The Orange County Water District uses a unique strategy to manage the Orange County Groundwater Basin. Any retail agency, farmer, business or individual that pumps groundwater pays the Replenishment Assessment (RA) for each acre-foot (326,000 gallons) of water extracted. The RA provides most of the revenue OCWD needs to manage the groundwater basin.

OCWD controls total annual groundwater pumping with the Basin Pumping Percentage (BPP) and the Basin Equity Assessment (BEA). The BPP is calculated by dividing projected groundwater supplies by projected total water demands.

The BPP is set annually and has historically averaged about 70 percent. That is the amount set for Water Year 2015-2016, which coincides with the fiscal year, beginning in July. Therefore, those who live in north and central Orange County will be getting 70 percent of their water from local groundwater supplies and 30 percent from more costly imported water from Northern California and the Colorado River.

In addition to the RA, parties that pump above the BPP pay the Basin Equity Assessment (BEA) charge and the energy cost to pump groundwater. This makes the cost of the groundwater equivalent to purchasing imported water. This year, the RA is $322 an acre-foot. The BEA is $587 an acre-foot. The energy cost to pump groundwater is about $80 an acre-foot.

By imposing the BEA rate, OCWD incentivizes all parties to only pump groundwater up to the Basin Pumping Percentage. By setting the rates paid for groundwater, OCWD can control the amount of groundwater pumping to sustainably manage the groundwater basin.

The more retail agencies can pump from the groundwater basin, the more savings are passed on to their customers. The investment in the Groundwater Replenishment System has allowed retail agencies to increase groundwater pumping from 62 percent to 70 percent since coming online in 2008.