Testing the Waters: Factors that Influence Water Conservation and Efficiency in the Santa Clara Valley Water District Connie Huynh, Conor McFadden, Stefan Norgaard, Hector Santa Cruz, Wendy Sov, Dr. Newsha Ajami Public Policy Senior Practicum March 2015 1 EXECUTIVE SUMMARY Faced with severe drought and one of the state’s fastest growing regions, Santa Clara County (SCC) must devise a set of strategies to meet future water demand. One of these strategies is to ensure that water is used in a more efficient way through conservation and efficiency measures. For the past few decades, SCC’s sole water wholesaler, Santa Clara Valley Water District (SCVWD), has been actively working with their thirteen independent water retailers to encourage water conservation. In collaboration with SCVWD, our team conducted a comprehensive evaluation of their water conservation and efficiency programs to arrive at a set of recommendations to meet their long-term conservation goals. This study explored the following research questions: • What factors influence water conservation and efficiency in SCVWD? • What have been trends in program participation by retailer over the last twenty years? • Which programs are most cost-effective, have the largest per capita impact on water use, and can best be scaled to reach large segments of the district customer base? • What recommendations emerge from this study to best improve water conservation and efficiency in the future? We evaluated ten of SCVWD’s conservation programs to determine participation across thirteen retailers, identify trends in water savings, and evaluate each program by cost-effectiveness, impact, and scale. We created a ranking system based on current and potential savings. From our retailer analysis, we found that smaller and medium sized retailers in SCVWD perform better than larger metropolitan retailers when it comes to proportion of community engagement. As part of our study, we compared residential, commercial, and landscape programs using the following criteria: cost-effectiveness, impact, and scale. We found that the Residential Showerhead program has been the most cost-effective program. For impact, our data indicates that the Residential Clothes Washers excels. Of the SCVWD’s residential programs, the Residential High Efficiency Toilet (HET) program has the most potential to be scaled; currently only 2.55% of District residents have participated in this program. Overall, the best three district programs are the Residential Showerhead, Residential High Efficiency Toilet, and Residential Clothes Washer programs, in that order. We also conducted a best practices analysis by observing the systems in place for San Francisco Public Utilities Commission (SFPUC), Municipal Water District of Orange County (MWDOC), and East Bay Municipal Utilities District (EBMUD). We found that, like SCVWD, peer water district wholesalers like SFPUC, MWDOC, and EBMUD have innovative water-savings programs that both holistically engage their respective populations and create cultures of water conservation and efficiency. Geographic and demographic factors make direct comparisons with 2 peer water districts difficult at best, but from our research, we learned that all three observed benefits from the automated water meter systems that track household water savings and provide households tailored suggestions to reduce water use. Our team advanced two alternatives, “expanding the tent” and “changing social norms,” as the two most palatable interventions in the short and long term. 1. “Expanding the tent” is a strategy of reaching out to specific demographic groups and locales, which have comparatively low rates of participation and engagement around water conservation and efficiency. As more SCC citizens participate, retailers can develop economies of scale and more cost-effectively run passive and active programs. “Expanding the tent” naturally increases programs’ impact, as participation rates increase across the district. While programs might lose their potential for scale as more residents participate, the proportion of the population engaged increases. 2. “Changing Social Norms” can help cultivate to a community of expectations around active participation in water conservation and efficiency. Such norms will allow greater participation in rebates and incentive programs regardless of the cost. They will also lead to higher impact numbers across the board as citizens engage due to a common understanding of the importance of water use. Much like in “Expanding the tent,” changing social norms will lead to an increase in the proportion of SCC households reached. Alternative efforts such as “expanding the tent” and “changing social norms” will complement the tremendous work of Santa Clara Valley Water District. As population continues to increase in Silicon Valley, water conservation and efficiency programs must similarly grow to reach new demographics and change behavior in new ways. 3 TABLE OF CONTENTS EXECUTIVE SUMMARY .............................................................................................. 2   ACKNOWLEDGMENTS ................................................................................................ 7   1. INTRODUCTION ........................................................................................................ 8   2. DEMOGRAPHIC ANALYSIS OF SANTA CLARA COUNTY ........................... 10   3. CONSERVATION AND EFFICIENCY PROGRAMS .......................................... 15   4. METHODOLOGY ..................................................................................................... 18   Cost-effectiveness ..................................................................................................................... 18   Impact ....................................................................................................................................... 20   Scale .......................................................................................................................................... 21   5. DISCUSSION AND RESULTS: WHAT WORKS IN SANTA CLARA VALLEY AND WHAT CAN BE IMPROVED ....................................................................................... 23   Program Evaluation Scorecard .............................................................................................. 36   Program Results by Cost-Effectiveness ................................................................................. 36   Program Results by Impact .................................................................................................... 43   Program Results by Scale ....................................................................................................... 45   Synthesis of Status Quo ........................................................................................................... 