BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            SB 555          Hearing Date:    April 14,  
          2015
           ----------------------------------------------------------------- 
          |Author:    |Wolk                   |           |                 |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Version:   |April 7, 2015                                        |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Urgency:   |No                     |Fiscal:    |Yes              |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Consultant:|Dennis O'Connor                                      |
          |           |                                                     |
           ----------------------------------------------------------------- 
          
           Subject:  Urban retail water suppliers: water loss management.


          BACKGROUND AND EXISTING LAW
          Under the Urban Water Management Planning Act (Act), all urban  
          water suppliers are required to prepare and adopt an urban water  
          management plan (UWMP).  Updated every five years, the plans  
          include, among other things, a description of the service area  
          of the supplier, the identity and quantity of water resources,  
          and water use projections.  UWMPs help inform the public about  
          the water challenges faced by their local water supplier, the  
          suppliers' plans for addressing those challenges, and are the  
          basis for making water availability determinations under the  
          "show us the water" statutes (SBs 610 & 221 of 2001).   
          Compliance with the Act is a requirement to receive state  
          funding.  The 2015 update of UWMPs are due July 1, 2016.

          Last year, the Legislature passed and the Governor signed SB  
          1420 (Wolk).  That bill, among other things, added to the Act a  
          requirement that beginning with the 2015 update, UWMPs are to  
          contain a calculation of the distribution system water losses.   
          The losses are to be reported in accordance with a worksheet  
          approved or developed by the Department of Water Resources (DWR)  
          through a public process. The water loss calculations are to be  
          based on the water system balance methodology developed by the  
          American Water Works Association (AWWA).

          PROPOSED LAW
          







          SB 555 (Wolk)                                           Page 2  
          of ?
          
          
          This bill would:

          1.Require DWR, by July 1, 2016, to adopt rules governing all of  
            the following:
                 Conducting standardized water loss audits by urban  
               retail water suppliers in accordance with the method  
               adopted by the American Water Works Association in the  
               third edition of Water Audits and Loss Control Programs  
               Manual M36 and AWWA Free Water Audit Software version 5.0.
                 Validating a water loss audit report prior to submitting  
               the report to DWR.
                 Submitting a water loss audit report to DWR, including  
               the method and timing.

          1.Require DWR to update the water loss rules every five years  
            and no later than six months after the release of any  
            subsequent editions of the American Water Works Association's  
            Water Audits and Loss Control Programs Manual M36.

          2.Require every urban retail water supplier, by July 1, 2016,  
            and annually each year thereafter, to submit a completed and  
            validated water loss audit report for the previous calendar  
            year as prescribed by DWR.  Each water loss audit report is to  
            be accompanied by information, in a form specified by the  
            department, identifying steps taken in the preceding year to:
                 Increase the validity of data entered into the final  
               audit report;
                 Reduce the volume of apparent losses; and
                 Reduce the volume of real losses.

          1.If DWR finds any final audit report to be incomplete,  
            unvalidated, unattested, or incongruent with known  
            characteristics of water system operations, DWR would be  
            required to deemed the report incomplete and return it to the  
            water supplier.  A water supplier whose audit is returned by  
            would be required to resubmit a completed audit within 90  
            days.

          ARGUMENTS IN SUPPORT
          The author asserts that "it is essential that all California  
          communities use existing water supplies as efficiently as  
          possible."

          "Despite the availability of free audit software and the  








          SB 555 (Wolk)                                           Page 3  
          of ?
          
          
          establishment of a Best Management Practice for water loss by  
          the California Urban Water Conservation Council (CUWCC), urban  
          water suppliers have been slow to realize the full potential of  
          water loss control. One reason for the slow adoption of water  
          loss control methods is the unreliability of water loss audit  
          data. One CUWCC study found that 35% of water audit data  
          submitted by California water suppliers was invalid."

          "By requiring urban water suppliers to report system audit  
          results and directing DWR to set audit standards, while  
          providing the necessary technical assistance, water suppliers  
          will achieve effective water loss control and contribute to  
          California's water management, climate mitigation and climate  
          adaption goals."

