Peter Reichard: Dry times in Utah highlight importance of long-term water management

The importance of a rare commodity should be reflected in its price.

It’s when your throat is parched and you’ve been baking in the hot sun that you most appreciate a glass of cool, clear water. We appear to be in such a moment at a statewide level.

As of May 1, the 2020-21 winter snowpack in most of the state’s measured basins was well below median, and in some cases less than half of the median level. While one bad year may not plunge the whole state into a water crisis, it does mean an elevated risk of forest fires.

It also highlights the importance of long-term water management – and that may be a complex proposition. As the Utah Foundation pointed out in its Paying for Water Series, Utah contains a complex range of water policy stakeholders, including a variety of water users and beneficiaries, as well as at least 308 public water suppliers. These suppliers vary significantly in both their size and in the way they finance water service. In many places, there are even overlapping jurisdictions.

This fragmented approach may have its benefits, but it also means there is little state-level coordination of water planning and management. This is noteworthy, since water agencies are to varying degrees interdependent whether they like it or not. And in some cases, multiple agencies may be relying on the same resource, the availability of which could be strained by protracted drought. Because Utah is both one of the fastest-growing and driest states in the nation, the challenge of water management is a pressing matter.

As to the question of water conservation in particular, how we pay for water matters. To the extent that water providers rely on property taxes rather than water rates, they can keep water rates low. Some users may come out on the winning end of that arrangement. But it’s a well-established economic principle that the more an individual pays for a product, the less that individual will tend to use. Shifting the share of revenue generated through property taxes to water rates could encourage conservation. In addition, adjusting the rate structure to impose higher marginal rates for high-volume users could further leverage the impact of water rates on conservation.

Comparing our state’s water providers, the Utah Foundation revealed that, on average, providers with 10% higher rates have 6.5% lower water use. A greater dependence on use-based water rates (rather than property taxes) would generally tend to raise those rates and encourage conservation. While the impact might not be immediate, individual habits of water use would change as people learned ways to lower their water bills and average use would decrease over the longer term in significant ways.

A greater emphasis on water rates as the means for paying for water, coupled with a sensitively tiered rate structure, could do more than encourage conservation. It could lead to efficiencies at water agencies and buy those agencies time on building infrastructure. Generally speaking, conservation is the cheapest way to meet demand for water, followed by agricultural conversion. Building new infrastructure is far more expensive.

The burden of conservation extends beyond water agencies to the public and private sectors and individual Utahns. For local governments, that may mean providing for more xeriscaping in public spaces and allow more flexibility on the sizes and types of yards required. For individuals, that may mean significantly cutting down on watering lawns.

The Beehive State has a track record of working collaboratively on a number of fronts. Public action on air quality and in responding to the coronavirus crisis come to mind. We can apply that same spirit to water conservation.

Peter Reichard is president of the Utah Foundation, a nonpartisan, nonprofit public policy research organization. Reach him at peter@utahfoundation.org. Find Utah Foundation research on water management at utahfoundation.org.