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SFPUC approves amended 25‑year wholesale water supply agreement, including interim supply limits and conservation measures
Summary
The commission approved a 25‑year wholesale water sales agreement April 28 with interim supply allocations through 2018, a proposed environmental enhancement surcharge if supply limits are exceeded, a transfer market for allocations, and financial changes moving to a cash‑funded approach; commissioners added four amendments urging conservation best practices, public reporting, per‑capita allocation considerations and watershed carrying‑capacity analysis.
On April 28 the San Francisco Public Utilities Commission voted to approve a 25‑year wholesale water supply agreement with wholesale customers, as recommended by staff and negotiated with the Bay Area Water Supply and Conservation Agency (BOSCA). The approval included four amendments adopted by the commission.
Deputy General Manager Michael Carlin described the agreement’s central elements: an interim supply framework that collectively allocates about 265 million gallons per day (MGD) in normal conditions—approximately 184 MGD to wholesale customers and 81 MGD to San Francisco retail customers—through 2018, with the interim limit and related measures subject to public process and environmental review before any changes after 2018. The agreement embeds the commission’s previously adopted drought management plan and includes mechanisms for administering shortages, an environmental enhancement surcharge applicable if the 265 MGD threshold is exceeded, and a transfer market to allow agencies to buy and sell supply assurances among themselves.
Financial provisions move the agreement away from a long‑term depreciation approach to a cash‑based cost allocation to align debt repayment with the costs of large capital projects. Wholesale customers will repay a proportionate share of undepreciated assets over a 25‑year schedule at an interest rate disclosed in the presentation; the term includes the possibility of two 5‑year extensions. The contract includes provisions for calibrated drought pricing and emergency pricing, subject to commission declarations and public process.
Representatives of BOSCA and several environmental groups spoke in support but also urged more explicit conservation commitments. Public commenters stressed CEQA/environmental review concerns and warned of impacts on San Francisco growth if future allocations reduce retail shares. Commissioners introduced and adopted four amendments directing (1) wholesale customers to implement California Urban Water Conservation Council best practices, (2) monthly public reporting of wholesale usage on the SFPUC website, (3) consideration of per‑capita use when establishing interim allocations, and (4) studying watershed carrying capacity and climate uncertainty when deciding future allocations.
With the amendments inserted after the third resolved clause, the commission passed the amended resolution by recorded voice votes. Staff and the wholesale negotiators indicated the amendments were acceptable and the commission thanked staff and negotiators for the multi‑year negotiation effort. The resolution’s approval directs staff to implement the contract consistent with the amendments and continue annual reporting and public processes required by the agreement.
