MWD’s Jeffrey Kightlinger on Ensuring Reliability of Southern California’s Water Supply

Jeff, our interview today takes place in the midst of a pandemic and  14 years since your first TPR interview in 2006—when you became GM at the Metropolitan Water District. In that first interview, you laid out three priorities: the Colorado River, the Delta, and enhanced local supply. In those years, local water supply has become a very significant issue here in metropolitan Los Angeles. Begin by addressing what’s changed over time with respect to local supply and Met’s role in enhancing local supply?

Jeff Kightlinger: If you go back 25 years ago, Metropolitan was roughly reliant on getting two-thirds of its supply from imported water and one-third from local sources. We’re now down to almost down to 50/50; that’s a pretty remarkable achievement over the course of 25 years. We’ve done that in two ways.

Probably the most important and successful achievement is reducing demand. Since 1990, we have added 5 million people to Southern California and use about 25 percent less water to support those 19 million people and our economy. We’ve mainly done that though investing in efficiency and conservation, and that part has been more successful than we ever imagined it would be. We did not believe we could be this efficient, and there’s still room to go.

In terms of local supply, we’ve done well in some areas and lost ground in others. We’ve done really well with recycled water, particularly out in Riverside and Orange County areas. Southern California went from recycling about 2 percent of its water 25 years ago to 10 percent; the most in the United States. We’re behind countries like Spain and Israel in terms of percentage, but in terms of volume it’s pretty significant. In Southern California almost 400,000 acre-feet per year out of our 4 million acre-feet per year demand comes out of recycled water.

There are some exciting projects on the way: City of Los Angeles’ Hyperion, Metropolitan’s partnership with the LA County Sanitation District, and City of San Diego’s Pure Water programs. I’m not sure when those will come online—they’re big and expensive—but lots of progress on those.

Where we’ve lost ground in terms of local supply is our groundwater basins. We have very productive groundwater basins historically, but we’ve contaminated them over time. We weren’t really aware of how much we contaminated them, because our testing ability wasn’t that great 25 years ago. We used to talk about parts per million in terms of contaminants, then parts per billion, and now parts per trillion and sometimes even parts per quadrillion—just in 25 years.

We’re finding things that we don’t even really know what the impacts of certain contaminants getting into the water are, with the latest issue of PFAS and PFOS—chemical chains of plastics put into products to enable them to be fire retardant, more efficient, and more effective. We’re calling them ‘forever chemicals’ because they bond with water and they’re there until you strip them out. They’re in the parts per trillion, and now we’re regulating that.

For every acre-foot we’ve added in terms of recycled water, we’ve lost an acre-foot in groundwater we can pump. Our local supply has just been in balance, we have not really been able to grow that pie because we’ve been losing supply at the same rate that we’ve been adding to it.

The mayor of Los Angeles in 2014 signed an executive order with the goal of reducing imported water supply by 50 percent. It was a stretch goal at the time; but given the climate events since and LA County’s investment in stormwater capture, has progress been made?

Southern California is down to about 50 percent imported water, so we have been successful as a region. Some areas are more reliant on imported water than others. Those areas that have groundwater supplies have been a little more successful at reducing imported supply than other areas.

One of the challenges in stormwater capture is that climate change is driving Southern California to be even drier. It’s not like we get a lot of rain down here to begin with; that’s the reason we imported water in the first place. We may be able to capture stormwater, but if it’s going to be volatile, or during big events, it’s not going to singlehandedly be a way for Southern California to be successful at water self-sufficiency.

Recycled water is going to be a steadier supply, and that’s going to be better for us in the long run. Stormwater capture in certain pockets of our area can be helpful, but I still see us relying on a significant amount of imported water for at least a generation or two.

MWD’s business model long has relied on selling water to Southern California. Has greater local reliance on recycled water and water capture impacted your revenue model?

We still sell a significant amount of water. Metropolitan is going to sell somewhere between 1.5 million and 2 million acre-feet of water per year on average going forward, but that’s lower than we’ve sold historically. When I first became general manager, we were selling over 2 million acre-feet every year, and now, we’re 20 percent less than that. That means less revenue, so rates have to increase to recapture some of that lost revenue.

