Summer 2018 ForestLife

What price a watershed?

What’s the industry standard for water agencies on watershed health?

Water agencies and hydroelectric power suppliers know that their water supplies depend on the productivity, health, and resilience of their source watersheds. Because of this, many such agencies around the country have set up systems to undertake and pay for fundamental “repair and maintenance” activities that support a well-functioning source watershed as part of their standard operating procedures. PFT recently undertook a survey of these to determine the water industry norm, and how California compared to that.

Water agencies typically manage their forested watersheds to retain natural forest cover; protect the overall watershed from conversion to other uses; reduce sediment, other pollution, and fire risks; and provide for access, security, disaster response, and other costs of holding land. Water suppliers fund protection of private lands in their watersheds through funding restoration, buying parcels, and acquiring conservation easements, often in collaboration with state and federal agencies. Expenditures on these activities are highly cost effective in terms of their comparators, such as building new dams for increased supplies or new filtration systems to improve water quality. For example, investments for water quality through watershed health can be one-eighth of that for filtration systems, and for quantity are often one-tenth or less of that for new built infrastructure.

Ensuring watershed function throughout an entire river’s span requires the complementary work of many landowners, both public and private.

As documented in our recently released A Risk Assessment of California’s Key Source Watershed Infrastructure (available here), the five key watersheds in Northern California that provide drinking water for more than 28 million Californians as well as the majority of irrigated agricultural lands have significantly degraded health and function. The Assessment also outlined a series of specific restoration actions that would address this problem.

However, in these five watersheds that supply the largest and most important reservoirs in California, neither water agencies, nor another major beneficiary of reliable water, the hydroelectric power industry, pay for such repair and maintenance. Private landowners and taxpayers are the only entities investing in these watersheds, paying nearly $250 million a year just on these watershed repair activities (not including the costs of commercial management), according to our recent assessment. As underscored in the recent Legislative Analyst’s report (see “Pioneering Progress on Forest and Climate Policy”), getting our watersheds back to a more functional and resilient condition will require investments beyond what landowners and taxpayers currently contribute. (It is worth noting that the Association of California Water Agencies, ACWA, recognized the need for such actions and investments in its Headwaters Framework report in 2015.)

Fortunately, California has begun to address this problem seriously. PFT-sponsored legislation (AB 2480), authored by Assemblymember Richard Bloom and signed into law in late 2016, created a framework to fund the needed maintenance and repair of the state’s watersheds. This pioneering legislation put natural infrastructure—such as forests, meadows, and streams—on equal footing with built infrastructure in terms of being able to finance its repair and maintenance through specific restoration and conservation activities. These activities align with those typically covered by water agencies as an industry standard.

As we are again seeing this year, extreme climate-related events such as drought, fires, and floods will continue to increase in frequency and expense. The 2017 Oroville Dam spillway failure has cost over a billion dollars to date (not counting insurance claims), and estimates for completing the repairs may double that. Fighting out-of-control wildfires in our watersheds—such as the Rim Fire—costs billions more. However, reducing these risks through comprehensive, regular watershed repair and maintenance per industry standards is a fraction of that cost. PFT’s Risk Assessment outlined a comprehensive suite of actions that would cost under $200 million a year for 15 years to complete. This would greatly benefit watershed function and reliability with safer supplies of cool clean water, as well as safer communities and cleaner air. This makes a more concerted investment in restoring and maintaining source watersheds an urgent priority. Water contractors such as the Metropolitan Water Agency, which supplies water to many of the residents of southern California, have said they would be willing to pay their fair share of watershed costs. The public benefits from this. California’s voters recently increased the state’s investment in watersheds by passing Proposition 68, as did the state government. Given the urgency of the problems demonstrated in the past several years, it may be time for other water beneficiaries, such as water and hydroelectric power producers who rely on this water, to acknowledge their fair share of these watershed costs.

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