December 2008, Vol. 20, No.12

Water You Can Bank On

news.jpg We’ve all heard of stashing away money for a rainy day. But Yucaipa Valley Water District in California is joining a growing number of water utilities that are now stashing away water for a “nonrainy day.” It’s an approach known as water banking, and it’s becoming increasingly common in the western United States and elsewhere thanks to less predictable hydrological cycles,

according to Mary Kelly, vice president for rivers and deltas at the Environmental Defense Fund (New York). “There have always been droughts in the past,” she said. “But because of climate change, we’re now bumping up the extremes in wet and dry years. People are using water banking to reduce risk and hedge a little against the years of drought.”

A water bank functions much the same way as a conventional bank, according to Kelly. “Water districts purchase and store water in the wet years — and then they take it out in the dry years when they need it,” she said.

In many cases, districts are recharging an underlying aquifer, rather than storing it in a surface reservoir. “Groundwater storage is a better strategy than surface water storage,” Kelly said. “Groundwater doesn’t evaporate like surface water. Surface reservoirs are also more expensive to build, and they can impact the flow in local rivers.”

The water banking concept isn’t new. In fact, some utilities have used it for years to help control costs.

“Water banking became popular in Florida and the mid-Atlantic states some years ago as a way to optimize the existing water treatment infrastructure,” said Dave Dorrance, vice president at Western Development and Storage (Los Angeles). “Instead of spending $20 million to enlarge its water treatment facilities to accommodate high summer demand, a utility could treat its plentiful water supply during the winter season, inject it into an aquifer, and store it there until it was needed to meet summer demand.”

The water banking concept has since moved to drought-plagued western states, Dorrance said. “People talk about California being short of water,” he said. “But if you look at the water balance over the years, California has all the water it needs. It’s just in the wrong place and at the wrong time.”

“Each spring, melted snow from the mountains flows untouched into the ocean,” Dorrance explained. “But then in the summer — when demand is high — the supply isn’t there. Water banking is a way to [maximize] use of the available water year-round.”

It’s also a long-term solution to help prevent the water table from running dry.


Yucaipa Valley Opens an Account
“We’ve been in overdraft for the past 100 years,” said Joseph Zoba, general manager of Yucaipa Valley Water District, which adopted a water banking strategy in August as part of its long-term water conservation and sustainability policies. 

 “Water banking will not only help us protect our customers from future water shortages, but it also gives us the ability to replenish our local groundwater basins, which have been drawn down through many years of pumping beyond natural recharge rates,” Zoba said.

The district, once largely agricultural, today provides water and wastewater treatment services to about 50,000 customers in a 130-km (50-mi2) service area west of Los Angeles that includes the cities of Yucaipa and Calimesa.

The district’s water banking program has two parts that will be phased in during the next year. The first part, which takes effect Jan. 1, authorizes the district to purchase each month an amount of water equivalent to 15% of its current monthly consumption from the California State Water Project. The State Water Project is a state-built water conveyance system that supplies water for 23 million Californians and 306,000 ha (755,000 ac) of irrigated farmland.

The extra water the district purchases will be stored in a local groundwater basin where there is currently more than 247 million m3 (200,000 ac-ft) of storage space available.

“If we use 1000 ac-ft [1.2 million m3] of water, then we’re going to set aside 150 ac-ft [185,000 m3],” Zoba explained. “It’s that simple.” Barring any drought years, the district will have amassed a year’s worth of water consumption after 6 years of water banking.

To pay for this additional water, customers will be assessed a charge on their monthly bills. “It won’t be 15% of their entire bill but 15% of the cost they pay to import water,” Zoba explained. For a typical customer, this amounts to about $2.50 a month.


The Prepayment Plan for New Homes
This “15% solution” is designed to protect and cover the region’s current water usage needs. A second part of the program kicks in later next year that tackles an even trickier issue: new development.

“New development poses a threat to our water conservation and sustainability policies,” Zoba said. “If there isn’t enough water for our existing customer base, how can we justify adding new homes to the community?”

The district answered this question in the second half of its water banking policy. Effective July 1, developers and new property owners will be required to “prepay” for a new home’s water supply, and they’ll have two options for doing so.

With the first option, anyone planning to build will be required to purchase at least 8600 m3 (7 ac-ft) of water up front, currently priced between $1000 and $1200. “That [amount] represents roughly 40% of the water they’ll use over a 20-year period,” Zoba explained. “We’re basically asking people to prepay for their potable water supply.”