          ARGUMENTS IN OPPOSITION: None received
          
          COMMENTS
           Is Water Loss A Real Problem?   It's hard to know.  According to  
          the California Water Plan, in its discussion on urban water use  
          efficiency:

               "The amount of water lost due to leakage in the  
               distribution system of the State's water suppliers is not  
               well known. This is largely due to the fact that not all  
               water suppliers perform regular water loss audits. If water  
               audits are not conducted, it is difficult for a water  
               agency to know the extent of its losses and unlikely that  
               the agency will implement practices to reduce these  
               losses." (California Water Plan Update 2013, Vol. 3, Ch. 3)

          Proponents point to a 2011 study prepared for the California  
          Public Utilities Commission Energy Division titled "Embedded  
          Energy in Water Pilot Programs Impact Evaluation."  Included in  
          that study was an evaluation of Southern California Edison's  
          (SCE) Leak Detection pilot program.  However, the statewide  
          estimates of water losses and economically recoverable losses  
          reported in that study were essentially back of the envelope  
          calculations; based on year 2000 urban water use, "the commonly
          quoted threshold for acceptable real losses in California of 10%  
          of volume supplied," and a 40% economically recoverable real  
          losses rate based on SFPUC's experience.  (Secondary Research  
          For Water Leak Detection Program And Water System Loss Control  
          Study, December 2009). Consequently, it is not clear whether  








          SB 555 (Wolk)                                           Page 4  
          of ?
          
          
          those estimates of 840,000 af/y real losses and 350,000 af/y  
          economically recoverable real losses are reasonably accurate or  
          not.

           Do any other states require this?  According to the Center For  
          Neighborhood Technology:

               "In June of 2010, the Georgia Water Stewardship Act (the  
               Act) was signed into law in an effort to create a "culture  
               of water conservation" throughout the state of Georgia. One  
               of the main components of this legislation was a mandate  
               requiring that all utilities serving populations of 3,300  
               and above submit annual water loss audits utilizing the  
               American Water Works Association (AWWA) and International  
               Water Association (IWA) water audit methodology (M36)."

               "Currently, Georgia has had 100% compliance from utilities  
               for every year that they have been required to submit the  
               AWWA water audits. It is interesting to note that some  
               utilities serving populations less than 3,300, while not  
               included in this mandate, are now using the auditing method  
               voluntarily after hearing positive anecdotes from their  
               larger system peers. The success of Georgia's program  
               provides an effective blueprint for other states and  
               agencies in how to begin providing support to their  
               utilities in moving forward with best practices in water  
               loss management." (Stepping Up Water Loss Control: Lessons  
               From The State Of Georgia, February 2014)

          Besides Georgia, it appears that some states have water loss  
          detection requirements of one type or another.  But none of  
          those states have programs as rigorous as Georgia's or as  
          proposed by this bill.

           Who Validates?   The bill requires DWR to establish rules for  
          validating the water loss audit report prior to submitting the  
          report to DWR.  Who would that entity be?  How with the  
          validating entity's cost be reimbursed?  The bill is silent on  
          these questions.

           How Does This Relate To UWMP Act Requirements?  As noted in the  
          background, last year SB 1420 (Wolk) added water loss reporting  
          requirement to the Act.  While the reporting requirements in the  
          Act are similar to that in this bill, they are not the same.  It  








          SB 555 (Wolk)                                           Page 5  
          of ?
          
          
          is not clear whether future plans will simply report an agency's  
          last 5 annual audits required by this bill, or if the future  
          plans would have to present some other water loss analysis.

           6 Months To Adopt Rules?   This bill would give DWR 6 months to  
          adopt rules regarding water loss audits.  Under best of  
          circumstances, the administrative process for adopting rules or  
          regulations is about one year.  The committee may wish to amend  
          this bill to give DWR a more reasonable amount of time to adopt  
          rules required by this bill. [See Suggested Amendment]  
           
          SUGGESTED AMENDMENT
          
               On page 2, line 3, strike out "July 1, 2016" and insert  
          "January 1, 2017"

          
          SUPPORT
          Natural Resources Defense Council
          Clean Water Action
          Sierra Club California

          OPPOSITION: None Received

          
                                      -- END --