BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 555| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: SB 555 Page 2 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. SB 555 Page 3 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. SB 555 Page 4 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 SB 555 Page 5 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. SB 555 Page 6 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 SB 555 Page 7 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 **** END ****