Drought Management in a Changing Climate: Using Cost-Benefit Analyses to Assist Drinking Water Utilities

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Drought Management in a Changing Climate: Using Cost-Benefit Analyses to Assist Drinking Water Utilities Drought Management in a Changing Climate: Using Cost-Benefit Analyses to Assist Drinking Water Utilities Web Report #4546 Subject Area: Water Resources and Environmental Sustainability Drought Management in a Changing Climate: Using Cost- Benefit Analyses to Assist Drinking Water Utilities ©2015 Water Research Foundation. ALL RIGHTS RESERVED. About the Water Research Foundation The Water Research Foundation (WRF) is a member-supported, international, 501(c)3 nonprofit organization that sponsors research that enables water utilities, public health agencies, and other professionals to provide safe and affordable drinking water to consumers. WRF’s mission is to advance the science of water to improve the quality of life. To achieve this mission, WRF sponsors studies on all aspects of drinking water, including resources, treatment, and distribution. Nearly 1,000 water utilities, consulting firms, and manufacturers in North America and abroad contribute subscription payments to support WRF’s work. Additional funding comes from collaborative partnerships with other national and international organizations and the U.S. federal government, allowing for resources to be leveraged, expertise to be shared, and broad-based knowledge to be developed and disseminated. From its headquarters in Denver, Colorado, WRF’s staff directs and supports the efforts of more than 800 volunteers who serve on the board of trustees and various committees. These volunteers represent many facets of the water industry, and contribute their expertise to select and monitor research studies that benefit the entire drinking water community. Research results are disseminated through a number of channels, including reports, the Website, Webcasts, workshops, and periodicals. WRF serves as a cooperative program providing subscribers the opportunity to pool their resources and build upon each other’s expertise. By applying WRF research findings, subscribers can save substantial costs and stay on the leading edge of drinking water science and technology. Since its inception, WRF has supplied the water community with more than $460 million in applied research value. More information about WRF and how to become a subscriber is available at www.WaterRF.org. ©2015 Water Research Foundation. ALL RIGHTS RESERVED. Drought Management in a Changing Climate: Using Cost- Benefit Analyses to Assist Drinking Water Utilities Prepared by: Julie Blue, Richard A. Krop, Nupur Hiremath, Carolyn Gillette, and Jaime Rooke The Cadmus Group, Inc., 100 5th Avenue, Suite 100, Waltham, MA, 02451 and Cody L. Knutson and Kelly Smith National Drought Mitigation Center, University of Nebraska-Lincoln, 819 Hardin Hall, 3310 Holdrege Street P.O. Box 830988 Lincoln, NE 68583–0988 Jointly Sponsored by: Water Research Foundation 6666 West Quincy Avenue, Denver, CO 80235-3098 and National Oceanic and Atmospheric Administration Climate Program Office Sectoral Applications Research Program (NOAA/CPO/SARP) Washington, D.C. Published by: ©2015 Water Research Foundation. ALL RIGHTS RESERVED. DISCLAIMER This study was funded by the National Oceanic and Atmospheric Administration’s Climate Program Office’s Sectoral Applications Research Program (NOAA/CPO/SARP) and the Water Research Foundation (WRF), under Grant No. NA13OAR4310125. NOAA/CPO/SARP and WRF assume no responsibility for the content of the research study reported in this publication or for the opinions or statements of fact expressed in the report. The mention of trade names for commercial products does not represent or imply the approval or endorsement of NOAA/CPO/SARP or WRF. This report is presented solely for informational purposes. Copyright © 2015 by Water Research Foundation ALL RIGHTS RESERVED. No part of this publication may be copied, reproduced or otherwise utilized without permission. Printed in the U.S.A. ©2015 Water Research Foundation. ALL RIGHTS RESERVED. TABLE OF CONTENTS LIST OF TABLES .......................................................................................................................... ix LIST OF FIGURES ........................................................................................................................ xi FOREWORD ................................................................................................................................xiii ACKNOWLEDGMENTS ............................................................................................................. xv EXECUTIVE SUMMARY ......................................................................................................... xvii Chapter 1: THE IMPACTS OF DROUGHT ON DRINKING WATER UTILITIES ................... 1 1.1 Occurrence of Drought in the United States ............................................................... 1 1.2 Broad Impacts of Drought ........................................................................................... 4 1.3 Impacts of Drought on Drinking Water Utilities and Customers ................................ 5 1.3.1 Decreased Supply ..............................................................................................5 1.3.2 Increased Demand .............................................................................................6 1.3.3 Impact on Water Infrastructure .........................................................................7 1.3.4 Water Quality Degradation ...............................................................................9 1.4 Drought Management ................................................................................................ 10 1.5 Use of Cost-Benefit Analyses in Drought Planning .................................................. 13 Chapter 2: THE COSTS AND BENEFITS OF DROUGHT MANAGEMENT .......................... 15 2.1 Costs of Drought Impacts .......................................................................................... 15 2.1.1 Costs of Water Infrastructure Impacts ...........................................................15 2.1.2 Costs of Water Quality Impacts .....................................................................16 2.1.3 Costs of Water Reliability ..............................................................................17 2.1.4 Costs of Land Subsidence ..............................................................................18 2.1.5 Revenue Losses ..............................................................................................19 2.2 Leading Practices in Drought Management and Their Costs .................................... 20 2.2.1 Demand Management ....................................................................................22 2.2.2 Supply Management ......................................................................................33 2.3 Benefits of Drought Management Practices .............................................................. 39 2.3.1 Implementing Avoided Cost Assessments....................................................40 2.3.2 Assessing the Triple Bottom Line.................................................................41 2.4 Summary and Conclusions ........................................................................................ 42 Chapter 3: CASE STUDIES ON WATER UTILITY EXPERIENCES WITH DROUGHT ........ 43 3.1 Case Study 1: A Multi-Pronged Approach to Drought Management in El Dorado, CA CA ............................................................................................................................. 43 3.1.1 Background ......................................................................................................43 3.1.2 Impact of Drought ............................................................................................44 3.1.3 Response to Drought ........................................................................................44 3.1.4 The Costs of Drought Mitigation and Response ..............................................45 3.1.5 Looking Forward .............................................................................................47 3.2 Case Study 2: Revenue Dilemma in Managing Drought in Cobb County, GA ........ 48 v ©2015 Water Research Foundation. ALL RIGHTS RESERVED. 3.2.1 Background ......................................................................................................48 3.2.2 Impact of Drought ............................................................................................48 3.2.3 Response to Drought ........................................................................................49 3.2.4 The Costs of Drought Mitigation and Response .............................................50 3.2.5 Looking Forward .............................................................................................51 3.3 Case Study 3: Focusing on Outreach Campaigns in San Diego, CA ........................ 52 3.3.1 Background ......................................................................................................52 3.3.2 Impact of Drought ............................................................................................53 3.3.3 Response to Drought ........................................................................................53 3.3.4 The Costs of Drought Mitigation and Response .............................................54 3.3.5 Looking Forward .............................................................................................55 3.4 Case Study 4: Adapting Drought Management Techniques Over Time in o Colorado ...................................................................................................................
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