46   Potential Limitations and Challenges .................................................................................... 48   6. BEST PRACTICES ANALYSIS & ALTERNATIVE SOLUTIONS .................... 51   San Francisco Public Utilities Commission ........................................................................... 51   Municipal Water District of Orange County ........................................................................ 52   Automated Meters ................................................................................................................... 53   Alternatives Analysis ............................................................................................................... 54   Expand the Tent ..................................................................................................................... 55   Changing Social Norms ......................................................................................................... 55   Economic Incentives ............................................................................................................. 56   Legal/Regulatory Policy Change ........................................................................................... 56   Tiered Rates and Price Hikes ................................................................................................ 57   Rationing ............................................................................................................................... 58   Education and Enforcement .................................................................................................. 59   Public-Private Partnership ..................................................................................................... 59   7. RECOMMENDATIONS ............................................................................................ 60   Recommendation #1: Expand the tent ................................................................................... 60   Recommendation #2: Changing social norms and long-term water usage behaviors through education and engagement ...................................................................................................... 61   How our Recommendations Affect Cost-Effectiveness, Impact, and Scale ....................... 63   8. CONCLUSION ........................................................................................................... 70   9. APPENDICES .................................................................. Error! Bookmark not defined.   10. BIBLIOGRAPHY AND END NOTES .................................................................. 98   4 FIGURES: Figure 1: Population and Water Use Over Time in SCVWD ....................................................... 10   Figure 2: Population Density (per square mile) ............................................................................ 11   Figure 3: Estimated percentage of the population living in poverty ............................................. 13   Figures 4 and 5: District Residential Water Use Distribution, and General Municipal and Industrial (M&I) Water Use Distribution, both by zoning category .............................................................. 15   Figure 6: High Efficiency Toilet (HET) program for Large metropolitan retailers ..................... 24   Figure 7: High Efficiency Toilet (HET) program for Medium metropolitan retailers .................. 24   Figure 8: High Efficiency Toilet (HET) program for Small metropolitan retailers ...................... 25 Figure 9: Residential Clothes Washer program for large metropolitan retailers ......................... 26 Figure 10: Residential Clothes Washer program for Medium metropolitan retailers .................. 27 Figure 11: Residential Clothes Washer program for Small metropolitan retailers ...................... 27 Figure 12: Water Wise House Calls (WWHCs) for Large metropolitan retailers ........................ 28 Figure 13: Water Wise House Calls (WWHCs) for Medium metropolitan retailers ..................... 29 Figure 14: Water Wise House Calls (WWHCs) for Small metropolitan retailers ......................... 29 Figure 15: Showerhead Retrofit Program for Large metropolitan retailers ................................. 30 Figure 16: Showerhead Retrofit Program for Medium metropolitan retailers ............................. 31 Figure 17: Showerhead Retrofit Program for Small metropolitan retailers ................................. 31 Figure 18: Aerator Retrofit Program for Large retailers .............................................................. 32 Figure 19: Aerator Retrofit Program for Medium retailers .......................................................... 33 Figure 20: Aerator Retrofit Program for Small retailers .............................................................. 33 Figure 21: Cost-efficiency (in Acre-feet / $) vs. efficiency (in Acre-feet / unit) by program ......... 40 5 TABLES: Table 1: Population in Santa Clara County and California .......................................................... 11   Table 2: Examples of Santa Clara Valley Water District Savings: Passive and Active ................ 16   Table 3: Retailers and respective households served in SCVWD .................................................. 22 Table 4: Analytical framework for cost-effectiveness, impact, and scale ...................................... 35   Table 5: Program timeline (programs organized by start date) .................................................... 36   Table 6: Cost-efficiency and Efficiency by Program .................................................................... 39   Table 7: Cost-efficiency and efficiency calculations by program .................................................. 41   Table 8: Impact calculation by program ....................................................................................... 44   Table 9: Aerator Retrofit Program for large retailers .................................................................. 46   Table 10: Status-quo program rankings in cost-efficiency, impact, and scale .............................. 47   Table 11: Total Average Score in Water Conservation and Efficiency, as measured through cost- effectiveness, impact, and scale ..................................................................................................... 48   Table 12: Comparative analysis of the status quo, “expand the tent,” and changing social norms. Integrative analysis of Chapter 5 and 6 ......................................................................................... 