Pricing Can Help Solve Whatcom Water Problems

Clean, affordable, sufficient water is essential for all life. Every household, business and farm needs water, as do fish, wildlife and vegetation. It is therefore crucial that we understand the extent and nature of our water problems and move quickly and effectively to address them.

Although rain and snow are abundant in Whatcom County,1 we still have serious water issues. This article briefly explains how we use water and then discusses these problems and potential solutions, and proposes a new tool to help solve these problems – locational and time-sensitive pricing of water.

How Much Water Do We Use?

We used about 33 billion gallons of water in Whatcom County in 2005 — 57 percent from surface water and the rest from groundwater (wells).2 Irrigation is, by far, the largest water user, accounting for 41 percent of the total. Industry uses 25 percent; homes 19 percent; livestock 6 percent; and aquaculture, mining and commerce account for the remainder (Table 1 on page 10). These numbers ignore the amount of water that must be left for instream flows in the creeks and rivers for other beneficial purposes such as navigation, fish (including salmon) and wildlife, recreation, aesthetics and waste assimilation.

These average figures are incomplete because first, they don’t account for return flows,3 and second, consumption and precipitation vary widely by season. Summer (July through September) use, for example, is 87 percent greater than average use, and winter (November through January) use is only 45 percent of average use. As shown in Table 1, water use is four times greater during the summer than during the winter.

This tremendous seasonal difference is driven primarily by irrigation; its share of summer use is much greater than its share of annual use: 59 percent vs. 41 percent. Residential, commercial and industrial summer usages are also greater than their averages. For example, residential usage is almost one-third higher than its average, primarily because of lawn watering and other outdoor uses.

Average rainfall in the summer is 1.4 inches a month compared with 4.9 inches in the winter months. Winter flow rates in the three forks of the Nooksack River are three to six times greater than they are during the summer.4

Overall, summer supply is 29 percent of winter supply, while summer demand is 400 percent of winter demand. Monthly summer rainfall is 47 percent of the average annual monthly precipitation, and monthly summer consumption is 187 percent of the average annual monthly consumption (Table 2 on page 11).

What Are Our Local Water Problems?

Whatcom County has both supply and quality problems.5 Some streams and bays are polluted with fecal coliform bacteria from failing septic tanks, livestock and wild animals. Urban stormwater runoff contains toxic metals, petroleum and other pollutants. Herbicides, pesticides, and fertilizers from farms and homes also pollute.

As the Northwest Indian Fisheries Commission notes, “[tribal stories document] environmental change resulting from increased population growth, polluted stormwater runoff, climate change, urban growth and the diking, filling and armoring of our rivers, estuaries and shorelines. These factors have, over time, led to a transformation of the landscape that degrades the ecosystem functions necessary to provide the cool, clear, free-flowing water that salmon need.” 6

In addition, summer flows in the Nooksack River and many of its tributaries are below the minimum requirements set by the Washington Department of Ecology: “From 1986 to 2009, flows in the Nooksack River failed to meet instream flow-rule requirements 72 percent of the time during the July-September flow period.” 7, 8

These quantity and quality problems interact. Keeping more water in the creeks and river, for example, will reduce the adverse effects of water pollution. Expanding buffer areas and reforesting riparian areas will improve water quality, encourage greater salmon populations and partially offset the need for greater instream flows.

These water problems will get worse for three reasons:

• Natural population growth: Historical trends and official forecasts show Whatcom County population growing by 1.1 percent a year over the next 30 years (by almost 84,000 people).9

• Local effects of global climate change: Increases in greenhouse-gas emissions will shrink the glaciers and reduce the amount of snow on Mt. Baker (reducing total water supply in the Nooksack River), melt snow earlier in the spring (leading to more flooding), and melt less snow in the summer (leading to water shortages and droughts). 10, 11

• Effects of climate change elsewhere: 12As other areas in the western U.S., especially the Southwest, experience less rainfall and more frequent droughts, their residents will increasingly move to the Pacific Northwest.

In addition, if the proposed coal-export terminal at Cherry Point is approved and built, water consumption could increase by 2 billion gallons a year, roughly 5 percent of total county water use.13

Possible Solutions to These Problems

These problems are complicated and longstanding. Therefore, the solutions will likely be expensive, controversial and complex. They may require greater enforcement of existing regulations and new regulations of land use, water consumption and pollution levels. They will also require public education, voluntary actions and demonstrations of various systems that help solve these problems.

