25 Feb 2009

San Diego's Water Purchases

San Diego is looking north for water this year, working out a number of smaller option agreements with Sacramento Valley Districts. I looked into one 10,000 AF transfer with South Feather Water and Power to get a handle on numbers for this year.

San Diego is paying $10 per acre-foot for the option to buy water at $240 per acre-foot from South Feather's reservoir. They are then on the hook for a portion (up to $50) of lost power generation if PG&E is negatively impacted. This water must make it though the delta, and so San Diego assumes a 20% carriage loss, on top of an additional 3% SWP loss to get the water over the Tehachapis. Forgetting the PG&E penalty, the price per delivered acre-foot is near $325.

Because San Diego doesn't own the delivery infrastructure, it must pay MWD to wheel the water from the delta to its service area. MWD charges a lot. According to Dan Hentschke, MWD currently charges around $348 per acre-foot, $180 of which is the estimate for the power component. This pushes up the total price to $673, near the top of what MWD charges its member agencies for treated water.

Bottom Line: There is a more efficient way to deal with scarcity, but this transfer indicates that a more efficient way is still far away.