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SFPUC, BOSCO outline drought-allocation framework and banking; commissioners ask for transparency

San Francisco Public Utilities Commission · February 23, 2010
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Summary

SFPUC and BOSCO described a tiered allocation approach for drought (Tier 1: SF vs. wholesale share; Tier 2: allocations among wholesale customers), banking of unused allocations, and excess-use charges. BOSCO urged a simple, administrable formula and warned that agency contractual rights cannot be reallocated without consent.

Steve Ritchie, SFPUC assistant general manager for water, briefed the commission on the recently negotiated water-supply agreement with wholesale customers and explained how supplies would be allocated in shortage. Ritchie described a Tier 1 allocation that assigns San Francisco a percentage share of available supplies (that percentage varies with the level of rationing; staff cited roughly 35–38% to San Francisco depending on rationing level) and Tier 2 allocations that the wholesale customers would determine among themselves or that BOSCO could set by majority vote if the agencies cannot reach unanimous agreement.

Ritchie said the agreement allows "banking" of unused allocations in drought and transfers between parties with agreement; it also authorizes the SFPUC to levy excess-use charges in rates for customers who exceed their allocation during shortage. He and BOSCO counsel said allocations would typically be declared around late April if a drought is imminent, but the agreement does not set a fixed calendar deadline.

Art Jensen of BOSCO told the commission BOSCO’s role is to develop a practicable formula that agencies will accept: it must provide certainty, incentivize conservation and alternative supplies, avoid reallocating assets without consent, and be simple enough to be understood by 26 governing bodies. Jensen said BOSCO has been reviewing 15 candidate methods and is converging on a preferred approach; he expected meetings of agency representatives and a BOSCO Board report in March.

Commissioners asked how allocations will be monitored and appealed. BOSCO and SFPUC staff said allocations and monthly distribution would be tracked through billing and system meters, agencies could appeal allocation details, underusers would accumulate banked credits and could transfer them to overusers with agreement, and overuse could trigger excess charges and public notice (Jensen said public naming in the press was a reputational disincentive). Ritchie said the SFPUC already produces monthly and weekly system-meter feedback and that the billing process provides continuous monitoring.

Public commenters pressed for clarity. David Pilpel asked whether suburban wholesale customers had responsibility for identifying and reducing unaccounted-for water (UFW); SFPUC staff said utilities have financial incentives to reduce UFW and that the subject is standard utility practice. Peter Drechmeier urged exploring cap-and-trade style mechanisms tied to per-capita allocations to encourage conservation and transfers among agencies.

BOSCO and SFPUC staff committed to continue the deliberations, report back to the BOSCO Board and the PUC, and provide materials on methodology options once staff and agencies finalize recommendations.