Water for Auction in California

By Bettina Boxall, LA Times

Need more water? If you’ve got $30 million or so, you can bid for it at an auction this fall.

In what officials believe is a first for the state, a Southern California water agency is planning to auction off enough water to supply about 70,000 homes for a year.

Water sales are not uncommon in California, especially when supplies are tight, as they are in the current drought.

But putting water up for bid in an auction — which is bound to drive up the price — appears to be unprecedented in the state.

“Water in general has always been a very low-priced commodity, and I think the reality is, it’s going to start catching up with other utilities. It’s going to fluctuate with markets,” said Ken Manning, chief executive of Chino Basin Watermaster, a quasi-public entity that manages the basin. “Whether that’s right or wrong, I don’t know. I just know where it’s going.”

Manning anticipates that the water will fetch $800 to $1,000 an acre-foot, or roughly $30 million. Underground storage in the basin will cost another $30 million.

“We think we’re offering a reliable product. It’s in the ground. So it will demand a higher price,” he said.

Read full article

Source: LA Times