Good News, for Once, on Water

Kevin Drum links this:

The city of Palmdale is running out of water, and as a result prices are going up.  Way up:

"My bill went from $12.80 to $185," [Tracey] Summerford, a Neighborhood Watch captain, told the water board.

"My water bill went from $139 to $468," Sanchez said at that meeting. Since then Sanchez received another monthly bill, one for $324. Together that meant she owed the water district $792, plus a prior balance that brought her total to $924. "That's my two car payments," said Sanchez, who moved into her home in November....I feel discouraged. I feel like we should have stayed in Santa Clarita and lived in our apartment."

I wrote in the comments:

This is really good news. For years California has claimed to have water shortages, but municipal water prices never reflected that shortage. Politicians would prefer to use command and control allocation and rationing powers than just let price do its work.

It is really good to see some California communities price water in line with its scarcity. Under-pricing water has always provided an implicit subsidy for building and farming in certain areas. I wish all California water would be priced on the basis of supply/demand clearing rather than political patronage.

By the way, the author later calls Santa Clarita "the city."  That is pretty hilarious to anyone who has been there.  Santa Clarita sure looks like the burbs every time I have been there.

  • DKH

    Market pricing of water may be a good solution, but this price change sounds (I can't access the original story) like it is oddly discontinuous. A price increase of more than 1000%? Such things should be phased in. It's also unclear whether the price change was publicized and transparent.

  • Spartan79

    This may be "market pricing", but the increases are coming at at time when southern California water control boards are facing incredible public outrage due to some unconscionable pension spiking and pay increase issues:

    http://www.ocregister.com/articles/pension-met-plan-2567612-public-increase

  • Doug

    I bet the city of Palmdale doesn't pay those rates. Anyone want to wager that the front of their City Hall has a nice green lawn, too?

  • Larry Sheldon

    Whe last I spent any time in the area, Santa Clarita was called names like "San Francisquito Canyon (which has it own interesting water history), Mint Canyon, Soladad Canyon, Solamint Store, Supervisor Frank G. Bonelli's pig ranch, Bonelli race track, and other.

    Parts of the year there was plenty of water.

  • Michael

    It could be the high cost of saving the smelt minnow. Taxes won't be coming from farmers this year.

  • Bart Hall (Kansas, USA)

    Water subsidies for California agriculture are an immense issue, or at least ought to be. You can take an acre of irrigated alfalfa ground and put houses on it at 12 per acre, letting them wash cars and water lawns all they want. Water consumption will drop by about half. It would be far cheaper to pay alfalfa farmers the putative profit on their operations and cut off all water than it is to water their HAY.

    The largest cotton grower in America cultivates about 150,000 acres of the stuff in California. Given the five acre-feet or so of water per acre he needs to bring in that crop, his indirect subsidy is about $2,200 per acre -- or one-third of a Billion dollars!

    The same factor affects my vegetable operation. Not only do my California competitors have subsidized highways all the way into my market, they receive (again, indirectly) roughly $2,000 per acre in subsidies. That's a competitive disadvantage to me of about $2 per box of lettuce, which more than pays transport costs. "But I can get it cheaper from California" is a buyers' refrain that makes me want to strangle the politicians who continue supporting this bullshit in return for the Californians' votes in favor of myriad cockamamie projects elsewhere.

    When I make a profit ... my taxes go to subsidize my competitors. Ya gotta love it. NOT.

  • mwright

    And Fresno wasn't allowed to have water meters BY LAW, until recently. So the residents have no idea how much water they use/waste and will be much surprised when the meters begin working next year. http://blogs.kqed.org/climatewatch/2009/05/17/californias-water-meter-rebellion-withers/

  • Larry Sheldon

    Been a whole lot of years since I was in Madera, but when I was last there they didn't have meters either--water bill was a function of how many toilets you had.