Historically, Metropolitan was founded by using property taxes as a stabilizing source of revenue. Originally, 60 to 75 percent of our revenue was property taxes, with water sales making up the smaller portion. We’ve now flipped that; property taxes are less than 10 percent of our revenue while 80 percent comes from water sales. There are challenges with that; it makes our budget more volatile and it encourages people to not pay for the overall system and just take water in dry years.

We need to have to find a way to keep things steady and stable to allow Metropolitan to do its mission, and provide revenue for continued investments in conservation and recycling.

It’s often been argued by both environmentalists and Wall Street that water’s price is “too low” and therefore sends the wrong market signal to those arguing for more innovation and conservation. Is water’s price too low?

A lot of people say a low cost for water is a bad thing; that people don’t appreciate water because we’re not charging the true cost of it. In my view, it’s actually a good thing; we should be as efficient as possible. The fact that we are so efficient and that water doesn’t have to cost a lot to enable us to do our mission is serving the public well.

I’ve never argued that we should raise the price of water so people would want to conserve it. Instead, if you educate people, they go out and conserve water.  At the retail level, tiered pricing has worked well to send a message to consumers. We have some legal complications with flex pricing, but people really understand that as they use more and more water, the price starts jumping dramatically. I don’t think raising the overall price of water is necessary, but I think tiered pricing can be very valuable. 

Jeff, given that over your fourteen-year tenure California has experienced historic droughts, floods and fire seasons, how does a MET GM hold the Southern California region with its diverse sub-regions and too-many-to-count water districts—each with different needs, interests, and economies—together?

When I look back on the last fourteen years, there have been a couple of really climactic events. One was that we had two significant droughts in a fourteen-year period. In the drought from 2008-11, Governor Schwarzenegger had to declare a statewide emergency. Then, moving into Governor Jerry Brown, 2013-16 was the most significant drought in California’s history with the lowest snowpack in 1,500 years.

Our planning scenario was based on the lowest we could ever foresee coming—the significant drought in 1977— which resulted in a 20 percent State Water Project supply. Then in 2015, the State Water Project delivered only 5 percent to its customers.  We went through incredibly difficult droughts that were comparable to what was seen in Australia and Cape Town. There you saw huge societal upheaval in both those communities yet we got through our drought pretty smoothly. I think a lot of that was our foresight, planning, and public engagement.

Those droughts were huge disruptive events, but the Great Recession—beginning in 2008—also had a huge financial impact on Southern California and the water industry. Water sales dipped considerably, and the idea that you could raise rates in the middle of the Great Recession was pretty difficult. We had to reformulate and adapt to that as well.

We’ve managed through a lot of big, disruptive events, and it’s nice to say—in the middle of a pandemic beyond anything any of us could have predicted—that we are here with more water in reserve in our history. We are well situated to manage through this.

Please elaborate more on the challenge of finding agreement among MET’s many constituencies: water districts and stakeholders that run from the Tehachapi Mountains to both the Mexican & Arizona borders?

That has always been one of the real challenges for Metropolitan. It’s a unique agency in the sense that it covers a huge geographic area: 5,200 square miles, all or parts of six counties, and 19 million people. We go from Santa Monica to Riverside in terms of political and ethnic diversity. We all need to work together and keep everyone focused on the same mission of providing water. You have the city of Los Angeles willing to invest a lot of money into recycling, San Diego willing to invest a lot of money into ocean desalinization, and others focused on groundwater basins. Some people arguably benefit a bit more from Met programs than others, but it all comes out in the wash.

 We have a huge board with 38 members, so trying to build consensus is incredibly difficult. One of the things that really has been important has been our single mission: water reliability. Whether you’re a Republican or a Democrat, and whatever your issues are, we can all agree water reliability is pretty important.

People have understood that Metropolitan acts as a leveler in financial insurance policy for the region. When things get really ugly in the water world—like when we go through a blistering drought—Metropolitan is there to pick people up. For example, a decade ago, Santa Monica—a city with a strong environmental ethic—discovered MTBE in their water. They went from getting 15 or 20 percent of their water from Metropolitan to 100 percent in 72 hours. To the homeowner, it was unnoticeable; you just turned on your faucet and it came out.

