07 July 2010

Water managers and gold-plated fantasies

Irvine Ranch water managers plan to spend about $20 million on a water bank. That may be chump change when you have a $billion in cash lying around, but it hardly seems a good use of money. IRWD has won lots of industry awards for its use of very complicated water budgets (a high form of engineering-porn), but they have not done a lot to limit demand by heavy users with big lots. Now, it seems that IRWD prefers to go get more water, to increase imports from elsewhere, instead of reducing demand. That may make sense in the short run, when people prefer to keep using more, but it will not in the long run, when everyone tries to do the same thing. IRWD may be safe in the long run, since the water bank will secure more supplies ahead of everyone else, but will they be able to justify 2-3x the consumption of their neighbors? Doesn't sound like IRWD cares about being a good neighbor or investing time (not even money!) into regional water sustainability.

Speaking of regional games, I read that SDCWA may be taking over the contracts -- or even the whole operation -- at Poseidon's desalination plant. This may happen because SDCWA is suing MWD and MWD may turn around and refuse to subsidize the desalination. Without subsidies, the desal plant make no sense. Or does it? Apparently SDCWA is interested in taking it over, perhaps to get a source of "new water" that is NOT from MWD. SDCWA is obsessed by "water security" issues the same way that Singapore is, and they are willing to pay 2-3x the price of MWD water to get their own water. (I've lost count of how much money SDCWA has thrown at IID for its purchase of IID ag water...)

So Poseidon may be able to make some money after all, not because desalination is environmentally friendly, cheap (see this and this), or needed, but because SDCWA is paranoid and willing to spend ratepayers money on new supply instead of fixing its relationship with MWD.* The desal plant will provide about 8 percent of SDCWA's water needs, btw.

Oh, and don't forget how these managers are going to bury the costs of their boondoggle projects. They will use the old average cost trick. Here's how it works:
  1. Say that your current water supply costs $3/unit and the new supply costs $5/unit.
  2. The new supply will provide 5 percent of your total.
  3. Instead of charging the most water-greedy customers (the last 5 percent) $5/unit, you charge ALL customers (0.95*$3.00 + 0.05 * $5.00) $3.10/unit.
  4. Heavy (often wealthy) water customers are happy to pay a little more, everyone else doesn't notice (and what would they do if they did? We have a SHORTAGE you know!). Manager keep their jobs -- without asking people to use less. Demand continues to grow -- making the NEXT supply crisis even worse.
Bottom Line: Water managers find solutions to water problems, but their solutions sometimes serve the managers instead of their customers.

* Not that I put much hope in MWD wanting to fix that relationship

1 comment:

  1. DW emails: "Silly rabbit, tiered water rates are for small residential customers not big industrial or commercial ones."

    ReplyDelete

Spammers, don't bother. I delete spam.