BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        SB 555|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                    THIRD READING


          Bill No:  SB 555
          Author:   Wolk (D), et al.
          Amended:  4/16/15  
          Vote:     21  

           SENATE NATURAL RES. & WATER COMMITTEE:  8-0, 4/14/15
           AYES:  Pavley, Stone, Allen, Fuller, Hueso, Jackson, Monning,  
            Wolk
           NO VOTE RECORDED:  Hertzberg

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/28/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SUBJECT:   Urban retail water suppliers:  water loss management


          SOURCE:    Author


          DIGEST:  This bill requires urban retail water suppliers to  
          submit an annual water loss audit report to the Department of  
          Water Resources (DWR) beginning in 2017. This bill requires DWR  
          and the State Water Resources Control Board to establish rules  
          related to the water loss audits and to establish water loss  
          performance standards.


          ANALYSIS:   


          Existing law:










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          1)Requires all urban water suppliers to prepare and adopt an  
            urban water management plan (UWMP).  


          2)Requires UWMPs to be updated every five years.  The 2015  
            update of UWMPs are due July 1, 2016.


          3)Requires UWMPs to include, among other things, a description  
            of the service area of the supplier, the identity and quantity  
            of water resources, and water use projections.


          4)Requires UWMPs to also include a calculation of the  
            distribution system water losses.  The losses are required to  
            be reported in accordance with a worksheet approved or  
            developed by DWR through a public process. The water loss  
            calculations are required to be based on the water system  
            balance methodology developed by the American Water Works  
            Association (AWWA).


          This bill:


          1)Requires DWR, by January 1, 2017, to adopt rules governing all  
            of the following:


             a)   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.


             b)   Validating a water loss audit report prior to submitting  
               the report to DWR.


             c)   Submitting a water loss audit report to DWR, including  
               the method and timing.









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          2)Requires 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.


          3)Requires every urban retail water supplier, by July 1, 2017,  
            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:


             a)   Increase the validity of data entered into the final  
               audit report;


             b)   Reduce the volume of apparent losses; and


             c)   Reduce the volume of real losses.


          4)Requires DWR, if it finds any final audit report to be  
            incomplete, unvalidated, unattested, or incongruent with known  
            characteristics of water system operations, to deem the report  
            incomplete and return it to the water supplier.  Requires a  
            water supplier whose audit is returned by DWR to resubmit a  
            completed audit within 90 days.


          Background


          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" 2001  
          statutes (SB 610 (Costa, Chapter 643) and SB 221 (Kuehl, Chapter  
          642).  Compliance with the Act is a requirement to receive state  
          funding.  









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          Comments


          1)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 San  
            Francisco Public Utilities Commission's experience.   
            (Secondary Research For Water Leak Detection Program And Water  
            System Loss Control Study, December 2009). Consequently, it is  
            not clear whether those estimates of 840,000 acre feet per  
            year (af/y) real losses and 350,000 acre feet per year af/y  
            economically recoverable real losses are reasonably accurate  
            or not.


          2)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  







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               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.


          3)Who validates?  This 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?  This bill is silent  
            on these questions.


          4)How does this relate to UWMP Act requirements?  Last year, SB  
            1420 (Wolk, Chapter 490, Statutes of 2014) 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 is not clear whether future plans will  
            simply report an agency's last five annual audits required by  
            this bill, or if the future plans would have to present some  
            other water loss analysis.








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          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee:


        One-time costs of $400,000 from the General Fund to DWR to  
            develop the rules guiding the water audit reports.


        Unknown ongoing costs, but likely in the range of $150,000 to  
            $200,000, from the General Fund to review audits annually,  
            provide technical assistance to urban water suppliers, and  
            update the water audit report regulations every five years.




          SUPPORT:   (Verified6/1/15)


          California League of Conservation Voters
          Clean Water Action
          Coastal Environmental Rights Foundation
          Friends of the River
          Heal the Bay
          Natural Resources Defense Council
          Planning and Conservation League
          San Diego County Water Agency
          Sierra Club California
          Sonoma County Water Agency
          Wholly H2O


          OPPOSITION:   (Verified6/1/15)


          None received


          ARGUMENTS IN SUPPORT:      The author asserts that "it is  
          essential that all California communities use existing water  







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          supplies as efficiently as possible.


          "Despite the availability of free audit software and the  
          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."


          Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116
          6/1/15 16:16:54


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