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Funding Scenario Analysis

California Department of Water Resources (DWR) | December 13th, 2018

Summary

This document supports information contained in Chapter 4 of the California Water Plan Update 2018. The purpose of this document is to provide a description of the fundin

This document supports information contained in Chapter 4 of the California Water Plan Update 2018. The purpose of this document is to provide a description of the funding analysis as well as the scenarios evaluated by the funding analysis. This supporting document provides the analysis called out for in the California Water Plan Update 2013 Finance Planning Framework Component 8, which recommended the development of a decision support system (DSS) to provide guidance to the State on tradeoffs in a funding plan. To respond to this recommendation, this supporting documentation describes a funding tool used in the funding analysis and how scenarios were used in the tool to evaluate tradeoffs of different approaches to funding the recommended actions described in Chapter 3 of the California Water Plan Update 2018. The funding analysis used information about historical expenditures and funding need developed in the Historical Expenditures and Current and Future Funding Needs supporting document and information about existing and novel funding mechanisms developed in the Funding Mechanism Inventory and Evaluation supporting document.

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Funding Water in Times of Financial Uncertainty: The Case for a Public Goods Charge in California

Stanford University | January 15th, 2015

Summary

Funding for water-related public purpose projects has become increasingly scarce in California. Utilities are facing new challenges that require additional capital while

Funding for water-related public purpose projects has become increasingly scarce in California. Utilities are facing new challenges that require additional capital while the state’s legal system has restricted the ability of local governments to raise funds. This fiscal landscape requires the water sector to find new ways to finance water-related public interest projects, including conservation and efficiency programs, monitoring and evaluation, and infrastructure maintenance and modernization. California must also generate supplementary funds for new water technology research, development, and dissemination if the state is to continue to grow despite dwindling water supplies. In recent decades, California has relied heavily on general obligation (GO) bonds to finance a variety of water-related projects. GO bonds, however, are unreliable funding mechanisms as they require voter approval if they survive the legislative process, and they can be costly in the long run as they are repaid with interest. Additionally, GO bonds violate the beneficiary-pays principle as the entire state repays a debt that benefits taxpayers in certain regions more than others. This research paper looks at a supplemental funding mechanism, a Public Goods Charge (PGC), as an additional way for California to provide for water investment in the future. In a PGC scheme, ratepayers are charged a small, usage-related fee, and the funds are subsequently allocated to public interest projects at the local, utility, state, and broader scales. This method was used to fund electricity public purpose programs in California from 1998-2011, resulting in over $5.8 billion collected by the state’s three main Investor Owned Utilities (IOUs), with additional funds collected by local Publicly Owned Utilities (POUs), for energy innovation over 14 years. Utilities and the state as a whole benefitted economically and environmentally from the increased funding for energy efficiency, renewables, and research and development. The electricity PGC helped to transform California’s energy landscape into one that includes more modern and sustainable infrastructure systems. Significant energy savings were also achieved during the PGC era.

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Handbook for Assessing Value of State Flood Management Investments

California Department of Water Resources (DWR) | June 8th, 2014

Summary

Millions of people and over half a trillion dollars in assets are exposed to flood risk in California (DWR 2013a). This remains the case even as State, federal, and local

Millions of people and over half a trillion dollars in assets are exposed to flood risk in California (DWR 2013a). This remains the case even as State, federal, and local flood management agencies have worked for decades to reduce the risk and consequences of flooding in the State. The people of California have shown that they understand the increasing flood risk due to population growth, environmental concerns, climate change, and land use practices, and they are willing to invest in flood risk management projects. This requires the public agencies responsible for California’s flood risk management to demonstrate the value of those investments both before and after they are implemented. This Handbook for Assessing Value of State Flood Management Investments (HAV) supports that effort. The California Department of Water Resources (DWR) has identified foundational goals that shape the State’s water management investment strategy. Those goals are: Improving public safety Fostering environmental stewardship Supporting economic stability

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Historical Expenditures and Current and Future Funding Needs

California Department of Water Resources (DWR) | December 13th, 2018

Summary

This document supports information contained in the California Water Plan Update 2018. The purpose of this document is to provide a description of California’s water re

