Pondering our future with water

Nothing is more important to the long-term economic health of Southern Nevada than a dependable water supply. Chamber Chairman Michael Bonner sits down with Pat Mulroy, general manager of the Southern Nevada Water Authority, to discuss Southern Nevada's water supply, and what it means to the residents and the business community.

MB: Where do we stand today as a community in terms of long-term access to a dependable water supply?

PM: Well, that's a tough question. We're going into an era where you're never going to have that one silver bullet project. You're going to have to put together a diverse mosaic of various water resources that you can turn off and on as hydrology and weather patterns and demands dictate. We have one big advantage that many communities don't have. We, in the early '90s, adopted the approach of having a rolling 50-year water resource plan and so every single year, the board has to adopt a resource plan that looks out 50 years, so you can adjust it every year depending on how conditions change. Between the conservation efforts, continuing to pursue arrangements with our neighbors on the Colorado River – and we've made huge strides in that regard – participating in the negotiations with Mexico to be a participant, should the opportunity arise, to partner in desalination facilities in Mexico and backstopping ourselves with the in-state project, I think we're in a great position to be able to survive whatever Mother Nature may throw at us.

MB: In terms of economic development, as we try and attract new industries and new companies to Southern Nevada and encourage the growth of companies, what can you say about the sustainability of our water supply?

PM: My answer is simple. Southern Nevada has done more as a community to have a secure water supply. We look at our water resources for 50 years; we have the most aggressive conservation program anywhere in the United States and [it] has not changed the quality of life. It has not made it impossible to invest and develop new businesses in Southern Nevada. The whole community has stepped up to the plate and has elevated its water resources in terms of its awareness and its attitudes and its management practices more than any other part of the country. We understand where we are, we understand what our risks are, and we understand that we have to have a plan that securitizes us against those risks, no matter what. We are way ahead of the game.

MB: Are there types of industries that you would discourage us to attract as we diversify the economy?

PM: It all depends on what technology they use. Technology has taken us so far that I don't want to make a blanket statement like that. There are industries that use a lot more water than the ones that are here currently. I mean, any semi-conductor business needs a tremendous amount of water in the building of those semi-conductors, but would I necessarily say we don't want a semi-conductor business here? No, I'm not going to say that. At the end of the day, if you want to come into the Southwest, it's [water] just one issue you're going to have to deal with. And we're going to ask you to invest in technology. So if you're willing to come in and you're willing to embrace the new technology, I say come on in.

MB: How is conservation helping?

PM: We've conserved virtually a third of the water that we were using in 2002, despite the fact that we added 400,000 people. We've conserved more than any other metropolitan area as a percentage, anywhere. We've invested almost $200 million in paying people to take their turf out. We're one of the only communities in the United States that recycles 100 percent of its wastewater. We take it from wastewater, put it back in the lake, and bring it back as potable. For every gallon of highly treated wastewater we put in Lake Mead, we can take a gallon over our allocation out of Lake Mead. So between the turf buyback program, the restrictions on construction and our watering schedule, that's made a tremendous difference.

MB: What are some of the advantages and disadvantages of the compact Nevada has with the other six states that access the Colorado River?

PM: One state can't do something to another state because the compact provides you protection. The reverse is that the compact allows seven states to do whatever seven states can agree to do. The compact has huge flexibilities in it. When the need arises, they can make adjustments. Our big challenge right now is the negotiations we're participating in with Mexico with the State Department and [Department of the] Interior. Mexico needs to come into the Colorado River community as a full partner, with all the advantages, but with all risk exposures. Only then, once we have created a platform upon which these two countries can function with each other in a different way, can desalters begin to be constructed and water exchanges begin to be effectuated. The problem for the inland states is that those exchanges stop being possible the minute Lake Mead hits a critical elevation. There is nothing left to exchange. Everybody gets cut back, and so the ability to exchange disappears.

