Chart of the month - Water Content of California Mountain Snowpack vs. Annual Spot Market Water Prices
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This month’s chart shows the effect of snowpack water content in California’s mountain ranges on spot market water prices in the state.
Since 2000, it seems the two have had an inverse relationship. For water rights holders, drier is better, as demonstrated by the 2009 price spike that coincided with the 2007-2010 drought. The average spot market price shot up to $252.54 per acre-foot in 2009, then fell precipitously as the drought subsided. By 2011, snowpack measured in April of that year (the month in which snowpack moisture content is typically at its peak) by the California Department of Water Resources reached 165 percent of the seasonal average. April 2012 data revealed snowpack water content at 55 percent of the seasonal average, meaning water rights holders could be in for a payday this year. Investor-owned utilities operating in the Golden State, on the other hand, could see their purchased water costs skyrocket. DWR announced shortly after releasing the data it would deliver only 60 percent of the water requested from the State Water Project this year.