This document supports information contained in the California Water Plan Update 2018. The purpose of this document is to provide a description of California’s water resources management historical expenditures and the existing funding needs in the State. The historical expenditure data includes capital and ongoing public agencies’ (State, local, and Federal agencies) historical expenditures. Historical expenditure data is organized by management action type and water sectors. In this document, capital management actions include infrastructure development, repair, replacement or rehabilitation. Ongoing actions include planning, data management, tracking and reporting, operations, and maintenance. Historical expenditure data is provided for State fiscal year 2005/2006 (2006) to 2014/2015 (2015). This timeframe was selected due to data availability at the local, State, and Federal levels. This document also provides information on the accrued interest on debt from State general obligation (GO) bonds. This document provides information pertaining to the projected existing water management funding needs and existing water management funding gap. Projected water management funding need was estimated from planned and proposed management actions collected from State, local, and Federal agencies. Historical expenditure and funding need information is used in the California Water Plan Update 2018 to provide context and data for inclusion into the funding analysis, described in the Funding Scenario Analysis supporting document.

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Implementing a Public Goods Charge for Water

California Public Utilities Commission (CPUC) | July 12th, 2010

Summary

Our client asked for recommendations on how to implement a public goods charge (PGC) on water, as per the “Water Energy” section of the Assembly Bill 32 (AB 32) Scopi

Our client asked for recommendations on how to implement a public goods charge (PGC) on water, as per the “Water Energy” section of the Assembly Bill 32 (AB 32) Scoping Plan. Before considering “how,” we considered whether a public goods charge for water is the right tool. The problem we wanted to address is the negative externalities of high water consumption, including greenhouse gas emissions from the energy used to pump, transport, treat, and heat water. We gave serious consideration to two alternate strategies but ultimately decided the public goods charge for water is the best tool. We recommend a public goods charge for water because: A public goods charge for water creates a price signal for water conservation. A public goods charge for water would provide a stable, sustainable funding mechanism to support the full list of conservation and efficiency activities specified in Assembly Bill 32. The dual energy and water conservation programs specified in AB 32, which could not be fully funded through the other mechanisms we considered, will be effective to both mitigate and adapt to climate change. Our proposed implementation strategy will help institutionalize regional water agencies, which are necessary for the state’s long?term water?planning effectiveness. We then make specific recommendations about the design of the public goods charge: We recommend passing state legislation requiring all water providers to assess volumetric surcharges on each water bill where metered, or by alternate means in the short?term for areas not metered. We recommend that the funds be managed by regional joint power authorities to implement Integrated Regional Water Management Plans (IRWMPs), which must institutionalize their operating structure before this can be put in place. This will provide the necessary regional organization for effective project choices, and will reduce the number of water agencies that need oversight from thousands to 50. We recommend that the Department of Water Resources (DWR), which already has jurisdiction over the IRWMPS, provide direction and oversight to ensure that specified state goals are met and that funds are well?managed, with assistance from the WETCAT members. We recommend that the fees initially be set to raise $680 Million per year. That level of funding can be used to meet the water supply targets of Senate Bill X7?7, and to exceed the greenhouse gas emissions goals of Assembly Bill 32. We recommend that the legislation be structured with maximum flexibility to allow for future rate changes.

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Implementing California Flood Legislation into Local Land Use Planning: A Handbook for Local Communities

California Department of Water Resources (DWR) | October 1st, 2010

Summary

The potential for flooding is a significant risk for many localities in California. Flood events can cause substantial economic, social, and environmental damage. In addi

The potential for flooding is a significant risk for many localities in California. Flood events can cause substantial economic, social, and environmental damage. In addition, many flood management practices can be costly and have considerable effects on the environment. One of the most effective ways to reduce the vulnerability to potential flooding is through careful land use planning that is fully informed by and reflective of applicable flood information and flood management practices. This Handbook supports the Department of Water Resources (DWR) FloodSAFE California initiative, which is a statewide initiative to improve public safety through an integrated approach to flood management. Several bills were signed by Governor Schwarzenegger in 2007 adding to and amending State flood and land use management laws. These new laws are intended to improve local land use and other planning decisions by strengthening the link between land use and flood management. The laws contain requirements and considerations that outline a comprehensive approach to improving flood management at the State and local levels. This Handbook includes the 2007 California flood risk management legislation affecting cities’ and counties’ responsibilities related to local planning requirements such as general plans, zoning ordinances, development agreements, tentative maps, and other actions. It does not address all flood management related legislation passed in 2007. For a complete summary of California flood legislation passed in 2007, refer to the 2007 California Flood Legislation Summary and Companion Reference issued by DWR at http://www.water.ca.gov/legislation/2007-summary. pdf and http://www.water.ca.gov/legislation/2007-reference.pdf.

