"this drought, if it continues much longer, will test the financial stability of many municipal water systems" http://t.co/m6q8PneS0i
— jfleck (@jfleck) February 22, 2014
From the post:
Two water districts in Southern California will spend a total of $US 80 million this year to tear out lawns, replace inefficient toilets, and purchase more water imported from the Colorado River, a distant source that itself is in a 14-year dry spell.
Farther north, a district east of Sacramento, in an attempt to cut water consumption by 40 percent, is considering a dramatic rate increase for the heaviest users.
Taken together, the economic responses to the drought reveal two consequences: that the price of water will rise to pay for these programs and that this drought, if it continues much longer, will test the financial stability of many municipal water systems, which are tapping reserves and face higher prices for water delivered by state and federal canals.
“In a prolonged drought, a simultaneous increase in water prices and reduction in usage would put import-dependent utilities under pressure, forcing large and difficult-to-impose rate increases,” claims Fitch Ratings, a credit rating agency.