My earlier concerns still stand (voluntary compliance and price increases are too small). OTOH, there are a few nice features that I missed.
I talked to Alf Brandt (Principal Consultant, Assembly Committee on Water, Parks & Wildlife), who helped draft AB 2882. He says that the bill removes a barrier to increasing price, i.e., that water rates are a form of tax and raising them will require referenda, etc. Given the toxic nature of tax increases (not spending increases!) in California, I agree that this is a problem. The bill addresses it by allowing utilities to set a "Basic charge" that is "fair." After that:
A conservation charge is imposed for increments of water use in excess of the basic use allocation. The conservation charge for the increments shall, in the aggregate, provide revenue not to exceed conservation measure costs* and overuse costs**. The increments may be fixed or may be determined on a percentage or other basis, provided that the conservation charge for the highest-price increment is at least three times the basic charge.Although "three times" the basic charge is a good minimum, they cannot be set higher than costs. I would set conservation charges much higher than costs and rebate excess revenue to water misers; see here.
The other thing that's nice in this bill (current text -- not approved!) is that "Factors used to determine the basic use allocation may include, but are not limited to, the number of occupants, the type or classification of use, the size of lot or irrigated area, and the local climate data for the billing period." The most aggressive (and fair) allocation would be based on the number of people. Type of use favors politically-powerful groups; lot size rewards golf course-sized lots; historic use rewards wasters; local climate rewards people for living in the desert (unless desert people are allotted less water!)
Bottom Line: This bill is much better than I thought it was. Differential prices are necessary for water conservation, and this is a vital first step. Let's hope that it passes and utilities implement steep price schedules that set a per capita base charge and steep prices for water wasters.
And then let's get some water markets.
* "Conservation measure costs" means expenses incurred for water conservation measures employed by the public entity to reduce the wasteful or unreasonable use of water, and may include conservation best management practices, conservation education, irrigation controls and other conservation devices, water system retrofitting for production and use of alternative water supplies including recycled water, energy costs related to water use, and securing dry-year supply arrangements.
** "Overuse costs" means costs incurred as a result of the wasteful or unreasonable use of water, and may include preventing, controlling, or treating the runoff of water wasted by irrigation and other outdoor uses, and procuring water supplies to satisfy increments of water use in excess of the basic use allocations for the customers of the public entity.