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Posted on | July 21, 2009 | No Comments

“MWD stops paying rebates for water-saving devices”

TO THOSE confused by the Los Angeles Times headline today on page A7 of the print edition asserting that the Metropolitan Water District of Southern California has stopped paying rebates for water-saving devices, you’re right to be scratching your heads.

That report along with its varying online incarnations dated from July 17th to July 20th are all more than a month late, and wrong.

Had the Times covered the exhaustion of the original rebate funds it might have reported on May 13 as the San Diego Union Tribune did, “In April, a rebate program that rewards water-conservation efforts ran out of money in the first eight days of the month. May’s funding didn’t last two hours. Now the demand on the SoCal Water$mart program is so great that the money is gone for the rest of the fiscal year, which ends June 30, and officials are considering revamping the system.”

By June, it would have been correct to report that the program was in such disarray that Metropolitan payments to suppliers of low-flow toilets and the like had been suspended and that suppliers of the devices were being hurt. As the Riverside Press-Enterprise did report in a timely fashion on June 9, the Metropolitan board not only suspended paying for rebates, auditors were also called in over what was suspected to be a $24m overspend of the conservation program.

During the subsequent Metropolitan board meeting, held on the 13th and 14th of July, as reported in the Riverside Press-Enterprise and this blog, an audit revealed that the overspend was actually $14.2m, not $24m. In addition to demands for overhaul of the management of the rebate program, three funding options were put to the board: To pay the overspend and fully fund the program for next year, to pay the overspend out of next year’s budget, or  leave the suppliers unpaid and resume the program for the 2009/10 fiscal year.*

Arguing for the first option, the Chief Operating Officer Debra Man offered calculations that the water saved by the rebate-funded devices came in more cheaply than the District’s other sources of new water: $225 per acre foot from conservation as opposed to $275 per acre foot for fresh supplies from the State Water Project and as much as $340 to $400 per acre foot from water swops from the Colorado River system. Man foresees that the conservation program may save as much as a million acre feet of water, enough for two million families for a year, by 2025.

Before the July 14 board vote, Metropolitan Chairman Timothy Brick berated directors for having allowed the hardships inflicted on the vendors of the low-flow devices. “Metropolitan hasn’t been responsive to the vendors,” he said. “It’s created a great deal of problems. When we set up a program this way, we’re setting up an industry, a conservation industry, and when we screw people out, it’s very difficult for these people to continue in business. We’re hurting ourselves as well as hurting them. The administrative mistakes are inexcusable.”

With San Diego directors dissenting, on July 14, the Metropolitan board voted to fully fund outstanding rebate payments and additionally to fund the program for the coming year, exactly the opposite outcome as represented a week later by the Los Angeles Times.

This post has been updated.

*In an earlier version of this posting, Option 3 of the package put to the board incorrectly stated that the program would have been suspended. Option three, which was not selected by the MWD board in the July 14 vote, would have expected suppliers to keep working with Metropolitan after being left $14.2m in debt. The 2009/10 budget would have remained the same at $19m.


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