Department of Agricultural and Resource Economics

The Central and West Coast groundwater basins (“basins” or “Central and West Coast Basins”) are located in southern Los Angeles County. Groundwater produced from these basins provides approximately forty percent of the water supply for residents and businesses in all or parts of 43 cities. The 4 million residents in the area comprise more than ten percent of the total population of the State of California.

This report measures the economic costs and benefits of the various program elements encompassed by the proposed judgment amendments (Judgment Amendments) to pumpers extracting groundwater in the basins. Because those pumpers include water agencies, who collectively serve nearly 4 million customers the economic costs and benefits also extend to the region as a whole. The analysis calculates such costs and benefits by modeling basin storage, water supply augmentation, replenishment and water leasing activities, taking into account variations in the availability of imported water. The analysis is conducted at an aggregate level, which means the collection of all water agencies and entities in the Central and West Coast Basins. The analysis conservatively examines only the benefits that would accrue to the current holders of adjudicated groundwater rights in the Basins and does not attempt to quantify the direct or indirect benefits that may accrue to other entities (e.g., entities that may seek to access the “regional” storage space). Benefits are expressed in both annual and present value terms, with present values calculated in 2009 dollars. The potential benefits are calculated based on the use of the storage space by a groundwater right holder whether through a priority right granted under the Judgment Amendments or on a “space available, at risk of spill” basis. Finally, the time frame for the analysis is 2009-2030, the term of the Judgment Amendments.