Those who choose this approach, however, do so at a risk. If the district experiences water restrictions that mandate a 20% reduction in water use, the construction of these homes may be delayed or prohibited.

To minimize their risk, property owners and developers can opt for “Crystal Status,” which requires them to purchase 19,400 m3 (15.7 ac-ft) of water up front. Crystal Status gives a developer the right to proceed with a development project even when everyone is asked to reduce water consumption by 20%, Zoba said.

These developers, however, still could face some restrictions when water cutbacks of up to 35% are mandated. No development would be allowed when the district is experiencing mandatory cutbacks of 50%.

Zoba said the district plans to supplement its water banking strategy with new recycled-water delivery systems that will allow locally used water to be recycled and reused for outdoor landscaping of new commercial and residential developments.

This program requires all homes in new residential developments, as well as in-fill housing, to be dual-plumbed to accommodate both potable and recycled water. While adding extra up-front costs to the owner, dual plumbing will pay for itself over time, according to Zoba.

“Approximately 60% of our water is used for irrigation purposes that can be accommodated with recycled water,” Zoba said. “Only 40% — the potable water portion — is used inside the home.” With the new program, homeowners will pay a lower rate for the recycled water they use because it doesn’t require as much treatment.

Dual plumbing will be required even in locations where recycled water may not be available for some time. “Initially, we’ll supply potable water to both lines, but meter them separately,” Zoba said. “That will enable us to more precisely track how much of each type of water is used and for what purpose.”

“With all of our sustainable development initiatives, we’re trying to build smarter — to make sure we’re meeting the needs of our current customers ... but also thinking about what’s best for our future.”


When Drought Happens
For Yucaipa Valley, water banking certainly seems like a smart solution. But what if every water district had such a program? Might water banking be just a polite term for hoarding?

Not in Zoba’s opinion. “If our state water contractor can’t meet our drinking water demands, then we’d have to cut back on the program,” he said.

If the state’s available water supply diminishes, in fact, the district has developed a set of priorities for distributing its allocation. Highest on the list, according to Zoba, are current customers. The second allocation goes toward groundwater adjudication — replenishing any groundwater that has previously been extracted to meet demand.

Only when these two priorities are met does the district make its 15% deposit in the water bank. The fourth and final allocation is the deposit made on behalf of new development.

It’s this set of priorities, Zoba said, that separates his district from others in the state that now practice water banking.

There are many communities in the state that bank water,” Zoba said. “But I’m not sure anyone else is tying it to new growth.”

“Some communities are broadcasting to consumers that they must save water,” Zoba said. “Yet they continue to build and build until they can’t sustain their population.”

“We believe we have an obligation to our current customers not to overbuild, Zoba said. “So we’ve developed a program that finally links development planning to the available water supply. If everyone adopted a similar approach, it would regulate growth.”


The Public Reacts
It took the district about 10 months devoted to workshops and public meetings to get public buy-in on the program, Zoba said. During this time, the program evolved, with feedback from the local construction industry helping to shape the current policy.

“Under the original proposal, all new development would have been required to achieve Crystal Status,” Zoba explained. “But developers worried that the process to order and deliver a home’s water could add 2 years to the construction process.”

Developers liked the program in its final form because it allows them to secure the future of their development at today’s dollar, Zoba said.

“Overall, it’s been widely accepted because there is the sense that both new development and existing customers are all carrying their fair share,” Zoba said.

Not all water banks have been so warmly embraced by the public, according to Dorrance. “Back in the late 1990s, some companies, including Enron, created the Madera Water Bank near Fresno, Calif., as a profit-making exercise,” he said. “But the local residents feared the water to be imported was of lower quality than the native groundwater, among other things.”

According to news reports at the time, there were also concerns that the water pumped into the ground would not stay there but could flow underground to nearby low-lying areas, raising the water table and destroying farmland. Facing its own problems, Enron eventually abandoned the project and sold the land.

The lesson, according to Dorrance, is one of local control. “On these projects, you’re going in and messing with the local hydrology,” he said. “The local population needs to have their say on how it is formulated and operated.”

Zoba would agree that putting the community’s interests first is a key to success. “At the end of the day, our goal is be a drought-tolerant, sustainable community,” he said. “A water bank is a way to help us get there.”


Mary Bufe, WE&T