  • http://herdgadfly.blogspot.com/ gadfly

    It would appear that the issue is much larger and more dire than water usage pricing. This editorial on "California Water Problems For Dummies" paints a picture of a long term problem with no easy or cheap fix. When an aqua-duct system designed to support 17 million people finds 37 million thirsty customers and then a Federal Judge cuts aqueduct flow in half . . . somebody has to move to Phoenix (but not Las Vegas, as I understand the water table problem there.)

    http://tinyurl.com/nt3rys

  • Max

    IF it really is market pricing (and I am not so sure about that), then let the market decide where the future of farming and living lies.

    But I believe this will not last, because politicians will try to ease the burdern on their sheeple and so will instigate a relief of some kind (like putting prices down). So, this will most likely be a short-lived experiment with true water pricing.

    For example, my local water distributor has the highest prices in all the south-west of Germany and we are right aside the Rhine (biggest river in Germany - Donau aside since only a small amount is actually situated in Germany). It is thus that prices are set arbitary by the city council to pay for their employees.... Magnificient scheme...

  • http://www.bewaterwise.com BeWaterWise Rep

    Thanks for this post! Less than 1% of the fresh water on the planet is available for human use and many parts of the world are facing a water shortage, especially in places like Southern California in the US. http://j.mp/8cQyj will show you how far the water reserve levels have declined. You will find a gauge on the site with three-color zones: Blue – good, Yellow - not good and Red – bad. The needle on this gauge is dropping out of the blue zone and heading into the yellow zone.

  • http://dullgeek.blogspot.com dullgeek

    As a fan of market prices, I have a hard time understanding where the market is here. The end consumer is still provided water by a government monopoly, right? So how exactly does the consumer exercise market force when they have no ability to switch providers?

    I don't see the market. I'm sure I'm missing something.

  • DKH

    dullgeek:

    It isn't necessary that multiple suppliers exist in order to have market pricing. Granted, the ability to switch providers only comes when moving, but people do consider a whole package of things when making a decision on where to move. So there may be one monopoly supplier in a given area that sets the price (theoretically a profit maximizing price, but in the water industry, maybe they are going for safe and sustainable usage levels).

    There are many customers, whose power comes from their ability to choose a consumption level, and their ability to choose whether to live in the area.

  • Heretic

    Interesting. Living in the Northeast in a Town with public wells, I have exactly the opposite problem. The water is overpriced on purpose to encourage "conservation", and the flush water department fund (which is supposed to be used only for water delivery purposes) is constantly being raided for dubious purposes, including anything the Town needs that can even remotely be linked to water. It's essentially a backdoor tax.
    They are using it to fund "science" programs in the public schools!
    The 'conservation' pricing is really a farce, since nearly all of the water we use goes right back into the aquifer it came from.
    This year we have like 4x normal rainfall, so in an ideal market model, the prices would fall accordingly. "Congestion" pricing in a dry Summer would be fine with me if it cut both ways.

  • Jim Collins

    We have a mix of wells and pipe systems where I live. We have had the same rainfall that Heretic referrs to. Several years ago our local governments started mandatory conservation based off of what they call "aquifer measurement". Any time there is a 5% drop in levels this goes into effect. When it started the level had gone from 40 to 30(don't ask me what the measurement unit is). For years the measurement was right around 40 and they thought that there might be a shortage with the sudden drop. Since then the measurement has gone up to around 70 and stayed there, but, the law is still in effect. There is a list of things that you can't do, water lawns, fill swimming pools, wash your car and let your kids play with the hose are a few. However, you can go to a car wash, buy swimming pools water from vendors or your local fire department and the municipal and commercial water parks are open.

  • HTRN

    Correct me if I'm wrong, but didn't somewhere in CA start using Desalinization plants to provide water to it's citizens?

    Edit: It's apparently San Diego County, and it's not running yet - apparently it's going to cost nearly 2 billion, and provide over a 150 million gallons a day. Supposedly it's going to produce water at a cost of $2.76/1k gallons.

  • epobirs

    By my reading, the city referenced is Palmdale, which is nearly all suburban residential, too. But for the record, Santa Clarita is most certainly a city in terms of its legal status. The word city doesn't automatically denote high-rises, which a resident of Arizona show know fully well. I'm somewhat surprised at this snobbery.