68   6 ACKNOWLEDGMENTS In carrying out this project, we received help and guidance from persons and organizations that deserve our greatest gratitude. We would first and foremost like to thank our partners at Santa Clara Valley Water District (SCVWD) for initiating policy questions for us to engage with. Specifically, we would like to thank our main point of contact at SCVWD, Tracy Hemmeter for her continuous support and expertise. Similarly Jerry De La Piedra, Karen Koppett, and the entire Water Conservation Unit deserve recognition for offering their specialized guidance throughout this entire process. We would also like to extend our sincerest gratitude to the Stanford Public Policy Department, which provides this unique opportunity for Public Policy seniors to apply their technical skills to current policy issues. Our deepest gratitude goes out to all those who helped directly or indirectly through this process. To our Practicum Course Advisor, Newsha Ajami, thank you for your constant encouragement and guidance throughout the entire assignment. Without your experienced evaluation and keen awareness to detail, this project would not have progressed as far as it has. We would like to thank Public Policy Writing Specialist, Alyssa O’Brien for her insightful feedback on our written and presentation material. Additionally, we thank Patricia Gonzales and Kim Quesnel for providing an academic and professional take on our presentation. Finally, we would like to acknowledge specific individuals in the Public Policy Department that make this program feasible: Mary Sprague, Greg Rosston, Anna Schuessler, Katie DuPlessis, and Meredith Appelbaum. 7 1. INTRODUCTION The Santa Clara region has seen significant growth over the last 50 years, and more growth is to be expected. In 1960, only 640,000 people called Santa Clara County their home, and it has now grown to nearly 2 million people today.1 In fact, Santa Clara’s population has grown by another 5% just over the last five years.2 One of the main contributors to the population growth has been the rise of the Silicon Valley, which lies within the boundaries of Santa Clara County. The booming technology industry and abundance of skilled workers have drawn large companies like Google, Facebook, Ebay, Apple and Oracle to the area.3 Reliable access to clean water is key in order to maintain current and future growth in the region as a whole. The Santa Clara Valley Water District (SCVWD) is the main water wholesaler for Santa Clara County and its 1.8 million residents.4 SCVWD distributes water to thirteen water retailers including San Jose Water Company, San Jose Municipal Water System, Purissima Hills Water District, Stanford Utilities, and the Cities of Palo Alto, Mountain View, and Sunnyvale. The SCVWD’s mission is “to provide Silicon Valley safe, clean water for a healthy life, environment, and economy.”5 With over a half a billion-dollar budget, SCVWD serves as a vital economic player in the Santa Clara region. The SCVWD has pioneered successful conservation and efficiency programs to reduce urban water usage in order to meet future demand even before the escalation of current drought conditions. However, severity of the current drought has shone a spotlight on the increasing need for more effective water conservation and efficiency programs.6 According to the San Jose Weather station, Santa Clara averages 15.08 inches of precipitation a year.7 Over the last three years, San Jose has only received a total of 22.83 inches (7.6 in. per year).8 This amounts to less than half the yearly average. The goal of this project was to identify which of SCVWD’s conservation and efficiency programs have most effectively decreased water use in the past twenty years. Our team put forward the following research question: “What are the factors that influence water conservation in the Santa Clara Valley Water District, and what active conservation programs will most effectively shape future water conservation?” We began by narrowing our analysis down to ten active programs based on available data and impact criteria. We then considered the current efficacy of water conservation programs in the district for a cross-section of district residents. Following this, we carried out calculations to determine the cost-efficiency, impact, and scale of each program. Using these results we evaluated alternatives and considered potential recommendations and next steps to improve water conservation in the area. In order to provide a comprehensive outlook on future 8 possibilities SCVWD can take, we conducted a best practices analysis relating Santa Clara Valley Water District to other California water districts, namely the San Francisco Municipal Utilities Commission and the Municipal Water District of Orange County. All things considered, we concluded that SCVWD should invest in efforts to expand the tent and change the social norm around water use. 9 2. DEMOGRAPHIC ANALYSIS OF SANTA CLARA COUNTY Santa Clara Valley Water District is the sole water retailer for Santa Clara County. Of the district’s thirteen water retailers some are geographically isomorphic to specific municipalities and others are not. (Please see Table 3 for a list of the district’s thirteen retailers). In the past decade, the county has grown rapidly. Demographic trends highlight rising home prices and increasing density throughout the county. Our team began by analyzing U.S Census and American Community Survey (ACS) data made available on Social Explorer. Population Density Looking at density maps of Santa Clara County from the 2010 U.S. Census and from the 2011, 2012, and 2013 American Community Survey, our team observed a general increase in population density as the County’s population rises. As population has increased, aggregate water use has stayed relatively constant. Indeed, as Figure 1 shows, water use in SCVWD has been relatively “steady" while population has continued to grow, showing that per capita water use declines as population grows. This may suggest that water conservation and efficiency efforts have been able to mitigate the rising population. Population  and  Water  Use  Over  Time   2,000,000   450,000     ) 1,900,000   400,000   et 1,800,000   e 350,000   f -­‐ 1,700,000   e 300,000   r   1,600,000   c n 250,000   a o 1,500,000   ( ati 1,400,000   200,000   se   l 150,000   U u 1,300,000     p 100,000   r o 1,200,000   e t P 1,100,000   50,000   a W 1,000,000   0   1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 8 8 8 8 8 9 9 9 9 9 0 0 0 0 0 1 1 1 0 2 4 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4                                     population   water  use  (AF)   Figure 1: Population and Water Use Over Time in SCVWD Source: SCVWD Annual Report.9 Developing technology may be a big contributing factor to this pattern. For example, several years ago, SCVWD distributed Pre-Rinse Spray Valves to restaurants and food stores that flowed 10