Friday, February 24, 2012

Rule of Capture Wins again in Texas

Another loss for the prospect of sensible groundwater regulation in Texas.

Article on the value of property rights and markets to deal with uncertainty in water management

I came across a link to this article on the PropertyProf Blog - a great source of scholarly research and other fun stuff dealing with property law.  This one comes from Jonathan Adler, professor at Case Western Reserve Law School and also a contributor to the Percolator blog from the Property and Environment Research Center (PERC) - a great resource for finding solutions to environmental problems that incorporate private property concepts.

The article is titled Water Rights, Markets, and Changing Ecological Conditions.  Here's a link to the SSRN page that it can be downloaded from.  In it he tries to lay out the reasoning to support increased reliance on private property rights and market mechanisms to deal with uncertainty in water management resulting from factors like climate change.  Should be well worth reading.

Friday, February 17, 2012

Attack of Return of the Son of Painted Hills

Just when we thought it was safe to venture into the desert west of downtown Tucson --- the Dallas Police and Firefighters Pension fund has found a new ally to support their plans to develop "pristine" desert in the shadow of downtown Tucson and at the doorstep of the mighty Tucson Mountains Association.  They have gone to our friends in the state house up in Phoenix for a quick legislative fix to their problem of Tucson Water not wanting to supply the wet stuff to the houses they wish to build.  This was a big deal around these parts back in 2010 - I posted on it a couple of times back then.

Sunday, February 12, 2012

So What's the Hold-up?

From today's Arizona Daily Star, an article about the Vail (AZ) Water Company facing the prospect of refunding to it's customers the money it has been collecting for over 10 years to pay for a means of taking their allocation of CAP water.  Vail is about as far away from the CAP canal as you can get while still being technically within the Tucson area.  This makes it a challenge to get that water to their customers.  But in recent years the City of Tucson (and their water company) has been pursuing wheeling agreements that allow other water utilities to take their CAP water by having Tucson Water deliver it through the city's pipes to a point where the other utility can access it without having to build large delivery infrastructure of their own.  They have done this recently with Oro Valley and are working on doing something similar with Metro Water.

So why doesn't Vail do something similar, or at least why haven't they done so to comply with the agreement they made with the Corporation Commission?  A couple of ideas come to mind.  While the idea of doing wheeling agreements with Tucson Water has been discussed for several years, it's only within the last 2 or 3 years that the idea has begun to be looked at really seriously.  Earlier, utilities like Metro and Oro Valley were considering plans to take the CAP water themselves, possibly by building a treatment plant and pipes to deliver it themselves.  The cost of doing so was simply prohibitive.  I'm sure Vail at least thought about doing something similar at one time.  But they are a pretty small utility - only about 3,900 connections - so the cost of building that kind of infrastructure (at least 20 miles from the nearest point where they could tap into the CAP) would be pretty high per customer. 

The article suggests that wheeling had been considered previously, but Tucson Water wasn't that interested.  There is likely some truth to that.  Tucson Water had a reputation for many years of not wanting to play nice with others - deserved or not.  I also think that for a small company like Vail Water the cost of pumping groundwater is much less than they would have to pay for CAP water, so the prospect of coming into compliance and having to hit their customers with a big rate increase wasn't real attractive.  It's also likely that Tucson Water will have to upgrade some of their infrastructure in the vicinity of Vail to accommodate the extra water and Vail Water would have to pick up most, if not all, of the tab for that.  So even a wheeling agreement is not cheap - Vail may have just been counting the beans and deciding to continue pumping from their wells.

So solutions are not easy to come by in this situation.  But I do know for sure that a solution is extremely important in this case.  Because in the near vicinity of the rapidly growing community of Vail is one of the gems of riparian habitat remaining in Pima County - Cienega Creek.  This is a phenomenal spot where shallow groundwater surfaces to create a small flowing stream flanked by towering cottonwood, willow, alder, and ash trees and an amazing diversity of wildlife.  And the more development in the area that is supported by drilling wells to tap groundwater, the more likely it is that Cienega Creek will someday stop flowing.  So I really hope they can finalize a wheeling agreement, because Vail has a renewable resource it could use, Tucson is willing to work with them to get it to their neighborhood, and riparian areas in Pima County are few and getting fewer.  And once they're lost, they are really hard to get back.