MUNICIPAL WATER-USE AND WATER RATES DRIVEN BY SEVERE DROUGHT - A CASE-STUDY

This paper synthesizes and interprets data pertaining to the evolution of average water revenue, water use? and the average cost of water su pply in the City of Santa Barbara, California, from 1986 to 1996, a pe riod which included one of the most devastating droughts in California this century. The 1987-1992 drought hit the study area particularly h ard. The City of Santa Barbara was dependent exclusively on local sour ces for its water supply. That made it vulnerable as the regional clim ate is prone to extreme variability and recurrent droughts. The 1986-1 992 drought provided a rare opportunity to assess the sensitivity of m unicipal water use to pricing, conservation, and other water managemen t measures under extreme drought conditions. Our analysis indicates th at the average cost of water rose more than three-fold in real terms f rom 1986 to 1996, while the gap between the average cost of supply and the average revenue per unit of water (= 100 cubic feet) rose in real terms from $0.14 in 1986 to $ 0.75 in 1996. The rise of $3.08 in the average cost of supplying one unit of water between 1986 and 1996 meas ures the cost of hedging drought risk in the study area. Water use dro pped 46 percent at the hei:ht of the drought relative to pre-drought w ater use, and remains at 61 percent of the pre-drought level. The data derived from the 1987-1992 California drought are unique and valuable insofar as shedding light on drought/water demand adaptive interactio ns. The experience garnered on drought management during that unique p eriod points to the possibilities available for future water managemen t in the Arid West where dwindling water supplies and burgeoning popul ations are facts that we must deal with.