Growth-management regulations (e.g., the county’s comprehensive plan) might restrict developments in areas that face serious water supply and/or quality problems or require full mitigation for new developments. The county could fully enforce its existing water-quality and land-use regulations and adopt stricter requirements on septic-system inspections and agricultural releases of water pollutants — keeping livestock away from creeks and rivers, managing fertilizers and manure more carefully. The county could require better stormwater management practices and provide greater protection for critical areas that are geologically hazardous, frequently flooded, aquifer recharge zones, wetlands and wildlife habitat and migration corridors.

Municipal governments and water districts could modify rate schedules to encourage greater efficiency in water use. Lynden has a $150 penalty for “waste of water.” They could add surcharges to help pay for solutions to water problem. Bellingham charges its water users to buy land in the Lake Whatcom watershed; single-family homes in Bellingham pay $12 a month for this program.15

Who Will Decide On The Solutions?

Directly and indirectly, water quality and use are governed by a multiplicity of federal, state, and local laws. The courts are also certain to be involved in these decisions. In particular, the implications of Native American treaty rights established during the 1850s will be determined in Federal courts, based on requests and possibly lawsuits from the United States on behalf of the Lummi Nation and Nooksack Indian Tribe or by the tribal governments themselves.16

The Washington Dept. of Ecology will apply state water law to identify and mandate solutions to these problems. Municipal governments will play key roles, largely because they operate water utilities. County government plays a role in its regulation of land use and oversight of public health (including water quality and septic systems). Local water districts and associations will also be involved in solving these problems.

Citizens acting alone and in groups can address these problems. For example, the Ten Mile Creek Water Project is a group of people who work together to address and solve water-quality problems on Ten Mile, Deer and Four Mile creeks.17

Traditional market forces, as discussed below, could play an important role in encouraging consumers to use water more efficiently, both in time and space. Pricing can also generate much needed revenue to help implement solutions.

How Much Do We Pay For Water Now?

In fact, nobody actually pays for water. Instead, we pay for the pumps, pipes, treatment plants, electricity, supplies and people to build, operate and maintain water systems. But the water itself is free, which is remarkable-given how valuable water is in our lives.

The typical Bellingham or Lynden resident pays almost $60 per month in fixed charges for water, sewer, and stormwater management and his/her bill includes $15 to $20 per hundred cubic feet (CCF) of water used.18 A typical family of four might use about 200 gallons of water per day plus another 30 gallons per day for outdoor use in the summer.19

Industrial rates are much lower, primarily because large industries (e.g., the two oil refineries and aluminum smelter at Cherry Point) use much more (and lower quality) water than do homes. PUD #1 charges its largest customers $2.75 per million gallons plus fixed charges, equivalent to $1.08 per CCF.

How Pricing Might Help Resolve Issues

Adding a fee or tax to all water used in Whatcom County would yield three major benefits:

1. Locational and time-differentiated prices would provide important signals to users about where and when water is relatively scarce (and therefore expensive) and relatively plentiful (and therefore cheap), using markets and the adaptability of the private sector to solve problems. These price signals would encourage water users to make capital improvements and behavioral changes to increase efficiency of water use. These changes, operating through normal market forces, would reduce the pressure on water supplies.

2. Much Whatcom water use for agriculture is now unmetered. Installing meters for most of the currently unmetered water users would provide valuable data on water-use patterns and trends.20, 21

3. The fee or tax would generate revenue that could be used to help solve local water supply and quality problems. For example, a countywide charge of 0.075 cents per CCF (0.01 cent per gallon) for summertime water use would generate $1.5 million a year.22

A charge of 0.075 cents per CCF is less than a 1 percent rate increase for large industrial customers; it would amount to less than $3 a year for the typical Whatcom County family. The agricultural sector, because it accounts for two-thirds of summer water use, would pay about $1 million a year for this surcharge. This increase in operating costs is less than 1 percent of the value of Whatcom County agricultural products ($357 million in 2012).23

If such a pricing scheme is adopted, it should probably be phased in over a few years. For example, increasing the fee from 0.0375 cents per CCF in the first year and by 0.0375 cents each of the next three years would yield almost $8 million over four years that could be used to solve local water problems, and a final fee of 0.15 cents per CCF. As a comparison, Whatcom County currently spends about $4.5 million a year on water quality projects, including watershed planning, salmon and shellfish, and stormwater management (to protect Lake Whatcom and Birch Bay).24 Recent proposals from the County Executive and Chair of the County Council would add about $2.5 million a year for such projects.25

Raising the price of water through a tax or fee reduces the need for regulation because the price increase spurs market forces to automatically and appropriately allocate water among competing uses.

