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California Drought Squeezes Water Agencies

This map shows the trend in water storage between September 2011 and September 2014.
NASA JPL
This map shows the trend in water storage between September 2011 and September 2014.

California Drought Squeezes Water Agencies
California's punishing multi-year drought could put a financial squeeze on some of the state's water agencies.

The credit rating agency Fitch is worried the state's ongoing drought is doing more than pinching water supplies, they worry the drought is also pinching finances.

Credit analyst Andrew Ward said big water agencies like the San Diego County Water Authority are bettered prepared financially to weather the drought. He said larger agencies are quickest to raise rates if water gets scarce but some water agencies don't do that.

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"Agencies get a revolt from ratepayers who don't understand the math of more money for less water, which is a tough sell," Ward said.

The drought is pushing up the price of water and that's being felt by water agencies, Ward said.

"You'll see financial stress on lots of water agencies. But most of them have an adequate enough cushion that it's no real threats," Ward said.

Ward is most concerned about smaller water districts that aren't as financially flexible because he said smaller districts are also less likely to have a financial reserve to carry them through a long drought.