We Pay Too Little for Water in California

Published on February 3rd, 2010 | by

Even in water starved California, water is probably our cheapest monthly bill.

Because public water utilities are regulated, they have to keep prices low. Yet water utilities have costs for water that are rising fast for infrastructure replacement, energy to move it around, regulatory compliance treatment, and population growth. Water is priced artificially low, in comparison with its real value. But should it be?

Image: MarlerblogCalifornia_Farming
Irrigation in Fresno, California

Some essential infrastructure is increasingly not being replaced because our water is so under priced. The same pipes that delivered your grandparents water in the 1920s will likely deliver your grand-childrens’ water in the 2090s.

California spends 20% of its energy budget just moving water around. It takes energy to pump water up from the ever lower and lower aquifers to ground level, to pump water through canals and pipes, to control water flow and treat waste water, and to desalinate brackish or sea water. Think of all the cities and towns with houses up hills. It takes energy to pump water up hills.

Because of the low price there are disincentives to spend more than the regulatory compliance minimums to keep water safe.

But public utility regulation was set in place long before our drought. In the last thirty years, as California’ regional temperatures have climbed 3 degrees, our declining supplies of water is a source of stress. City dwellers are pitted against farmers, who take out their stress on environmentalists.

Perhaps, as with electricity rates, we Californians should have tiered water rates where a water-basic “human right” supply of water is priced just below or at full cost while beyond the first tier the rate is substantially increased through tariffs and usage levels that provide a true and measurable disincentive to waste.

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