Anywhere else, to lose 80 percent of your water supply overnight would’ve been devastating, but Metropolitan protected Santa Monica from that impact. People see the value in Metropolitan and even after all the arguing and pushback, they’re willing to continue investing in the institution and the reliability Metropolitan represents.

Do you have a like MET local supply assistance story to share for Orange or San Diego County?

Orange County is going through the exact same issue now, the discovering of what we call PFAS and PFOS in Orange County’s groundwater basin. They are having to close many of their wells due to this contamination and switch over to Metropolitan’s water supplies. It’s a big impact to that region. There may be fiscal impacts, but in terms of water supply impacts to the consumer, Metropolitan is insuring water supply reliability for Orange County.

 San Diego has had a number of challenges running its Carlsbad desalination plant, between red algae blooms and plant disruptions. If that were their sole source of supply, you’d have homes that would go two to four weeks without any water. Instead, they can flip seamlessly back onto Metropolitan and we can provide 100 percent of their supply instantaneously. That enables people to build those kinds of programs, and it provides a huge insurance policy for the entire region. 

As the GM of Met, you had the luxury of having Jerry Brown who was, as Governor of California—especially during his last eight years—fully committed to achieving a long-term fix of the Delta.  Give readers an update on the Delta Fix.

There’s no doubt that working your way through the Delta issues in California are the most controversial issues for any governor. Almost every governor since Jerry Brown’s first tenure has had to wrestle with this in some fashion. We just can’t seem to get to any real consensus on how to deal with this as a state. One of the real achievements of Jerry Brown was that he really highlighted that something has to be done. We achieved consensus that something has to be done.  But sadly, we’re nowhere near consensus on what is actually the best solution.

The first thing Governor Newsom did was agree that something had to be done, but he wanted to change what Jerry Brown did and scale it back. There are still folks opposed to that, but the overall consensus remains that something has to be done in the near future. Whether you’re in the Central Valley, Southern California, or the Bay Delta, we’re all moving water through the Delta. At least three-quarters of the state needs this issue to be solved.

What is the status of California’s ultimate water storage vehicle – its snowpack?  What impact is climate change having on the contribution of the State’s snowpack to water supply reliability?

We’re going to have to anticipate an increasingly volatile water supply. What we’re probably going to see is five or six years of deep drought, then two or three years of flooding. We’re going to have these wild swings, and our job as water managers is to somehow even that out. That’s going to take a real adaption of our infrastructure, and that’s why we need a long-term infrastructure solution in the Delta. We need more reliable ways to capture, store, and move water. Absent that, we can’t balance out the climate change swings in our supplies.

The good news is that it looks like we’re going to have precipitation; it doesn’t look like California is going to dry up and become desert. The bad news is it’s going to be rain that falls for a 14- to 20-day period. We’re going to get three-fourths of our entire year’s water supply in a two to three-week period, so we’re going to have to have really strong infrastructure to capture, store, and move water to prevent flooding. It’s doable, but it’ll take a lot of political will and financial capability to adjust to this climate-changed world.

When tensions arise within your region over MET policy, it’s usually over who has to pay for the existing infrastructure or for new investment to ensure future reliability. Address the challenge of finding consensus around water policies.

Trying to find consensus when some people feel they’re not quite getting the same value as others but are still willing to invest for the overall regional good is the challenge. We’ve been able to do it as an agency, and sometimes we’re slow in getting there, but we eventually get there. The good news is that sometimes in a crisis, we get inventive and more focused.

I see a silver lining in a lot of the amazing things we’ve been doing since this pandemic started. We've all switched over to this virtual world and adapted to it on the fly. All of our meetings now are being held remotely, and we’re finding new ways to make this work.

All of our Lake Mead banking programs have all been invented in the last decade in response to an extremely deep 20-year drought on the Colorado River. We had 50 years of arguing over who would get to put a single drop in a federal reservoir, and we couldn’t resolve it until we got into a crisis. In the last twenty years, we’ve completely reinvented the rules on how to operate Lake Mead and who gets to bank water. We’ve all been able to make it work, and I am confident we’ll continue to adapt to challenges.

Bring our readers up to date on the status of the Colorado River compact, which is one of those issues outside the immediate field of vision for most people in Southern California, but critically important for our region’s future.

