Brief thoughts on the Safe and Affordable Drinking Water Fund (RIP)

I've been AWOL from my blog for the past few months due to being hired by the California Energy Commission (CEC) to work on energy efficiency compliance issues as an Energy Analyst.

This is going to be a quickie dip into blogging and then back to analyzing energy.

A Safe and Affordable Drinking Water Fund was under discussion as part of the California budget, but was scrapped on June 8, 2018, per the Sacramento Bee (by D. Kasler and A. Ashton). The compromise that resulted involves new General Fund contributions to safe drinking water projects. The Maven's Notebook, a water policy blog founded by Chris Austin, noted that same day that the legislature is evidently (per Cal-EPA) showing "a commitment to continue discussions this summer."

I have deep respect for the Visalia-based Community Water Center, which supported the creation of this new public goods charge for water. I have to believe they aren't going to give up on this idea, which has been kicking around for a long time. There's lots of support for it, with two-thirds of Californians supporting the fund according to their background about the fund.

Their press release issued on June 8, 2018, doesn't mention that the fund was scuttled, but frames it as a victory because there is now a new commitment of resources dedicated to safe drinking water projects, and the aforementioned commitment to continue discussions this summer. Hopefully those discussions go somewhere where there is a lot more safe drinking water for California's poor and rural communities.

Meanwhile, let's talk about this idea of a public goods charge for water.

Here's an old CPUC-issued paper written in 2010 by some fellow alums from the Goldman School of Public Policy (at UC Berkeley), supporting the introduction of a public goods charge for water. My fellow water policy nerds proposed these reasons for the introduction of a public goods charge for water:

• 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. 

(Note: AB 32, for anyone not immersed in California climate change work, is the landmark California Global Warming Solutions Act of 2006, which primarily addressed greenhouse gas reduction goals.)

This paper proposes that the public goods charge be assessed via "volumetric surcharges on each water bill where metered, or by alternate means in the short‐term for areas not metered."

The Safe and Affordable Drinking Water Fund took another approach to raising funds. This was clarified in a blog post by attorney S. Holzer:

The bill would levy a 95 cent per month tax on water meters “up to one inch or customers without water meters” (see Article 5 of SB 623).  The tax would increase, depending on the size of the water meter at issue, to as much as $10 per month for customers with water meters greater than four inches.There would be exemptions from the tax for low-income customers, e.g. if the customer’s household income equals or is less than 200 percent of the federal poverty level, or if the water meter exclusively measures flow of non-potable/recycled water.

Also, "the bill would allow farmers to enroll in a waiver program by paying an applicable fee..."

More on the Safe and Affordable Drinking Water Fund as it was originally conceived:

A News Deeply/ Water Deeply article by Tess Townsend (May 8, 2018) California Considers Charge on Utility Bills to Create Safe Water Fund summarizes the scope of the proposed-and-now-scuttled fund thus:

A piece of legislation, introduced last year as Senate Bill 623 and later included as a trailer bill in the governor’s proposed budget, seeks to solve this structural problem by raising a $140 million annual Safe and Affordable Drinking Water Fund, from a combination of charges on agriculture and residential water users. Money would go toward ongoing operation and maintenance costs for treatment in under-resourced districts. The charge on residential users would amount to about $1 a month for most households served by the 1,000 or so agencies collecting fund revenue.

You can read the original bill here.

From the above, I deduce that the amount collected wouldn't have been tied (or not tied tightly) to the rate of consumption of water. This means the funding stream wouldn't be choked by water conservation.

I just want to flag this point for people working on the development of future public goods charges. It's important.

You see, I have learned that the funding stream for the work I'm doing at the California Energy Commission in the Efficiency Division is tied to energy consumption. The upshot is that the more successful the CEC Efficiency Division is at its job, the less money it has.

The funding for my division comes from ERPA, the Energy Resources Program Account. The law dictating the creation of the ERPA was passed in 1974. You can read it here. It is a fee applied to a utility bill to fund public-interest programs related to that utility service. The 1974 law directs the state's electricity utilities to gather a surcharge per kilowatt hour of electricity consumed.

It wasn't thought through to its inevitable conclusion, apparently, as it now dwindles and the governor is demanding a doubling of energy efficiency in the state.