Prices could also vary geographically. In areas where groundwater is only weakly connected to surface waters, prices would be lower than in areas where groundwater is hydraulically connected to surface flows. Differentiating prices by location would require additional data and analysis of ground-water flows and hydraulic connectivity, basin by basin, within the Nooksack River watershed. Groundwater modeling is needed to show the temporal relationship between withdrawal of groundwater and its return downstream to surface waters. This relationship will differ among watersheds because of geology and soils, as well as depth to aquifer.

Higher prices will encourage water efficiency often in ways we cannot now predict. As examples, low-flow toilets and front-loading washing machines26 use one-third to two-thirds less water than their conventional counterparts. More efficient equipment that is also more expensive to buy now might become cost-effective later with higher water prices. Efforts to detect and repair leaking water systems will be more cost effective and, therefore, more likely to be adopted, as will reuse of treated wastewater for nonpotable uses.

Seasonal water pricing would encourage homeowners to water their lawns less often, for shorter times, and at times of the day when the lawn can better absorb the water. “The best time of day to water your lawn is before 10 a.m. or after 10 p.m. Either option will give your lawn the chance to thoroughly absorb the water before it begins to evaporate under the hot sun.”27

Farmers could offset higher water prices by developing more efficient irrigation systems. Those systems could apply water more carefully timed to minimize evaporation and runoff and maximize absorption by the soil and plants. Other low-pressure systems apply water closer to the plants.

Water supply and quality are partial substitutes for each other. Thus, improving one can reduce pressures on the other. Water conservation stimulated by higher prices is, in a sense, mitigation of water-quality issues — more water left in streams and rivers reduces the adverse effects of pollution. Conversely, improving streamside conditions by planting shade trees and creating larger setbacks can allow more water withdrawals without jeopardizing fish.

Is This Approach Practical?

Many water utilities already use rate structures that charge more for water with increasing usage, known as an increasing-block-rate structure, including Seattle, Ferndale, and Lynden. Lynden uses a three-step structure, with a surcharge for high residential water use of $1.29 per CCF.28 In addition, 17 cities in Arizona charge 0 to 7.5 cents per CCF extra for the last block of high water consumption than the first block, with an average increment of 2 cents per CCF (25 times greater than the tax proposed above).29 One city in Utah charges 0.6 cents per CCF more for summer use than for winter use (eight times greater than the tax proposed above).30 The Las Vegas Valley Water District has a similar multi-tier pricing system to encourage water conservation.31

Time and/or location based pricing is also used in electric systems and to relieve congestion in transportation systems. Two toll bridges in Florida use variable pricing. Bridge travelers get a 50 percent discount on their toll if they shift travel from peak to off-peak periods.32

Electricity prices can vary enormously from hour to hour because of changes in demand, the mix of facilities and fuels used to generate power, and transmission constraints that prevent power from being moved from low-cost generators to demand centers.33

Limitations of Proposed Pricing Solution

Although water pricing might help solve local problems, it is not a panacea. Environmental protection (including instream flows for salmon and other fish) may not be amenable to pricing; fish don’t have money. Similarly, pricing may not help in directly solving water quality problems, even though it can help with water quantity problems. As examples, pricing will not reduce fecal coliform bacteria from poorly operating septic systems and improper manure management.

Implementing the tax proposed here would require the county to establish a new system of meter installation, meter reading and billing. To reduce costs, the county could meter a random sample of rural households served by wells. Rural homes without a meter would pay the water tax based on an upper estimate of rural residential water use during the summer months based on those homes that are metered.

Installing meters on agricultural uses34 that are now not metered plus 10 percent of the rural wells35 (about 2,000 meters in all) could cost as much as $2 million.36

In addition, periodic meter reading and the preparation and distribution of water bills also cost money.37

Another issue is whether and how to treat aquifer recharge. Some of the water withdrawn returns to the system, generally downstream and later.38 Should water users get “credit” for this return, and if so how much? The answer depends on the locations of water withdrawal and return, and the amount, quality and temperature of the returned water.

