New Water Supply Reservoirs Are Risky Ventures

Recent legislation encourages local governments to explore the construction of new reservoirs and at least one new reservoir is being contemplated in the Catawba Basin.   The Catawba River Water Supply Project, which supplies water to Union County, North Carolina, and Lancaster, South Carolina is proposing to construct a new 92-acre reservoir on the Catawba River south of Rock Hill.  The cost of the reservoir is currently estimated to cost at least $53 million (excluding environmental mitigation cots), and the costs are climbing.

The report, Money Pit: The High Cost and High Risk of Water Supply Reservoirs in the Southeast, documents the financial risks and water resource risks tied to the development of new reservoirs in the Southeast. The report comes at a time when many local governments throughout Georgia, the Carolinas and neighboring states are considering significant spending of public taxpayer and ratepayer dollars to build new water supply reservoirs. Collectively, current reservoir proposals in Georgia could cost at least $10 billion in taxpayer and ratepayer dollars.

“Building a water supply reservoir is an incredibly expensive undertaking that carries tremendous risk and saddles communities with debt, with no guarantee they’ll receive the hoped-for water,” said Jenny Hoffner, Director of Water Supply for American Rivers.

“Many leaders see reservoirs as a historically proven way to secure water supply, but looking in the rearview mirror is not the prudent way to navigate the challenges ahead,” said Hoffner. “Local leaders need to know there are lower-risk, lower impact ways to secure water supply. A new reservoir should be the last option on the list, not the first.”

“Saddling a community with debt for a major reservoir project is like buying more house than your family can afford,” said Ben Emanuel, Associate Director of Water Supply for American Rivers.

The report outlines five key financial and resource risks inherent in the pursuit of new water supply from reservoirs:

• Reservoirs are highly expensive, racking up debt for ratepayers and taxpayers.
• A reservoir’s price tag is typically a moving target.
• Reservoir financing plans often rely on inflated population growth projections, ultimately leaving existing residents holding the bag.
• In order to remain full, a reservoir depends on increasingly uncertain rainfall. And, a reservoir loses water when high temperatures cause evaporation.
• Reservoir water is a contested resource subject to competing demands in the river system.

The report also offers five key recommendations for local leaders who seek to reduce their communities’ risks—both financial risks and closely linked water resource risks—in planning for enough clean water for the future:

• Optimize existing water infrastructure first.
• Plan for water use to decrease as a community grows.
• Pursue flexible water supply solutions, like efficiency measures.
• Demand accurate assessments of costs.
• Examine water availability to minimize resource risks.

In addition, the report shines a light on recent water supply reservoir projects that provide cautionary tales of communities burdened by expense and debt, and leaving taxpayers and ratepayers scrambling to escape a seemingly bottomless money pit.

Catawba Riverkeeper has presented proposals to the Catawba River Water Supply Project echoing many of these same themses.  In November 2011, Catawba Riverkeeper submitted comments identifying how all of the water needs can be address, at a much lower economic and environmental cost, by fixing existing leaks, entering into water supply agreements with other local governments with intakes on existing reservoirs, and improving conservation.

The report is available for download at www.AmericanRivers.org/MoneyPit.