22 Sep 2009

IID's $35 Million "Mistake"

In February this year, I visited Imperial Valley and the Imperial Irrigation District (IID) to learn more about a place that uses about 3 million acre feet (maf) of the State's 40 maf water supply.

During my water chat with Joe Tagg (a farmer), I was intrigued to hear his prediction of how IID's heavy-handed attempts to reduce water use (in an effort to meet contractual obligations) would affect overall use:*
Note: I forgot to highlight Joe Tagg's contention that IID's "mismanagement" of water is actually a ploy to "create" excesses that can be sent downstream to a junior water rights holder (The Metropolitan Water District of SoCal). How does this idea work? Since farmers MUST use less than 5.25 af/acre, they will be conservative in choosing what crops to grow. Given that they undershoot 5.25 af/ac on average, there will be "surplus" water. What's his evidence? Someone at IID told him they were counting on 200 thousand acre feet (taf) of surplus.**
This story basically confirms that prediction. Guess how much "excess" water IID is sending to MWD (free of charge)? 180 taf.

What's IID's explanation for the overage?
IID spokesman Kevin Kelley said it's a result of the depressed farming economy, particularly for forage crops such as alfalfa that is fed to cattle.

“It's a function of natural market forces,” he said. “If farm commodity prices were high, those fields would be planted and water would be ordered for them.”
That explanation is pretty empty when you know that IID had planned for a 200 taf surplus.

I have lots of questions about the connection between IID's regulations and the benefit to MWD, and I'd love to have a complete record of correspondence between these two agencies. Given that MWD values "extra" water at $195/af, this 180,000 af "whoops" is worth about $35 million -- hardly chump change.

Of course, IID would not have "lost" that 180 taf if it allocated its water with markets and prices instead of blunt and inaccurate regulation. Markets would have allowed IID to use every drop -- or sell the excess to MWD for $35 million more than the $zero it got.

Bottom Line: IID's mismanagement of water serves neither its citizens, nor its farmers, nor the citizens of Southern California.*** IID needs to use transparent price and market mechanisms to allocate its water. Anything less is somewhere between inept and criminal.
* IID manages the water for its farmers, who are fighting IID on multiple levels. Read this and this.
** One acre foot (326,000 gallons) is enough water for 4-10 people (depending on consumption) for a year. Thus 200 taf would supply 800,000 to 2 million Californians for a year.
*** The more time IID spends fighting its farmers, the less time it spends figuring out how to allocate its water efficiently. Citizens would be served if water went to highest and best use (and the money for it went to those who owned the rights to the water).