San Diego has been in the news over the last two months because it is actively trying to secure partners to buy some of its surplus water supply. It is starting to explore interstate water trading on the Colorado River and has secured a 20-year sale to Riverside County. It’s rare to find a municipality looking to sell supply in the arid southwest, but the San Diego County Water Authority secured additional supplies through a large desalination project and water transfer agreement only to find that the higher costs of these supplies have led to reduced demand by its customers. This example provides an interesting case study for municipal water providers in the West who are trying to create reliable water supplies and figure out how to balance the budget in doing so with dynamic customer demands. Flexibility in being able to reallocate and trade water assets will continue to be an important aspect of such management.
WestWater has been assisting municipal water providers with financial planning, including rate studies, fee structures, and scenario analysis of water supply investments. We have developed unique models to understand multiple aspects of these financial decisions, including risk, cost, and capacity. Municipalities are facing unique financial challenges in the water space and quality support is needed to inform decisions.
“The Water Current” is a monthly news digest that provides brief summaries of interesting and timely news stories related to water economics and water markets in the Western United States. Our team tracks new developments in water policy, management, and conflicts, sharing articles relevant to their work and services.