California Takes on Mandatory Water System Consolidation

In June, California’s Governor signed Senate Bill 88 into law.  The new law allows the State Water Resources Control Board (where the drinking water program is now housed) to “…require certain water systems that consistently fail to provide safe drinking water to consolidate with, or receive an extension of service from, another public water system. The consolidation can be physical or managerial.”

While the state has long encouraged voluntary consolidations or restructuring, the ongoing severe drought and resulting water emergencies experienced by both small and disadvantaged communities provides the impetus for this new direction.  The state has also said, “Consolidating public water systems and extending service from existing public water systems to communities and areas which currently rely on under-performing or failing small water systems, as well as private wells, reduces costs and improves reliability.  It does this by extending any development costs to a larger pool of ratepayers.”

The new process involves first providing technical assistance to analyze the problem and recommend a course of action for the distressed system.  Separate from enforcement-required actions, this process then creates a dialogue with the affected system and nearby public water systems.

Factors to be considered before any consolidation is undertaken include analyses of the capacity of the neighboring system; geographical separation; infrastructure improvement costs; costs and benefits to both systems; and access to financing for the resulting consolidated entity.  The two systems then have a six-month window to develop a consolidation plan.  Should that not happen, the State Board may order the two systems to consolidate.

Mandatory consolidation is dependent on several factors that must be addressed.  These include determinations that the system fails to provide safe drinking water; such consolidation is technically and economically feasible and provides the most efficient and cost-effective means for providing a safe water supply; and the capacity of the proposed interconnection is large enough to accommodate additional customers.  Outreach to affected customers must also occur before any consolidation can take place.

It will be interesting to follow the progress of this new California approach.  Some preliminary notices regarding consolidation have already been issued and the deliberative process has begun.

For more information about this California initiative, please visit the State Water Board’s website at http://www.waterboards.ca.gov/drinking_water/programs/compliance/index.shtml.  This link also includes a Fact Sheet that summarizes the new requirements, the process and the state’s legal authorities to act.

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