Desalination vs. Duct Tape: (Dis)Incentives to Securing Water Supplies

108 Journal - American Water Works Association, Sept. 2016, at 56

Arizona Legal Studies Discussion Paper No. 16-02

13 Pages Posted: 26 Jan 2016 Last revised: 2 Sep 2016

See all articles by Robert Glennon

Robert Glennon

University of Arizona - Rogers College of Law; PERC - Property and Environment Research Center

Clark Taylor

University of Arizona, James E. Rogers College of Law, Students

Date Written: September 1, 2016

Abstract

Water providers must increasingly turn to reuse options, water harvesting, green infrastructure, desalination, aquifer storage and recovery, and risk mitigation strategies (such as dry-year options) as they face increasing demand and a reduction in traditional water supplies. State public utility commissions should give more deference to reasonable decisions of utilities when utilities turn to unorthodox supplies. Without clear authorization from PUCs, utilities have no incentive to undertake expensive, long-term programs for securing a reliable source of water. Second-guessing by PUCs, particularly years into a project, and reluctance to allow utilities to recoup sunk costs, creates disincentives for utilities to be imaginative and proactive with programs for using unorthodox supplies. The message sent by PUCs to utilities is, “Keep your costs down: if you have a problem, go to Home Depot and buy a few cases of duct tape.”

Keywords: utility, regulatory, ratemaking, rate-recovery, deference, water, environmental, desalination, water reuse, climate, public utility commissions

Suggested Citation

Glennon, Robert and Taylor, Clark, Desalination vs. Duct Tape: (Dis)Incentives to Securing Water Supplies (September 1, 2016). 108 Journal - American Water Works Association, Sept. 2016, at 56; Arizona Legal Studies Discussion Paper No. 16-02. Available at SSRN: https://ssrn.com/abstract=2722163

Robert Glennon (Contact Author)

University of Arizona - Rogers College of Law ( email )

P.O. Box 210176
Tucson, AZ 85721-0176
United States

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Clark Taylor

University of Arizona, James E. Rogers College of Law, Students ( email )

Tucson, AZ
United States

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