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Innovative Ideas to Finance Resiliency in the Water Sector

Stanford University | June 3rd, 2019

Summary

Distributed, or decentralized, water systems have the potential to increase the resiliency and flexibility of freshwater supply networks by reducing the load on aging

Distributed, or decentralized, water systems have the potential to increase the resiliency and flexibility of freshwater supply networks by reducing the load on aging infrastructure, eliminating or postponing the need to replace, expand or build centralized systems, decreasing energy requirements for conveyance, and offering alternative solutions if centralized infrastructure fails. Despite these and other potential benefits, financing distributed systems remains a key barrier. To overcome this challenge, Stanford researchers have examined innovative financing models in the electricity sector, which started the transition nearly twenty years ago from a purely centralized system to a hybrid model that includes distributed energy such as wind and solar, to draw applicable lessons for the water sector.

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Key Issues in Seawater Desalination in California: Costs and Financing

Pacific Institute | November 27th, 2012

Summary

Economics – including both the cost of the water produced and the complex financial arrangements needed to develop a project – are key factors that will determine the

Economics – including both the cost of the water produced and the complex financial arrangements needed to develop a project – are key factors that will determine the ultimate success and extent of desalination in California. New research from the Pacific Institute, Key Issues for Seawater Desalination in California: Cost and Financing, assesses desalination costs, financing, and risks associated with desalination projects. The Pacific Institute analysis finds that the cost to produce water from a desalination plant is high but subject to significant variability, with recent estimates for plants proposed in the state ranging from $1,900 to more than $3,000 per acre-foot. “Seawater desalination remains among the most expensive water-supply options available, although the public and decision-makers must exercise caution when comparing costs among different projects,” said Heather Cooley, co-director of the Pacific Institute Water Program and lead author of the report. “In some cases, costs are reported in ways that are not directly comparable. For example, some report the cost of the desalination plant alone, while others include the cost for additional infrastructure needed to integrate the desalination plant into the rest of the water system. Some estimates include costs to finance the project, while others don’t. Even when there is an apples-to-apples comparison, there are a number of site- and project-specific factors that make cost comparisons difficult, such as energy, land, and labor costs and the availability of visible and hidden subsidies.” Key Issues for Seawater Desalination in California: Cost and Financing is part of a series of research reports in progress that identify key outstanding issues that must be addressed before additional proposals for new seawater desalination in California are approved. Other issues addressed include the environmental impacts of seawater desalination, the cost and financing of proposed projects, and energy requirements and their greenhouse gas implications. Our analyses seek to provide communities and decision makers with information needed to make decisions about building desalination plants and to create a more rational and sustainable policy around seawater desalination along the California coast, and elsewhere.

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Los Angeles Basin Study The Future of Stormwater Conservation: Task 6 – Trade-Off Analysis & Opportunities

U.S. Bureau of Reclamation (USBR) | January 5th, 2016

Summary

The Los Angeles Basin Study (LA Basin Study) is a collaborative partnership between the Los Angeles County Flood Control District (LACFCD) and the U.S. Department of the

