Wait so what actually is the retail price of water in California?

Amidst the California’s first ever statewide water rationing and an internet culture of drought shaming, rich Californian’s are striking back against rationing and asking to be able to pay for as much water as they want. From a much shared article on the WaPo:

“People “should not be forced to live on property with brown lawns, golf on brown courses or apologize for wanting their gardens to be beautiful,” Yuhas fumed recently on social media.”

My personal philosophy is that rich Californians should be free to buy the water they want, but that excessive and unreasonable use should require them to pay through the nose. One challenge to proper water pricing: California has over 400 major water retailers subject to the Governor’s restrictions, each charging a different price for water.

For decades, water managers have relied on surveys of retail water utilities to understand the “average” water bill across California. Young analysts like yours truly are sent into the wild to gather water rates from the interwebs and via the telephone. These figures are simplified into summary tables like the following from a survey I did of ~200 utilities in 2005.

The flaw with simplistic average water rate reports

A factor of ~2x from the smallest to the largest bill at 20 ccf.[1] Note this sort of survey has been updated since then but the same basic methodology holds.

Of course, the caveat “results do not reflect typical rates” should not be taken lightly and the common sense fact that not all Californian’s use the same amount of water has big implications. In the conservation rebate impact evaluation in South Orange County I’m currently conducting, we’re seeing retail bills with usage over 30x 20 ccf and over 5% of household with usage regularly twice that.

The implications of this become more apparent when you look at a few cost curves of retail water suppliers in California.

Each line shows the cumulative amount a household would pay for increasing amounts of water. Note 10x variation from the smallest to largest bill at 50 ccf.

The actual price Californian’s pay for residential water use varies much more dramatically than reported utility level 20 ccf “average” bills, which brings us back to the question about freedom to pay raised by the rich homeowners in the WaPo article.

Do all Californians actually pay a reasonable price for water?

Californians using over 40 ccf pay anything from $11.91 per each additional ccf of water in Scotts Valley Water District in Santa Cruz to $6 per each additional ccf in Inglewood to $1.04 per each additional ccf of water in Sacramento.

That means a high water user with 100 ccf bill in poor Inglewood pays well over $400 more for the same amount of water as a household in rich Suburban Sacramento. That same high water user would pay over $1100 more in Santa Cruz, which receives no water for the California Delta, than Sacramento.

This balkanized pricing regime is part of why the Economist criticized California water management in April [2]:

“California cannot solve its water crisis without pricing the stuff properly and dealing with those who consume the most. ”

The Economist notes that urban water use, unlike agricultural groundwater, is carefully metered. The challenge though is that actual metered water use and with that actual water bills aren’t actually shared across utilities. So we’re left with simplified surveys to get at the average price of water rather than what really should be a Google search.

Of course, some folks recognize that California as birthplace of the digital revolution can do better at acquiring pricing information than hand entering values.[3] In fact, that’s exactly what our SCUBA data collaborative is working to deliver: reliable, robust measures of actual metered water usage in California so that we don’t have to take a survey to guesstimate what the average price of water is.

Instead in the near future we’ll just look up the actual average price of California urban water.

Cheers,

Patrick

[1] Note this is averaging by Metropolitan member agency (groups of retails utilities) which diminishes variation.

[2] The Economist focuses on agricultural vs. urban comparisons but the general point on proper pricing holds albeit less dramatically within urban water use as well.

[3] In addition to collecting urban water usage data in a centralized database, just have a law saying all water price data must be in a common standardized machine readable format like Open 311, set up a few scripts to pull that info into the centralized database and boom done.