As price of water skyrockets in California, this city paid $1.1M to keep faucets running through March

Aug 19, 2023

Miles of brittle, uprooted almond trees lay dead on their sides on parched farmland in Coalinga, California, as an intensifying drought, new restrictions and skyrocketing water prices are forcing farmers to sacrifice their crops. Roadside signs warn against watering front lawns as residents brace for higher water bills as the precious resource disappears.

This is what a city on the brink of running out of water looks like.

"We can't continue this. It's not sustainable for our community," Coalinga city councilman Adam Adkisson told CNN.

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Coalinga usually gets its water through an aqueduct which runs from the San Luis Reservoir, about 70 miles northwest of the city. But as the West's megadrought pushes reservoir levels to precarious new lows, the US Bureau of Reclamation this year reduced the amount of water Coalinga could take from the reservoir by 80%, city officials told CNN.

The restriction left Coalinga short about 600-acre feet of water through March 2023, which is nearly 200 million gallons, and the equivalent of about 300 Olympic-sized swimming pools.

With the city on track to run out of water by mid- to late November, officials turned to the increasingly expensive open market to make up the difference. They finalized a purchase from a California public irrigation district last week.

The city's price tag for life's most basic necessity was roughly $1.1 million dollars. Adkisson tells CNN the same amount of water used to cost $114,000.

The Nasdaq Veles California Water Index, which tracks water transactions in the state, showed the price has gone from around $200 in 2019 to more than $1,000 today for the amount of water it would take to fill half of an Olympic-sized pool.

"I was just floored," Adkisson said of their water purchase. "I could not believe they could sell water at that price — but that was actually a cheap rate, that's the cheapest rate we found."

The biggest concern is for the residents of Coalinga. It is the water residents use for life's basic activities; to bathe, cook and clean. The city announced Monday the state approved a grant request to help offset its million-dollar water bill, which will likely ease residents’ costs.

"We are a very poor community," Adkisson said. "These people out here that you see walking by, driving by, cannot afford a 1,000% increase in their water bills."

This is the first time Coalinga has had to buy water on the open market. But as the climate crisis intensifies the West's drought and rainy winters become few and far between, local leaders fear they are heading into a financially unsustainable future, where water can be sold to the highest bidder.

"Sure, there is supply and demand," Adkisson said. "But for the basic needs of humans we need the water to be at an affordable rate."

California's soaring water prices are squeezing the farmers around Coalinga, too. Many are fallowing farmland to save water which has become unaffordable.

Farmers Deedee and Tom Gruber told CNN their water allocations have decreased to amounts insufficient to grow their 11 crops, which include thirsty walnuts and almonds. The Grubers estimate the water needed to grow just one of their crops next season — walnuts — would cost them $40,000.

"It would cost us more for water than what we will get for our walnuts," Deedee Gruber told CNN.

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California farmers say water scarcity, tightening water restrictions and now skyrocketing water prices are making it impossible for farmers to grow crops at all. The Grubers believe it will culminate in two ways: bankrupt farmers and higher food prices at the nation's groceries.

From protests at the California's state capitol this week to a living room full of worried farmers, California State Senator Melissa Hurtado, a Democrat who represents part of California's southern Central Valley, has been listening to farmers’ stories about how drought and high water prices have affected them.

In an August letter, Hurtado and a bipartisan group of California legislators urged the US Justice Department to investigate "potential drought profiteering." Hurtado suspects there could be price gouging in drought-stricken western states.

In an email response to Hurtado's letter, the Justice Department said in October the complaint was "forwarded to the appropriate legal staff for further review." The agency declined comment to CNN on what if any investigative actions it might take.

"People are making money off of less water availability," Hurtado told CNN. "And that's hurting real people — real farmers and real communities."