The Los Angeles Basin Study (LA Basin Study) is a collaborative partnership between the Los Angeles County Flood Control District (LACFCD) and the U.S. Department of the Interior, Bureau of Reclamation (Reclamation). The purpose of the LA Basin Study is to investigate long-range water conservation and flood risk impacts caused by projected changes in climate and population in the Los Angeles region. The LA Basin Study highlights opportunities for potential modifications and changes to both the existing regional stormwater capture system as well as for the development of new facilities and practices, which could help to resolve future water supply and flood risk issues. The stormwater capture concepts and alternatives developed in the Task 5 – Infrastructure & Operations Concepts report are evaluated in the trade-off analysis and opportunities highlighted in this report. The primary purpose of Task 6 – Trade-Off Analysis & Opportunities is to evaluate the quantifiable and non-quantifiable benefits and costs of the stormwater concepts identified in the Task 5 report and to provide an analysis of the trade-offs among concepts. In most cases, various project concepts would generate benefits for some impact categories but not others, and would also impose various types of costs. The trade-off analysis provides a methodology for comparing different types of benefits and costs that cannot all be quantified in monetary terms. These trade-offs include economic, financial, environmental, and social effects. Economic effects include the benefits associated with different types of goods and services supported by the concepts, the costs of the different concepts, the impacts of the different concepts on the regional economy through changes in the amount and type of spending, and the cost effectiveness of different project concepts. Financial effects reflect the impacts of paying for a project, such as paying off capital debt and covering operation and maintenance expenses. Environmental effects reflect the type and quality of environmental and natural resources that would be potentially influenced by a concept. Environmental effects include items such as water quality, energy consumption, impacts on habitat, and ecosystem function. Social effects reflect how the concepts may alter the social characteristics of a community or region such as impacts to education, environmental justice, and quality of life. Benefits are quantified for three categories of resource impacts. The first category is additional stormwater conserved or stored, which is measured in terms of acre-feet per year. The second is recreation, which is measured in miles of new trails. The third is increased habitat acreage and additional acquisition of right-of-way acreage that would provide habitat benefits. Stormwater conservation benefits are valued as improved water supply reliability, recreation is valued as a type of general recreation activity similar to outdoor activities at a local park, and habitat acreage is evaluated as an ecosystem improvement. In the case of the Regional Impact Programs concept, right-of-way acreage also produces some ecosystem benefits. Quantified benefits and costs as well as categories of qualitative benefits are summarized in Table ES-1. All benefits and costs are present valued over a 50-year planning period using the current Fiscal Year 2016 federal water project planning rate of 3.125%. The economic analysis of quantified benefits can be used to evaluate the magnitude of potential benefits of each project group, recognizing that many additional benefits may exist that are not accounted for in a traditional benefit and cost analysis. It is important to note that quantified benefits could only be developed for a subset of the total beneficial effects associated with the concepts identified in the Task 5 report. There are many potential benefits associated with environmental and social improvements, flood risk mitigation, environmental justice, and other effects that could be large but cannot be evaluated quantitatively for this level of analysis. These unquantified benefits may be larger than quantified benefits in some cases and smaller in other cases. The intent of the qualitative assessment is to provide an indication of the potential magnitude of unquantified benefits.

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Managing Drought in a Changing Climate: Four Essential Reforms

Public Policy Institute of California (PPIC) | September 12th, 2018

Summary

California’s climate is changing. Hotter temperatures, a shrinking snowpack, shorter and more intense wet seasons, rising sea level, and more volatile precipita

California’s climate is changing. Hotter temperatures, a shrinking snowpack, shorter and more intense wet seasons, rising sea level, and more volatile precipitation—with wetter wet years and drier dry years—are stressing the state’s water management system. Recent climate projections indicate that the pace of change will increase. To avoid unwanted social, economic, and environmental consequences, the water system will need to adapt to greater climate extremes and growing water scarcity. While California is making good progress in some areas of drought management, a more focused plan of action is needed. Successful adaptation will require strong leadership at the state and local levels, and cooperation on all fronts. The 2012–16 drought—the hottest in the state’s recorded history and one of the driest—offered a window into the future under a warming climate and lessons for managing future droughts. Using these lessons as a starting point, this report offers a road map of essential reforms to prepare for and respond to droughts in California’s changing climate. Key reforms include: Plan ahead. Stronger drought planning is critically important for urban water management, groundwater sustainability, safe drinking water in rural communities, and freshwater ecosystems. Upgrade the water grid. California needs a comprehensive program to address above- and below-ground storage, conveyance, and operational challenges by mid-century, including repairing facilities that are broken, expanding conveyance and storage capacity, and modernizing and integrating operations. Update water allocation rules. California should comprehensively update its water allocation governance. The goals should be to find equitable and efficient ways to allocate limited supplies among competing demands during dry times while promoting efforts to capture and store water during wet times. Find the money. Reliable funding is crucial for adapting to climate change. New sources are needed to pay for necessary water-management investments and to fill funding gaps in the state’s water system. The focus of this reform agenda is on drought, because drought―more than any other aspect of California’s climate―reveals the vulnerabilities of watermanagement systems. Importantly, these reforms will improve drought resilience for today’s conditions, not just for the future.

