MWD May Offer Rebates to Encourage Conservation

To encourage saving water, a committee of the Metropolitan Water District on Monday recommended paying millions of dollars in rebates to water agencies that get customers to cut use by more than 5% this summer.

The plan, which officials expect to be approved by the MWD board today, would rebate $100 for every acre-foot of water that local agencies conserve between June 1 and Sept. 30. If successful, the program would bring an estimated $10 million to the 27 Southern California water agencies served by MWD.

The money could be passed along to retail customers as rewards, could pay for “water cops” to enforce conservation rules, or could be used to offset lower water sales, officials said.

“Money is a great persuader,” said MWD General Manager Carl Boronkay, who urged adoption of the rebate program. “In order to get the money, they have to get demand down. Just how they do that, we don’t dictate. . . . We’re leaving it to their imagination.”

The rebate program is the centerpiece of MWD’s plan for dealing with an estimated 10% to 12% shortage in water supplies this summer.

The MWD, which supplies about 60% of the water consumed by 15 million residents in the six-county region, anticipates being short about 200,000 acre-feet of water because of severe drought conditions that have reduced water supplies from the Sierra Nevada and Colorado River. An acre-foot is enough water to cover an acre to a depth of one foot, or 326,000 gallons--roughly the amount of water used by two families in a year.

Under the proposed “Drought Action Plan ‘90,” MWD will also spend an estimated $2 million on advertising, $500,000 on conservation kits and $500,000 on low-flow plumbing fixture rebate programs.

The agency estimates that those measures can cut overall water consumption by about 100,000 acre-feet, or roughly 5% of total use. Conservation would be measured by comparing this summer’s use against 1989 figures, adjusted for population in creases.

Any cut above the 5% target by its member agencies will qualify for the conservation rebate.

For some agencies, that could be a considerable amount of money.

The Los Angeles Department of Water and Power uses about 700,000 acre-feet of water annually, and Mayor Tom Bradley has said that if residents do not voluntarily save 10% of that amount, he will seek a mandatory rationing system. If the city meets that goal, DWP could collect about $3.5 million in rebates from MWD.

Dorothy Jensen, a DWP spokeswoman, said the funds probably would be passed along to city residents in the form of lower water rates. Based on 1989 total revenues of $294 million, the rebate would reduce billings by 1.2%.

Passing along savings may help keep the public happier with conservation than they were in the 1978 drought. At that time, water rates in many communities went up as usage went down, and water agencies struggled to meet their fixed business costs.

Boronkay said he is hopeful that the rebate program will help local water agencies, serving more than 300 communities across Southern California, to develop programs for cutting use voluntarily.

Besides paying $10 million in rebates, the agency could lose an additional $25 million in revenues if usage drops 10%, a spokesman said. The MWD, one of the largest water agencies in the nation, has about $150 million in cash on hand.

Despite the cost of the rebates, MWD would like to conserve more than 10%, so the agency can increase its water reserves in case of a fifth year of drought.

“It’s better to give the carrot and save the stick for a more drastic situation,” said Boronkay. During earlier droughts, MWD also adopted a punitive pricing schedule that charged higher rates to water agencies that failed to cut use by 10%.