricing is highly variable, with some of the state’s poorest communities paying many times more for water than neighboring towns and cities. We talked to JR DeShazo—director of the Luskin Center for Innovation at UCLA and a member of the PPIC Water Policy Center research network—about his work to document the inequities of water pricing in Southern California.
PPIC: What prompted you to research water pricing, and what did you learn?
JR DeShazo: A reporter from the Los Angeles Times asked me if I knew how many retail water agencies there are in LA, and how they vary in cost for service and approaches to water conservation. I couldn’t answer his questions. When we started to research these topics, we found that there wasn’t a good source of information. Even the State Water Board had only very limited information, especially on many of the smaller systems. So we embarked on a mission to gather as much information as possible on Los Angeles County’s 223 retail agencies, and compiled it into a water atlas and policy guide. It maps the county’s huge pricing variability—the highest-cost system charges 10 times that of the lowest-cost system. So for example, water bills in Pico Rivera average less than $200 per family a year. Very close by in Lynwood, that same amount of water costs a family more than $1,500. The atlas also includes information about water sources and contamination from pollutants, climate change risks, and other variables that could pose a threat.
One surprising thing we learned is that while we have a moderate amount of information for about one third of the state’s water systems—which covers 85 percent of the population—we have very little information about the lower third, which includes the state’s most vulnerable water systems and communities.
Because no one had done this sort of analysis at state or county level before, none of the entities working in water fully understood the system they were trying to serve—essentially, we lacked a census on the state’s key water issues. The information we compiled helps fill that gap. For example, it can help the State Water Board hone where its financial assistance is most needed, and help the USDA better target emergency assistance to rural communities with drinking water problems. And it can also help the water system operators learn how vulnerable they are in terms of drought and climate change.
PPIC: What factors cause water-pricing inequality in California?
JD: Critical to understanding the state’s water systems is the tremendous amount of residential segregation by income in California. The concentrated pockets of lower-income residents, especially in rural areas, also tend to be served by small, underperforming water systems. Water systems serving very low income communities have extremely limited capacity to provide affordability assistance to their poorest households. On top of that, there are a number of factors that drive up costs that are more prevalent in these areas—including the small size of the system, geographic isolation, reliance on imported water or a polluted water source, or private, for-profit management. In some cases, we’re talking about communities where over half the residents qualify for welfare while also having the highest water costs.
PPIC: What policy changes could help at the state and local level?
JD: Going forward, the goal is to reduce the number of small, disconnected systems. The state is trying to do this with a process called consolidation, which links small systems to neighboring bigger ones. This brings economies of scale and a more diverse water supply. At the local level, counties have to stop creating small, fragmented systems. New developments should not be allowed to have independent water sources. Counties have to encourage connectivity to bigger existing systems.
We can also increase regional resiliency by encouraging more water trading between water systems. Some systems have more capacity for groundwater storage, recycling, or stormwater capture and reuse than they need. For example, the city of Los Angeles has more groundwater capacity and water recycling capacity than it can use right now, but it isn’t sharing it with neighbors who are paying five times what they pay. If a market could be established in urban Los Angeles allowing for water supply trades, both large city systems and their neighbors could benefit either in terms of cost reductions or reliability enhancements. The market could also serve as a model for other urban areas facing water scarcity crises.