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Johnson Valley - Upper Johnson Valley 7-018.02
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Kane Wash Area 6-089
Kelso Valley 6-031
Lanfair Valley 7-001
Langford Valley - Irwin 6036.02
Langford Valley - Langford Well Lake 6-036.01
Langford Valley 6-036.02
Las Posas Valley 4-008
Lavic Valley 7-014
Leach Valley 6-027
Lockwood Valley 4-017
Long Valley 6-011
Los Osos Valley - Los Osos 3-008.01
Los Osos Valley - Warden Creek 3-008.02
Lost Horse Valley 7-051
Lower Kingston Valley 6-021
Lower Mojave River Valley 6-040
Lucerne Valley 7-019
Malibu Valley 4-022
Means Valley 7-017
Mesquite Valley 6-029
Middle Amargosa Valley - 6-020
Middle Mojave River Valley 6-041
Mission Valley 9-014
Modoc) 5-004
Morongo Valley 7-020
Morro Valley 3-041
Napa-Sonoma Valley - Napa-Sonoma Lowlands 2-002.03
Needles Valley 7-044
Ocotillo-Clark Valley 7-025
Ogilby Valley 7-035
Ojai Valley 4-002
Orocopia Valley - 7-031
Owens Valley - Fish Slough 6-012.02
Owens Valley 6-012.01
Owl Lake Valley 6-088
Pahrump Valley 6-028
Palo Verde Mesa 7-039
Palo Verde Valley 7-038
Pamo Valley 9-024
Panamint Valley 6-058
Peach Tree Valley 3-032
Petaluma Valley 2-001
Pilot Knob Valley 6-051
Pinto Valley 7-006
Pipes Canyon Fault Valley 7-049
Pittsburgh Plain 2-004
Piute Valley 7-045
Pleasant Valley 4-006
Potrero Valley 9-029
Poway Valley 9-013
Raymond 4-023
Red Pass Valley 6-024
Redding Area - Anderson 5-006.03
Redding Area - Bowman 5-006.01
Redding Area - Enterprise 5-006.04
Redding Area - Millville 5-006.05
Redding Area - South Battle Creek 5-006.06
Rice Valley 7-004
Riggs Valley 6-023
Russell Valley 4-020
Sacramento Valley - Antelope 5-021.54
Sacramento Valley - Bend 5-021.53
Sacramento Valley - Butte 5-021.70
Sacramento Valley - Colusa 5-021.52
Sacramento Valley - Corning 5-021.51
Sacramento Valley - Los Molinos 5-021.56
Sacramento Valley - North American (5-021.64)
Sacramento Valley - North Yuba 5-021.60
Sacramento Valley - Red Bluff 5-021.50
Sacramento Valley - Solano 5-021.66
Sacramento Valley - South American 5-021.65
Sacramento Valley - South Yuba 5-021.61
Sacramento Valley - Sutter 5-021.62
Sacramento Valley - Vina 5-021.57
Sacramento Valley - Wyandotte Creek 5-021.69
Sacramento Valley - Yolo 5021.67
Salinas Valley - 180/400 Foot Aquifer 3-004.01
Salinas Valley - Atascadero Area 3-004.11
Salinas Valley - East Side Aquifer 3-004.02
Salinas Valley - Forebay Aquifer 3-004.04
Salinas Valley - Langley Area 3-004.09
Salinas Valley - Monterey 3-004.10
Salinas Valley - Paso Robles Area 3-004.06
Salinas Valley - Upper Valley Aquifer 3-004.05
Saline Valley 6-017
Salt Wells Valley 6-053
San Antonio Creek Valley 3-014
San Dieguito Creek 9-012
San Elijo Valley 9-023
San Felipe Valley 7-027
San Fernando Valley 4-012
San Gabriel Valley 4-013
San Jacinto 8-005
San Joaquin Valley - Chowchilla 5-022.05
