Start-up launching experimental water marketplace in Sonoma Valley
Sarah C. Phelps
Well owners and groundwater users, big and small, face a new reality as city and county governments grapple with the brain teaser of groundwater sustainability in the wake of the state-mandated Sustainable Groundwater Management Act. In Sonoma Valley, a Groundwater Sustainability Agency (GSA) is in its infancy, and will have many questions to ask – and to answer – in the coming years as it readies a sustainability plan by the January 2022 deadline.
Into the mix comes a San Francisco-based start-up called AquaShares, developing what it hopes will redefine how Sonoma Valley and California residents and businesses use and share water in the future – a water cap and trade marketplace.
“Self managed markets have been the solution over regulations,” said Matt Kennedy from his San Francisco office. Kennedy is part of the two-man team who founded AquaShares. His partner, Jamie Workman, is an author and writer with the Environmental Defense Fund. Workman hatched the idea for AquaShares after writing Heart of Dryness, about water security struggles between the Kalahari Bushmen in Africa and Botswana’s government.
AquaShares is launching its first experimental marketplace in Sonoma Valley, with hopes of rolling it out countywide at a later date – and they are still recruiting volunteers.
Under the program, customers who choose to participate will agree on a water pumping allocation, based on past usage, and be granted water savings credits, called AquaShares, if they use water beneath a threshold. The AquaShares can then be deposited into an account, may be sold for cash in an online marketplace, donated to charity, or restored to the environment, thereby offsetting the user’s impacts.
While in-kind transfers of groundwater allocations may seem like a far-off idea, a similar marketplace has just been launched in Ventura County, and Valley of the Moon Water District (VOM) has been running an AquaShares pilot program in the Warm Springs Road area in Glen Ellen since 2009.
“This is really putting the power in the customers’ hands to see how much they want to do (to conserve) and how much they want to get rewarded,” said VOM General Manager Dan Muelrath when the program first launched. The pilot program includes 350 VOM customers.
With a $100,000 grant from the California Water Foundation, VOM installed water meters and developed an online portal where customers could see their water usage. VOM then set baselines, based on a customers’ normalized usage. Customers whose usage falls below the baseline receive a check in the mail (the value of each AquaShare credit fluctuates with supply and season).
Muelrath said that anecdotally he’s heard from customers that they really like how the online portal provides visibility of their individualized water usage. VOM is currently evaluating whether or not the marketplace component of AquaShares is valuable to the utility.
“We are always looking to be innovative and affordable to our customers and wanted to take this opportunity to explore something new. It has a huge potential if people will take the time to implement it,” said Muelrath.
AquaShares already has a handful of Sonoma Valley groundwater users willing to participate in its new experimental marketplace, and are looking for more. This first cohort will walk through the process of designing the market’s parameters and rules. Just as in the VOM pilot program, AquaShares will offer an online platform to display members’ metered water usage against critically important basin data, like allocation, and AquaShare credit earnings.
“To get started, what I care about is a diverse, well-represented group; those who are knowledgeable and influential in the community,” said Kennedy. The more diverse the group of users, the better the experimental marketplace could represent a real world one. With a few years of data and experience under their belts, AquaShares hopes to gain the GSA’s buy-in at a later date.
Find out more about AquaShares at aquashares.com or email firstname.lastname@example.org.