Every Drop Counts: Urban Water Retailers and the Future of California Water Conservation

Beginning January 1, 2025, the “Making Conservation a California Way of Life” regulatory framework requires urban retail water suppliers — not individual households or businesses — to adopt a series of “urban water use objectives.” And beginning January 1, 2027, the regulations require urban retail water suppliers to annually demonstrate compliance with those objectives. The objectives are calculated based on indoor residential water use; outdoor residential water use; commercial, industrial and institutional irrigation use; and potable reuse. Implementation of the objectives includes setting and meeting specific targets for reducing water use per capita, improving system efficiency, and reporting progress to state regulators. Urban retail water suppliers are also required to implement water conservation programs, support the development of drought–resilient infrastructure, and encourage customers to adopt water-saving practices such as using “climate ready” landscapes.

The regulation, adopted in 2018 by the California State Water Resource Control Board, is part of the 2018 California Water Conservation Legislation (Senate Bill 606, Assembly Bill 1688) which is a comprehensive effort by the state to address ongoing challenges of water supply and environmental sustainability due to climate change. The framework targets inefficient urban water use and aims to reduce use by 500,000 acre-feet per year by 2040, consistent with the goals of the Water Supply Strategy, the California Water Plan, the Water Resilience Portfolio, and the Climate Adaptation Strategy which all recognize the importance of “Making Conservation a California Way of Life” in safeguarding water resources and preparing California communities for more extreme drought and precipitation conditions.

Under the regulation, most large urban retail water suppliers are required to comply with individualized water conservation targets. However, certain coastal cities with mild climates and historically lower per capita water usage are projected to meet their 2040 conservation goals without additional reductions. These cities include San Francisco, San Diego, San Luis Obispo, and Oceanside. In contrast, inland regions such as the community of Atwater in Central Valley, face stringent conservation requirements due to higher water use and climate conditions.

While the regulation seeks to secure California’s water future, the framework will present challenges for urban retail water suppliers including balancing the demands of indoor residential use; outdoor residential use; and commercial, industrial, and institutional irrigation use with supply amid drought conditions, aging infrastructure, and evolving climate patterns. During drought conditions, there may also be disparities in how water restrictions impact different communities, particularly those with fewer resources. Thus, ensuring equitable access to water-saving technologies and managing customer compliance can be complex.

This framework will also present challenges for individuals, developers, and businesses in various industries. Not only will these stakeholders have to adapt to more water-efficient practices, they may also be subject to new regulations on the use of land, water, and natural resources and face new costs or restrictions that affect project timelines, environmental assessments, or resource allocation.

The “Making Conservation a California Way of Life” regulation is a key initiative to ensure the preservation of the State’s natural resources, but they could bring significant challenges for urban retail water supplies and stakeholders. These sectors will need to adapt to new policies and practices that prioritize sustainability while balancing economic and operational demands.