Repository logo
 

Marketing and financing a water bank: "first get your house in order"

Date

2010-03

Authors

Dorrance, David, author
Werner, Andrew, author
Boschman, Wilmar, author
U.S. Committee on Irrigation and Drainage, publisher

Journal Title

Journal ISSN

Volume Title

Abstract

Water banks entail the recharge of periodically available excess surface water for storage underground and recovery when needed. Properly formulated, these projects are one of the most cost-effective water supply tools available. These projects are frequently located in rural areas due to availability of land and water. However, projects with capital programs of more than $10 million typically need to be funded with financing. Traditional financing mechanisms such as raising customer fees, bonding and state/federal grants are increasingly difficult to obtain. Therefore, many rural agencies pursue partnerships with urban water utilities that typically have more available capital. This approach, pioneered by Semitropic Water Storage District and Arvin-Edison Water Storage District in the 1990s, entails upfront payments (and annual operating fees) by the utilities in exchange for long-term leases of project capacity. The decision to use this funding approach must be made early in the project formulation because it requires that the project be sized and configured to meet both local and utility partner needs. Water utilities are only willing to enter into these partnerships if the project can increase their water supply reliability at a lower cost than other alternatives and only if three critical criteria have been met: 1) Lack of controversy as evidenced by tangible benefits to, oversight from and support by local stakeholders; 2) proven technical, regulatory and economic viability; and 3) operational flexibility and modularity, enabling construction in phases. A project should not be marketed before each element is in place. These requirements typically take several years and several million dollars to achieve.

Description

Presented at Upgrading technology and infrastructure in a finance-challenged economy: a USCID water management conference held on March 23-26, 2010 in Sacramento, California.

Rights Access

Subject

Citation

Associated Publications