Perhaps the largest obstacle to this proposal is the likely political opposition to a new fee or tax. However, taxing water may be less unpopular than other, more stringent regulatory approaches to solving our water problems.

The use-it-or-lose-it aspect of state water law might require those who conserve water to relinquish the conserved portion, in essence punishing those who improve their efficiency of water use.39 Much would depend on how the Department of Ecology interprets its authority and responsibility under this law.

Finally, Washington State law may not allow counties to tax water consumption, in part because counties are not water purveyors. However, counties might be able to form special districts similar to our Flood Control Zone District that could impose an excise tax on water use.

Conclusions

Whatcom County has serious water supply and quality problems. These problems are complicated, interactive and long-term. They will likely get worse as population grows and the local effects of global climate change increase.

Solutions to these problems will require new policies, programs, and regulations from all levels of government and from families, farmers, and businesses. Adding a fee or tax to each gallon of water consumed in Whatcom County could help address these problems. The tax or fee would provide important market signals on when and where to consume water and when and where to conserve. The tax would encourage greater efficiency in water use during the critical summer months, of value in its own right and a “resource” that can be used to address water allocation when the Federal government determines Lummi and Nooksack rights to minimum instream flows. The revenues collected could be used to help solve local water problems. Finally, the meters required to measure water use would provide valuable information on where, how, and when water is used in Whatcom County; this information will help develop better policies and programs to address water supply and quality issues.

Acknowledgments

I thank Doug Allen, Henry Bierlink, Kate Blystone, George Boggs, Ryan Ericson, Jeremy Friemund, Annette Holcomb, Jon Hutchings, Steve Jilk, Jean Melious, Skip Richards, David Stalheim, John Turnbaugh, Bert Webber, and Carl Weimer for reviewing drafts of this paper. I also thank Jon Hutchings and Anitra Accetturo (City of Bellingham), Steve Banham (City of Lynden), Ann Grimm and Annette Smith (PUD #1), and Henry Bierlink (Whatcom Farm Friends) for providing me with data on local water uses and for helping me understand what the data mean.

1. Bellingham gets an average of 36 inches a year; Phoenix, Arizona, gets only 8. Precipitation in the eastern portion of Whatcom County is much greater than in the western low-lying areas.

2. R.C. Lane, Estimated Water Use in Washington, 2005, U.S. Geological Survey, No. 2009-5128, 2009. I have been able to find little data showing how Whatcom water-use allocations and trends have changed over time. The Geological Survey plans to publish a report on 2010 water use in Washington in late 2014.

3. Some of the water withdrawn from the system is returned, although later in time, downstream of its withdrawal, and possibly with different water quality and temperature characteristics.

4. U.S. Geological Survey data for Nooksack River at Ferndale, WA.

5. The Growth Management Hearings Board identified more than a dozen specific water problems; see Growth Management Hearings Board, Western Washington Region, Final Decision and Order, Case No. 12-2-0013, June 7, 2013, page 23-28, “Evidence Showing Water Quantity and Quality Problems.”

6. Northwest Indian Fisheries Commission, 2012 State of our Watersheds, p. 3, August 2012. See also Whatcom County Public Works Department, Executive Summary of the WRIA 1 Salmonid Recovery Plan, June 2005.

7. Northwest Indian Fisheries Commission, 2012 State of our Watersheds, p. 73, August 2012.

8. Low flows affect the mechanical, thermal, and chemical environment in which fish swim, i.e., slower currents, warmer temperatures, and higher concentrations of pollutants.

9. Berk and Associates, Whatcom County Population and Employment Projections and Urban Growth Area Allocations, November 1, 2013.

10. According to the U.S. National Climate Assessment, Climate Change Impacts in the United States, May 2014, “Changes in the timing of streamflow related to changing snowmelt have been observed and will continue, reducing the supply of water for many competing demands and causing far-reaching ecological and socioeconomic consequences.” http://nca2014.globalchange.gov/highlights/regions/northwest

11. Susan E. Dickerson, Modeling the Effects of Climate Change Forecasts on Streamflow in the Nooksack River Basin, MS Thesis, Western Washington University, Bellingham, WA, May 2010.

12. According to “Drought Watch,” California, Nevada, Utah, and New Mexico are experiencing extreme or exceptional drought (High Country News, May 26, 2014). Where will these people go if the droughts continue?