MB: What about desalinization? PM: To create the kind of volume of desalted water, in the absence of building nuclear power plants, is virtually impossible. To replace Southern California's supply of the state water project would require desalters every 4 to 6 miles along the entire California coast. Volumetrically, you can't get there.

MB: What is the critical importance of the third intake straw from Lake Mead to the Water District?

PM: It securitizes our ability to take water from Lake Mead. It is the last intake we will ever have to build, because it goes the deepest into the lake. We need it for two reasons: reliability and water quality. We will have three intakes. The old 1971 intake straw sits at elevation 1050. Last year, we hit 1081. The second intake straw that we completed in the '90s sits at 1,000 feet, which is as low as we could go at that time because of the lake elevation. We know we'll lose our upper intake one day; we know we are going to come close to our second intake. This [the third straw] will protect us.

MB: A topic you have to deal with frequently is bringing the water from the northern part of the state, which certainly causes a lot of emotion, down to Southern Nevada through a proposed pipeline. Why is that a critical piece of the puzzle?

PM: What's the alternative? When Mead gets down to critical elevations, let's assume we do nothing in-state for ourselves. We then go to our neighbors, having developed no in-state supply, and think that they're going to bail us out, that "ag" [agricultural] rights are simply going to disappear, that some miracle is going to happen where they want to bail us out. For us to be able to successfully navigate through the discussions of what we do below [elevation] 1025, with the objective being absolute protection of elevation 1,000, we're going to have to take a huge cut. We're going to have to be willing to take a huge cut. That cut will be predicated on Boulder City and Henderson's demands, and then we have to backfill the rest of the valley. Where is that going to come from? There are no easy answers anymore, and the West was built on moving water around. Nevada has the toughest groundwater laws in the country. Your water right is predicated on what the average inflow is into that, on an annual basis. It's called perennial yield. It is a much tougher standard to get around.

MB: In terms of the cost of the pipeline, we've seen widely divergent numbers mentioned from $3 billion to $15 billion. What is the projected cost of that pipeline today?

PM: In today's dollars, $3.2 billion. The way you get to $15 [billion] is, you look at our resource plan and you assume what the build-out will be, purely hypothetically. You assume no economic growth in the community, a stagnant economy, a stagnant population base; we had to do the worst of the worst. But you take the $3.2 billion, you increase it by 4% every single year, artificially, to where you're actually selling those bonds and then you're looking at the full payback. So in other words, I buy a house for $150,000; it's going to cost me a whole lot more over 30 years than the $150,000. At that point, under the worst conditions possible, our water rates move from the lower third in the Western United States to the halfway point. But those very same people that throw that cost out point to the desalter. Pencil out the cost of a desalter, the cost of a power plant, the cost of 400 miles of pump stations and pipes to move it into Southern Nevada. You're going to blow $3.2 billion out of the water in a nanosecond.

MB: Assuming no unusual delays like lawsuits and injunctions and things like that, from the day you get the permits, how long will it take to complete the pipeline?

PM: Ten to 15 years and right now, given the effectiveness of the conservation measures the community has embraced and our flat economy, we don't need to build it [the pipeline] until the next decade, for purposes of growth. MB: Do you think the business community has been involved enough?

PM: They've been a great partner, absolutely. I know they're going through really difficult times. But every time we've asked the business community for help, they have stepped up to the plate. We're different in this community. If you bring to them a well thought-out plan and you can justify it and they can kick the tires on it, they will step up to the plate.

MB: Is there something you'd like the business community to know that we haven't touched on already?

PM: As long as we in Southern Nevada don't let ourselves get sucked into a momentary respite in our water supply, and continue to think 50 years out and continue to think critically about it, I think that Southern Nevada is going to be in excellent shape. It's going to be up to the business community to help maintain the political will to do that. Sitting here today, we've had one good winter. But when we're 90% dependent on the Colorado River, we can't pretend that what we may think is impossible can't happen. That would be catastrophic for us.