Law360

El Nino is upon California. Yet, despite the ample rain and snow expected this winter, on Feb. 2, 2016, the State Water Resources Control Board extended its emergency conservation regulation. The extended emergency regulation leaves the existing emergency drought regulation primarily intact, but includes several important opportunities for urban water suppliers to achieve reductions in the conservation mandates previously applicable to them.

Emergency Drought Regulation Background

On July 15, 2014, following California Gov. Jerry Brown’s proclamation declaring a drought state of emergency in California and his executive order regarding the severe drought conditions and urging Californians to conserve, the water board adopted an emergency regulation to support water conservation, Resolution No. 2014-0038. The resolution added regulations that, among other things, set forth four prohibited uses of potable water and monthly reporting requirements for urban water suppliers.

The drought continued in 2015 and, on April 1, 2015, Brown issued an executive order directing the water board to impose restrictions on urban water suppliers to achieve a statewide 25 percent reduction in potable urban water usage through February 2016.

Following issuance of that order, the water board adopted Resolution No. 2015-0032, which adopted a more stringent emergency regulation intended to achieve the mandated 25 percent statewide reduction in potable urban water use between June 2015 and February 2016. To reach that statewide goal, the water board’s emergency regulation imposed conservation tiers for each urban water supplier in the state, ranging from 4 percent to 36 percent based on per capita water use. The new Extended Emergency Regulation replaces the earlier Emergency Regulation, which was set to expire on Feb. 13, 2016.

Changes to the Emergency Drought Regulation

On Nov. 13, 2015, Brown issued another executive order, calling for an extension of the emergency regulation until Oct. 31, 2016, should drought conditions persist through January 2016. Subsequently, the water board held workshops and solicited input from stakeholders regarding modifications that should be made to the emergency regulation based on factors including temperature, growth and use of drought-resilient supplies. The newly adopted extended emergency regulation makes the following changes to the existing conservation tiers.

  • Climate Adjustment: The proposed regulation permits a climate adjustment, based on a water service area’s evapotranspiration rate relative to a statewide average that would reduce the conservation requirement by up to 4 percentage points for urban water suppliers located in the warmest portions of California.
  • Growth Adjustment: The proposed regulation provides a means for urban water suppliers to account for water-efficient growth since 2013. The adjustment decreases the conservation requirement percentage based on the number of new permanent residents added since 2013, the area of new residential landscaped area, and the number of new commercial, industrial and institutional connections added since 2013.
  • Drought-Resilient Sources of Supply: The proposed regulation provides a 4 to 8 percentage point reduction to the conservation requirement for urban water suppliers that are using new, local drought-resilient water supplies. This credit would be equal to the actual percentage of total potable water production stemming from the new source. The urban water supplier must certify that the new supply does not reduce the water available to another legal user of water or the environment and that the water supplier developed the source after 2013.

Importantly, the proposed emergency regulation imposes a cap on credits from all of the above factors of 8 percentage points and provides that an urban water supplier may not drop below the eight percent conservation tier because of such credits.

Also of interest are the changes that do not appear in the proposed regulation, which include:

  • Nonpotable Recycled Water Use Credit: The proposed regulation does not provide an additional credit for nonpotable recycled water use. In recommending against such a credit, water board staff reasoned that suppliers already have realized the benefit of providing recycled water because such water was not counted as part of their total 2013 production to which a conservation mandate was applied.
  • Groundwater Credits: The proposed regulations do not provide credits for groundwater management or augmentation. Water board staff recommended against such credits, stating that the effect of such credits is not well-defined and they would be inconsistent with the state’s goal to conserve both surface and groundwater supplies. Staff asserted that groundwater augmentation with surface water is materially different from the creation of a new drought-resilient source of water supply, because groundwater augmentation uses water that was already part of existing freshwater resources.
  • Regional Compliance Approach: The proposed regulations do not provide for a regional compliance approach, apparently based on water board staff’s contention that such an approach would impede enforcement efforts.
  • Regions without Drought Conditions: The proposed regulations do not provide an exception for regions without drought conditions (ironically, the southeast desert area).

Representatives of water suppliers throughout the state provided hours of testimony to the water board on Feb. 2, calling for these changes and more, but the board ultimately limited its action to more modest adjustments.

State Impact

There has been some concern that the extended emergency regulation does not do enough to recognize the value of investments in drought-resilient water supplies and diverse water supply portfolio management. As California enters its second year of mandatory usage restrictions, the water board has to be mindful of the incentives (and disincentives) it may create. Many water suppliers hoped that the water board would take this opportunity to deal with inequities that could not be tackled in the initial rush to get the emergency regulation established next year. Although the extended emergency regulation provides for some adjustments to conservation mandates, for many water suppliers the expected level of water use reduction will remain unchanged.

According to the most recent conservation data from the water board, total potable water use has been reduced by 25.5 percent through December 2015, as compared to the same period in 2013. It will be increasingly difficult to maintain the same level of conservation into 2016, however, given the sacrifices necessary to achieve it. Particularly if the wet weather continues, it will be a significant challenge to retain the same level of customer commitment to conservation efforts. In light of this, the extended emergency regulation is best viewed as an interim step. The water board chose not to make major changes to the emergency regulation at this time, and instead committed to revisit the regulation in the spring, when more data is available about the effect of the recently wetter weather. In a press release, Felicia Marcus, chair of the State Water Resources Control Board, stated, “If we continue to receive a lot of rain and snow in February and March, we may scale back the conservation requirements further, drop them, or move to another approach.”

California will need a lot more rain and snow to bring back reservoirs to pre-drought conditions. It will take more than a year to restore groundwater levels to pre-drought elevations. While water suppliers have received their marching orders for the time being, we should expect the controversy over mandatory usage restrictions to resume in April 2016 when more complete information about the water year will be available.