Uncertainty in future demand as Urban Water Management Plans finalized

Uncertainty

Population growth in California has changed dramatically due to COVID and a reduction in immigration. The state’s population declined by 182,083 people in 2020, the first time since 1900.  This has resulted in large uncertainty in population projections by the Department of Finance (DOF), which are used by urban water agencies for demand projections for water supply planning.

In March 2021, DOF released updated forecasts which projected lower population growth. However, the forecasts were significantly off for 2020, projecting a population increase of 170,850.

DOF recognized the uncertainty of the 2020 forecast, stating:

To reflect the changes in migration flows resulting from federal immigration policies and in response to COVID-19, the migration series’ return to average was extended by five years to 2030. No other explicit changes were made to address COVID-19. …

Some of the most recent data are reflected, such as lower births, higher deaths, and negative net-migration in 2020. This update does not address future potential changes that may result from the pandemic. The positive growth within the series is highly dependent on migration, and political and regulatory changes enacted by the Biden Administration will take time to affect migration flows. A new projection series, with an updated baseline and assumptions, will be released in 2022 when the 2020 Census data has been released and evaluated. (p. 2.)

Metropolitan Water District of Southern California based population projections for their Urban Water Management Plan on two pre-pandemic regional reports:

  • Southern California Association of Governments (SCAG) Connect SoCal: The 2020-2045 Regional Transportation Plan/Sustainable Community Strategy (May 2020)
  • San Diego Association of Governments (SANDAG) San Diego Forward: The 2019 Federal Regional Transportation Plan (October 2019) (p. ES-3.)

MWD states:

Both SCAG and SANDAG’s forecasts were developed prior to the advent of the COVID-19 global pandemic. For this reason, assumptions about the pandemic’s effects on future growth are not reflected in the demographic forecast data used in this UWMP. Although long-term impacts are extremely uncertain, the region is currently experiencing acute and potentially lasting disruptions across a wide range of economic and lifestyle activities that in turn may unsettle pre-pandemic expectations for future household formation, migration, fertility, and life expectancy. (p. A.1-4.)

Although recognizing the uncertainty, MWD states:

…Metropolitan continues to use the May 2020 release for its planning activities. For the San Diego region, Metropolitan uses a version of SANDAG Series 14 provided by the San Diego County Water Authority. (p. A.1-4.)

It is clear that the demand projections used for MWD’s 2020 Urban Water Management Plan will change after the new DOF forecasts are available, and could be significantly lower.

References

Department of Finance Updates to Baseline 2019 Series, Department of Finance, March 5, 2021.

Metropolitan Water District of Southern California, 2020 Urban Water Management Plan, June 2021.

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