Water infrastructure investments help CA utilities deal with drought, report finds
According to a new report by Fitch Ratings, California utilities that have made proactive, long-term investments in water infrastructure are better equipped to deal with water supply pressures during drought.
NEW YORK, Oct. 8, 2014 -- According to a new report by Fitch Ratings, California utilities that have made proactive, long-term investments in water infrastructure are better equipped to deal with water supply pressures during drought.
Among five of the state's largest public water utilities, Fresno and Sacramento are most pressured for alternative water sources by the current severe drought. While Fresno faces overpumped groundwater and is most vulnerable to a drought-related downgrade, Sacramento is realizing the cost of heavy reliance on vulnerable surface water flows and tardy adoption of basic water conservation technology like water meters.
'When cities make long-term investments in water infrastructure, not every drought turns into a fire drill for conservation," said Kathy Masterson, senior director at Fitch Ratings. "The fact is that droughts are cyclical, and careful planning can help offset or delay some of the resulting stresses like water restrictions."
Decades of previous planning have given cities like San Diego, Los Angeles and northern California's East Bay Municipal Utility District more certainty regarding their water supplies. Those just beginning to make infrastructure investments, like Sacramento and Fresno, may need to enforce strict conservation policies to prevent near-term water shortages.
While the steep cost of necessary investments for supply redundancy or supply hardening may be undesirable to ratepayers, it can prevent water restrictions and significant rate impacts in the future.