WATER : San Diego Takes Aim at L.A.’s Hegemony

In the West, as Mark Twain observed, “whiskey is for drinking, and water is for fighting about.” No one knows this better than the directors and staff of the Metropolitan Water District, lifeblood of the $500-billion Southern California economy. The MWD, which annually supplies nearly 2 million acre feet of water from the Colorado River and State Water Project to 27 Southland member agencies and their 16 million customers, has fought 50 years of epic battles with Arizona, Northern California, agribusiness and the environmental community to bring more water to Southern California. Today, the Met, as it is known, is again an embattled agency. This time, its biggest customer, San Diego County, is on the attack.

Rapidly growing San Diego, which draws 90% of its water from the Met, claims to face an impending water shortage because of the Met’s reputed inability to guarantee a reliable, low-cost water supply. In response, San Diego has drawn up controversial plans to ensure its water future. These include greater Met water entitlements and board representation (at Los Angeles’ expense), opposing the Met’s Colorado River reliability program and negotiating water leases with the Imperial Valley to reduce the need for Met-supplied water.

These water plans are shortsighted and contradictory. They threaten the Met and its member agencies, the city of Los Angeles and even San Diego itself. Because of the enormous stakes involved for all Southern California, due to growing limits on the region’s water supply, San Diego’s proposals require scrutiny.

For starters, San Diego wants a greater share of Met water--so-called preferential rights--and a greater voice on its board of directors. As a buyer of a 25%-28% share of Met water, San Diego contends its purchases should heavily count in determining water entitlements and representation. But, since 1931, Met water entitlements and representation have been based on property taxes and assessed valuation. The reason: The Met’s substantial start-up costs--the Colorado Aqueduct, pumping plants, storage and distribution facilities--were paid for by taxpayers because there were so few water purchasers.

The current system clearly benefits Los Angeles, whose taxpayers paid 80% of initial Met costs. Los Angeles has preferential rights to a 25% water share, though it currently buys only 8%-10%. Los Angeles and its suburbs, it should be remembered, created the Met in 1928. In effect, the city bought a water-insurance policy, for which it has diligently paid 60 years of premiums. It does not use that much Met water because cheaper Owens River water is available. But with the Mono Basin decision reducing the city’s supply by 20%, Los Angeles now must buy more Met water.

By contrast, the San Diego County Water Authority joined the Met in 1946--after major capital investments were made. Owing to its small size, San Diego paid few early Met taxes. Accordingly, it has preferential rights to only 12% of Met water, though its current purchases are more than double that amount.

Balanced against San Diego’s demands for more Met water and representation is Los Angeles’ historical equity claim. Since 1931, Los Angeles has invested in MWD infrastructure far in excess of its short-term water needs. Indeed, relative to its water needs, it has overpaid by nearly $3 billion (in today’s dollars) for Met capital and operating costs, compared with other member agencies. San Diego has been L.A.’s chief beneficiary. Relative to its water needs, San Diego has underpaid by more than $2 billion (in today’s dollars) for Met infrastructure. In effect, Los Angeles has heavily subsidized San Diego’s water needs, the underpinning of its spectacular postwar growth.

For years, San Diego resisted efforts to shift Met capital costs from taxes to water. Recently, though, the Met has shifted capital financing to water charges. The Met plans to finance its ambitious 10-year, $4 billion-to-$5 billion program of new reservoirs and pipelines by charging those who stand most to benefit--water users in rapidly growing areas, like San Diego.

While San Diego, because of its large water purchases, may deserve a somewhat greater share of Met water and representation, Los Angeles’ equity claim to water in times of shortage--based upon its historical capital contribution, adjusted for the time value of money--also needs to be recognized. An ongoing state audit of the Met, triggered by those counties that suddenly will have to bear greater costs, must address L.A.’s equity concerns.

Paradoxically, San Diego’s demands for more Met water and representation are undercut by its opposition to the Met’s Reliability Plus program. This plan involves a partnership with Nevada and Arizona to make Colorado River supplies more reliable over the next 30 years by storing and sharing conserved water.

San Diego is the only Met member agency to oppose Reliability Plus. It claims the plan is a “ploy” to discourage its leasing deal with the Imperial Valley in order to protect the Met’s revenue base and capital programs.

Gov. Pete Wilson and three big agricultural districts using the Colorado River have been recruited to oppose the Met plan on the ground that it usurps state authority in dealing with Nevada and Arizona. The six major Southern California users of Colorado River water--the Met, San Diego, Los Angeles and the three agricultural districts--are presently meeting to settle their disagreements. Interestingly enough, a diplomat with Middle East experience has been hired to facilitate the negotiations. But failure to implement some version of Reliability Plus threatens the water future of all Southern California.

Why is San Diego opposed to Reliability Plus even as it seeks more control over Met water? The answer may lie in the city’s most audacious proposal--water leasing. To reduce its reliance upon Met water, San Diego wants to buy conserved water from the Imperial Valley. It wants to lease up to 405,000 acre feet annually--75% of its current Met water purchase--for 55 years or longer. Leasing, however, would threaten the Met’s planned reservoirs and pipelines for San Diego.

A major stumbling block to San Diego’s leasing hopes is the expense of building a 75- to 100-mile aqueduct. This could cost $1 billion or more, adding substantially to project expenses. Because such capital costs threaten to make leased water more expensive than Met water, proponents would like to “wheel” Imperial Valley water through the Colorado Aqueduct for a nominal charge. Yet, Reliability Plus promises to keep the aqueduct filled for the next 30 years. Self-interest thus may figure in San Diego’s opposition to Reliability Plus. Absent the program, there might be unused aqueduct capacity to wheel Imperial water to San Diego.

Motives aside, the leasing plan is risky. Fifty-five years is a short time in the water business. Facing growth itself, the Imperial Valley is unlikely to commit its water for a longer period, leaving San Diego stranded in 2050. Also, Imperial Valley water is quite brackish--near the margin of domestic use--with less reclamation potential than Met’s blend of Northern California and Colorado River water. The plan’s chief beneficiaries may not be San Diegans but the legendary Bass brothers of Texas oil fame. The Basses own substantial Imperial Valley farmland and are leading the charge for leasing. As water farmers, they benefit from San Diego/Met competition.

San Diego is glossing over the costs of leasing while ignoring the benefits of cooperating with the Met and Los Angeles. But there is much to be gained by cooperation. Met’s programs benefit San Diego more than any other member agency. Historically, Los Angeles has been a major partner of San Diego water development. By recognizing L.A.’s valid equity claims, San Diego can maintain this vital partnership without unduly sacrificing its water future.