13. B. Burr, “Election View: Burr unhappy with PUD involvement in Gateway terminal,” The Bellingham Herald, July 18, 2014. http://www.bellinghamherald.com/2014/07/18/3746372/election-view-burr-unhappy-with.html

14. City of Lynden, Water Rates, Effective June 1, 2014. http://www.lyndenwa.org/wp-content/uploads/2012/07/Utility-Rates-and-Fees-as-of-June-1st-20141.pdf.

15. Lake Whatcom Watershed Land Acquisition and Preservation Program Charge, http://www.cob.org/documents/pw/utilities/2014-metered-utility-rates.pdf

16. Lummi Indian Business Council, “Litigation Request to Protect Lummi Nation Treaty and Fishing Rights,” letter to U.S. Dept. of the Interior, June 6, 2011.

17. Bellingham Herald, “Panel to discuss Ten Mile Creek,” p. A5, June 10, 2014.

18. A cubic foot is equivalent to 7.48 gallons.

19. City of Bellingham, Residential Water Consumption Calculator, https://www.cob.org/services/utilities/water-calculator.aspx. Households in the smaller cities and rural areas use more water than do homes in Bellingham because of larger house and lot sizes.

20. The Washington State Department of Health says that installing meters is the most important step in running a water use efficiency program; see Water Use Efficiency Guidebook, Third Ed., June 2011. http://www.doh.wa.gov/Portals/1/Documents/Pubs/331-375.pdf

21. In 2003, the Washington State Legislature passed Engrossed Second Substitute House Bill 1338, known as the Municipal Water Law. This law requires municipal utilities to install meters for all their customers by January 2017. It seems reasonable to extend this requirement to all water users, not just utility customers.

22. Water use during the three summer months is 47% of total use, 15 billion gallons a year.

23. www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_2_County_Level/Washington/)

24. Gary Stoyka, personal communication, Whatcom County Department of Public Works, June 2014.

25. Carl Votes, July 20, 2014, http://carlvotes.blogspot.com

26. A front-loading machine uses about 15 gallons per wash, compared with about 50 gallons for a top-loading machine. (http://statestreetdiscount.com/articles/display.php?aid=6.)

27. www.ask.com/explore/what-best-time-water-lawn

28. City of Lynden, Water Rates, Effective June 1, 2014.

29. Western Resource Advocates, Arizona Water Meter, A Comparison of Water Conservation Programs in 15 Arizona Communities, October 2010. www.westernresourceadvocates.org/water/azmeter/report.pdf

30. Western Resources Advocates and Utah Rivers Council, Water Rate Structures in Utah: How Utah Cities Compare Using This Important Water Use Efficiency Tool, January 2005. www.westernresourceadvocates.org/media/pdf/Utah%20Water%20Rate%20Analysis%20-%20300dpi.pdf

31. www.lvvwd.com/custserv/billing_rates.html.

32. U.S. Department of Transportation: www.etc.dot.gov/usexamples.htm.

33. PJM Interconnection: www.pjm.com/markets-and-operations/energy/real-time/lmp.aspx.

34. Henry Bierlink, personal communication, Whatcom Farm Friends, May 28, 2014, based on 1,700 farms as of 2012.

35. As of 2011, Whatcom County had about 12,000 exempt wells, up from 3,300 in 1986 (Northwest Indian Fisheries Commission, 2012 State of our Watersheds, p. 80, August 2012).

36. The cost in Bellingham to purchase and install remotely-read meters is roughly $1,000 per meter (Bob Bandarra, City of Bellingham Public Works Dept., May 12, 2014, personal communication).

37. A less expensive alternative would have consumers read their own meters and report the readings via internet to a central clearinghouse; officials would independently read meters at the beginning and end of the summer to verify accuracy. Also, advances in computing and communications permit low-cost remote reading of meters.

38. Water usage in July, the most water-intensive month in the Lower Nooksack basin, is 275 cubic feet per second (cfs) and return is 75 cfs; i.e., most water is not returned, from C. Bandaragoda et al., Lower Nooksack Water Budget Overview, Whatcom County, WRIA 1 Joint Board, 2012, pages 11 and 15.

39. See RCW 90.14, “Water Rights – Registration – Waiver and Relinquishment, etc.” http://apps.leg.wa.gov/rcw/default.aspx?cite=90.14