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Historic Water Transfer Saves Money

The City of San Diego Letterhead

January 29, 2002

CONTACT: Robert Carty
(619) 533-6607

Historic Water Transfer First Economical Public-Private Water Purchase
for Greater San Diego Area
Water Transfer Saves Money for City of San Diego Water Department

San Diego, CA -- A thirsty Southern California is always on the lookout for new sources of water, particularly in the San Diego region where imported water accounts for up to 90 percent of our annual average supply. California's water supply is mostly fixed - rights to water were distributed long ago and rainfall is limited and unpredictable. As shown by this transaction, transferring surplus water has become a viable method of moving water to areas that have a need. Up until now, transfer agreements were unheard of between public water agencies and private water wholesalers.

The City of San Diego Water Department (City) has just completed an agreement with Richmond, California-based Western Water Company to transfer more than 6,400 acre-feet of water (an acre-foot is approximately enough water to supply two families of four for one year). The water being transferred consists of agricultural supplies that have been conserved north of the Bay-Delta system, and is currently stored in Lake Shasta. Western Water has obtained this conserved water from three Northern California agricultural water agencies. This is a one-time water transfer. Additional supplies would require another agreement between the City and Western Water.

Public agency purchases of privately owned water have been attempted in recent years, but have not proven to be cost effective. The Water Department currently purchases all of its raw imported water from the San Diego County Water Authority, a local water wholesaler, at a cost of $444 per acre-foot. This agreement with Western Water will save the Water Department nearly $160,000 on raw water purchases. The Metropolitan Water District of Southern California and the San Diego County Water Authority are assisting with this transfer by allowing the Water Department to covey this water through their pipelines. Water resources agencies are involved in approval of the transfer agreement. Details of the transfer are still pending with some of them.

"We are excited to break new ground with the Western Water transfer," said Larry Gardner, director of the City of San Diego Water Department. "We have diversified our water supply portfolio and have been able to save money at the same time. This experience has also allowed us to learn how to coordinate a water transfer, and we look forward to completing more agreements like this one in the future."

Now that the agreement has been approved by the San Diego City Council, the water will begin its long journey from Shasta Dam to San Diego - traveling almost 680 miles. Helping the water along its way will be the Sacramento River, the Bay-Delta, the California Aqueduct, and Metropolitan Water District and San Diego County Water Authority aqueducts. The water will then arrive in San Diego - entering the City's water system after which it will be treated and delivered to City residents and businesses.

More information on the City of San Diego Water Department can be found online at www.sandiego.gov/water. Western Water Company is a publicly-traded company (NASDAQ) that is engaged in the identification, development, transportation, sale and lease of water rights and water to municipalities and other end users in the western United States and owns water rights and real estate in California and Colorado.


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