June 25, 2017
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How One Water Agency Thrived During California’s Drought

Leaders from Moulton Niguel Water District in Southern California explain how they used a combination of tools, including data analysis, budget-based rates and communication changes, to successfully weather the drought.

By Tara Lohan

NOW THAT CALIFORNIA has come through the worst of its recent five-year drought, it’s time to take stock of what went wrong and right. Moulton Niguel Water District, which serves 170,000 people in Orange County with water, wastewater and recycled water services, insists it didn’t just survive the drought, but thrived.

The district saw per capita water use fall and saw an improvement in the water efficiency of its customers. Moulton Niguel changed its outreach strategy to use more electronic communication with customers and is now piloting a program that allows customers to monitor their usage through a mobile app.

But one of the most helpful things was a budget-based rate structure put in place in 2011 that promoted efficiency and reinvested the money generated by customers’ inefficient water use back into the community to foster more water efficiency programs.

To find out more about what the district did, Water Deeply talked to Joone Lopez, Moulton Niguel Water District’s general manager, and Drew Atwater, director of planning.

Water Deeply: What did you do that allowed you to thrive through the drought?

One of the things we did was really dig into the data. Without good data, you don’t really know how well you’re doing, and you don’t really know how to improve because there’s really not an evaluation tool that defines what’s working, what’s not and what are the areas that need improvement. But we had that information, so we knew how to evaluate programs, we knew how to understand what works, what doesn’t.

One of the earliest things we did was, when the state initiated its two-day-per-week watering restrictions, we were one of two agencies that was exempted from that because we were able to show with data that what we were doing was already superior to what they were asking. In our service area, we tried that two-day-a-week watering approach back in 2009 for about a year and a half, and there was no reduction in water use. So, for us, we knew that really wasn’t the most effective route.

Water Deeply: The district was just given an award for innovation by the Association of California Cities – Orange County for your work with the California Data Collaborativeon a water demand forecasting tool that helped save $20 million. Can you explain the project?

Additionally, the district was evaluating seasonal storage capacity acquisition to store recycled water produced in the winter for use in the summer to avoid the need for potable makeup water in the recycled water system.

The statistical analysis provided a tool to help operators in better managing the system, to know when there is a high likelihood for need of potable makeup water in the future and then to target large irrigators to encourage them to shift their irrigation. Additionally, the detailed statistical analysis helped support the district in determining that spending $20 million on seasonal storage capacity acquisition is not cost-effective and aided in understanding recycled water demand in detail to make that decision.

Water Deeply: How did your rate structure help during the drought?

Lopez: I don’t know if you’re familiar with water budget-based rate structure, but there is a tiered way of setting rates, but it goes further in incentivizing efficiency. Based on how many people are in the household, how much area you have to irrigate, we customize a budget based on efficient indoor and outdoor use, and if you stay within your budget, you pay less. If you decide to be more inefficient and use more water beyond your budget, you pay more. So it’s tiered, and the costs climb, because the more you are inefficient, the more you pay.

The rate structure we’ve had since 2011 has proven to be very effective, because it incentivizes efficient use and it also puts the choice and responsibility in the customers’ hands.

Water Deeply: And what happens when people are inefficient with their water usage and pay higher rates?

Lopez: The whole message of the rate structure was that the money we collect from inefficient use we were able to invest back into conservation efficiency programs that benefit our community.

So, we did a lot of partnerships with schools and cities where we were able to invest that money into transforming medians, transforming athletic fields, so people really saw how this rate structure worked and how it was an investment back into the community where those funds were collected.

Water Deeply: A lot of water agencies were hit hard financially during the drought because more conservation means less money in revenue, despite costs to supply water remaining constant. How did you address that?

Lopez: We restructured so that more of our costs are associated with the fixed cost rather than the variable costs. We have rate experts, we have data scientists, so in that combination we’re able to do some very sophisticated 10-year financial lookouts and be very nimble in looking at our rate structure and understanding the relationship between rates and water usage.

So because of the way that we’re structured, even though our percentage reduction cutback was 20 percent, we did not see a loss of revenue, and that was so fundamental and critical because it keeps us operating and these guys have done an outstanding job of structuring our financial portfolio and our financial structure in such a way that we were very resilient during these years of cutbacks.

Water Deeply: What is the per capita use in gallons of water per day? And what was it before the drought?

Atwater: We’re at about 130, 135 today in total. That’s the total water use divided by population. Before the drought, probably 155 to 160.

I think the key message that the district has had is to be efficient. If it’s hotter, people need to water more. So, the rate structure and all our messaging have been geared toward greater efficiency. One thing we’ve really tracked is how efficient customers are, the number of customers who go over their budget, or the water that is used above their budgets.

Lopez: We’ve done a lot of outdoor landscape work because we know throughout the state that about 60 percent of all inefficient use is associated with outdoor irrigation systems. So, in the past three years, we’ve removed about 5 million square ft of turf. Just to give you an idea, we represent a population of about 5 percent of Orange County, but we removed about 25 percent of all the turf that was removed in Orange County.

But that represents only 1 percent of all landscape in our service area alone. So, it just gives you a scale of understanding how much more opportunity there is if you really transform your outdoor landscape into California-friendly gardens. You can really have much more efficiency as a community.

Water Deeply: What did you learn about your customers?

Lopez: Customers want information. They want to do their part. A lot of people think the public doesn’t get it – but they get it. They said, “Give us information or instructions to help us be efficient.” And one of the things we’re doing right now is we have a customer portal, and we’re piloting a version of, basically, water smart meters so that customers can get their usage through an app on their phone so they can see their rate of activity, how much they’re using.

And even with all the rain [this year], we have not seen a rebound in how much people are using, because they’re in a different mindset altogether.

Originally appeared newsdeeply.com