The Colorado River is an incredibly important source of supply for the American Southwest. It provides 25 percent of Southern California’s water, but when you think about it, it’s almost 100 percent of the water for Phoenix and Glendale in Arizona, and Las Vegas in Nevada. It supplies water to almost 30 million people and about 5 million acres of farmland across seven states and Mexico.

We started going into drought in the Colorado River in 2000 and we are now 20 years in; it’s obviously a severe long-term, multi-decade drought. Climate change is impacting our supply there. We’ve had permanent losses and an over allocated supply. Yet you don’t hear about it being in the news, and that’s because, starting in 2000, the seven states started working closely together. We used to sue each other, but we’ve now been working cooperatively and really turned it into a remarkable success story.

A major breakthrough was in 2007 when we agreed to allow Southern California to do Lake Mead banking. Then, in 2019, we executed the Drought Contingency Plan, where all the Lower Basin states agreed to purposefully leave water to rebuild the supplies in Lake Mead. Since then, Metropolitan now has over a million acre-feet of banked supply in Lake Mead. Metropolitan alone has added 12 feet to the entirety of Lake Mead, and we’ve been able to do that through the cooperation we have with Arizona and Nevada.

One thing that’s really exciting is that we recently signed Letters of Intent with Southern Nevada and Arizona so that they can invest in recycled water in Southern California, and we would exchange Colorado River water back to them. You’re seeing a three-state partnership being developed across the American Southwest, using the Colorado River as the hub.

You mentioned the reliance by MET on virtual meetings because of the stay-at-home orders. You have more than 14 years of experience in this water world and board, and relationships matter when you’re trying to find consensus. What are the positives and negatives about transitioning to virtual communication with stakeholders residing across all of Southern California?

In the long run it will become a real challenge because the way in which we’ve made so much progress on the Colorado River is through trust and relationships. Twenty years ago, my predecessors and the Southern Nevada leaders wouldn’t talk to each other; they kept suing each other.

Now, I can pick up the phone and call my counterpart in Las Vegas, and we can arrange a deal in about 15 minutes because we know and trust each other. In the long run if this continues, that has to deteriorate; there’s no doubt about it. I don’t believe you can build that trust virtually.

On the plus side, I think we’ve gotten a lot more efficient. People aren’t wasting several hours a day flying everywhere just to have a meeting. We have a smaller carbon footprint, we’re getting cleaner air, and people are wasting less time commuting, so I think there are some silver linings here.

On the nexus of water and power: California policy makers have been fixated for years on advancing electrification, but few, including the media, dwell on water issues unless there’s a drought or a ballot measure to tax and fund stormwater capture. Who today are the public champions of water policies in government that MET relies upon?

One of the challenges we have in the urban sector is that legislators in our region have a limited set of serious issues—crime, jobs, traffic—but it’s never water. If you go into the Central Valley and talk to the representatives from there who have farming constituents, it’s water, water, water.  In Southern California, we have been fortunate to have some champions and that’s been very important. State Senator Bob Hertzberg remains someone who gets the value of water supply infrastructure and its importance.

Some of the folks here in Southern California came out of the water world. Assemblymember Rubio in the San Gabriel Valley is very much attuned to water. Republican Congressman Ken Calvert from Riverside has been willing to partner again and again with Democratic Senator Dianne Feinstein to do bipartisan Bay Delta legislation along with Democratic Congresswoman Grace Napolitano. It’s been important having people on both sides of the aisle working on water. While our representatives and constituents aren’t laser-focused on water like they might be in the Central Valley, we have had our important champions over the years.

Lastly, this past week, S. David Freeman—former Tennessee Valley Authority leader, former Head of the Department of Water & Power of Los Angeles, an advisor to mayors and governors—passed away. Speak to his passing and significance.

David Freeman was a giant in our business and a truly larger-than-life figure. His cowboy hat, his outspokenness, his talks on alfalfa, cotton, water, and the need for green energy. I disagreed with him on many occasions, but I always enjoyed him; he was a real character. I sent out an obituary to my board marking his passing, as he served briefly on Metropolitan’s Board while he was at DWP.  He will be missed.