San Joaquin Valley - Cosumnes (5-022.16)
San Joaquin Valley - Delta-Mendota 5-022.07
San Joaquin Valley - East Contra Costa 5-022.19
San Joaquin Valley - Eastern San Joaquin 5-022.01
San Joaquin Valley - Kaweah 5-022.11
San Joaquin Valley - Kern 5-022.14
San Joaquin Valley - Kings 5-022.08
San Joaquin Valley - Madera 5-022.06
San Joaquin Valley - Merced 5-022.04
San Joaquin Valley - Modesto 5-022.02
San Joaquin Valley - Pleasant Valley 5-022.10
San Joaquin Valley - Tracy 5-022.15
San Joaquin Valley - Tulare Lake 5-022.12
San Joaquin Valley - Tule 5-022.13
San Joaquin Valley - Turlock 5-022.03
San Joaquin Valley - Westside 5-022.09
San Joaquin Valley - White Wolf 5-022.18
San Juan Valley 9-001
San Luis Obispo Valley 3-009
San Luis Rey Valley - Lower San Luis Rey Valley 9-007.02
San Luis Rey Valley - Upper San Luis Rey Valley 9-007.01
San Marcos Area 9-032
San Mateo Valley 9-002
San Onofre Valley 9-003
San Pasqual Valley 9-010
Santa Barbara 3-017
Santa Clara River Valley - Fillmore 4-004.05
Santa Clara River Valley - Mound 4-004.03
Santa Clara River Valley - Oxnard 4-004.02
Santa Clara River Valley - Piru 4-004.06
Santa Clara River Valley - Santa Clara River Valley East 4-004.07
Santa Clara River Valley - Santa Paula 4-004.04
Santa Clara Valley - East Bay Plain 2-009.04
Santa Clara Valley - Niles Cone 2-009.01
Santa Clara Valley - San Mateo Plain 2-009.03
Santa Clara Valley - Santa Clara 2-009.02
Santa Cruz Mid-County 3-001
Santa Margarita 3-027
Santa Maria River Valley - Arroyo Grande 3-012.02
Santa Maria River Valley - Santa Maria 3-012.01
Santa Maria River Valley 3-012.02
Santa Maria Valley 9-011
Santa Rosa Valley - Santa Rosa Plain 1-055.01
Santa Ynez River Valley 3-015
Scott River Valley 1-005
Searles Valley 6-052
Seven Oaks Valley 8-008
Shasta Valley 1-004
Sierra Valley 5-012.01
Silver Lake Valley 6-034
Simi Valley 4-009
Soda Lake Valley 6-033
South San Diego River Valley 9-015
Superior Valley 6-049
Temecula Valley 9-005
Terwilliger Valley 7-026
Thousand Oaks Area 4-019
Tule Lake 1-002-01
Twentynine Palms Valley 7-010
Ukiah Valley 1-052
Upper Kingston Valley 6-022
Upper Mojave River Valley 6-042
Upper Ojai Valley 4-001
Upper Santa Ana Valley - Chino 8-002.01
Upper Santa Ana Valley - Cucamonga 8-002.02
Upper Santa Ana Valley - Rialto-Colton 8-002.04
Upper Santa Ana Valley - Riverside-Arlington 8-002.03
Upper Santa Ana Valley - San Bernardino 8-002.06
Upper Santa Ana Valley - San Timoteo 8-002.08
Upper Santa Ana Valley - Temescal 8-002.09
Upper Santa Ana Valley - Yucaipa 8-002.07
Vallecito-Carrizo Valley 7-028
Ventura River Valley - Lower Ventura River 4-003.02
Ventura River Valley - Upper Ventura River 4-003.01
Vidal Valley 7-042
Ward Valley 7-003
Warren Valley 7-012
West Salton Sea
Wingate Valley 6-019
Yuma Valley 7-036

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