Arizona’s on the hunt for new water, and it won’t be cheap.
Tony Davis covered this week’s meeting of the folks working on the program with one of my all time favorite government acronyms – Project ADD Water (that’s Acquisition, Development and Delivery). It’s the planning effort among Central Arizona Project players to find new sources of water to slake their state’s thirst. As Tony reports, it won’t be cheap:
David Modeer, the former Tucson Water director who now is CAP’s general manager, said the additional supplies’ costs aren’t known for sure today. But desalinated brackish groundwater could cost $500 to $600 an acre-foot, for instance. Buying water from farmers along the Colorado could cost up to $3,000 to $6,000 an acre-foot, he said.
“Modeer said he didn’t know exactly how much more the costly water would increase a utility customer’s monthly bill.
(A note of confusion – are Modeer’s numbers for buying water rights from farmers a single years’ worth of water, or is that the cost of transferring a permanent water right?)
The most interesting thing to me is the simple fact that such a process exists in Arizona. I was in Phoenix last fall and went to one of the ADD Water meetings. What you had was a group of people getting together once a week from all the different water agencies to talk about how to address their long term water needs.
Note to my New Mexico friends with whom I’ve been discussing this – As important as the particular solutions they might come up with is the fact that they’re engaged in a serious conversation, with institutional players at the table, week after week.
I was considering a post on this topic given the reference to greywater as a cost saving measure in a related article:
But with all the talk about water pricing and water auctions, I figured Aguanomics would be all over it. Instead he had a cow over the *republicans*. A lost opportunity for another lecture on water markets.
But the quoted prices for purchasing water from farmers still sound cheap per acre-foot compared to some prices being paid elsewhere in the west such as in central Utah.
@RWC — here I am. (My cow was not over republicans, but *idiots*. I know the difference. Moo!)
This ADD thing is SCREAMING for someone to talk about the demand side. These managers are really going to have a hard time cutting water shortages if they only use ONE SIDE of the scissors.
@RWC — prices from other places are irrelevant, as long as their markets are not integrated (no arbitrage).
DZ – I thought CUP and CAP were integrated by the Colorado River. My mistake.
The “water market” part of this is only half the story. CAP must go into the “market” to acquire the water rights, but once secured that water will be provided at cost of delivery – and postage stamp pricing at that. What really amazes me about the ADD process is that they have spent two years discussing how to allocate that extra water, how to pay for additional infrastructure to move that water, and a variety of contracting issues – basically who will get the water and how they will pay for it. They have identified a menu of options for additional water but haven’t even begun the process of negotiating for that water or even deciding what water they will seek to acquire first. That won’t happen for another couple of years. Can you say… “transaction costs”?