EDF and Rosedale-Rio Bravo Water Storage District to Build New Groundwater Trading Market

Joint project will create first trading market in Central Valley in response to Sustainable Groundwater Management Act

August 8, 2019
Ronna Kelly, (415)-293-6161, rkelly@edf.org

(BAKERSFIELD, CA – August 8, 2019) Rosedale-Rio Bravo Water Storage District (Rosedale) and Environmental Defense Fund (EDF) announced a joint pilot project today to build the first online, open-source groundwater trading platform in the Central Valley in response to the Sustainable Groundwater Management Act.

An early design of the trading platform, which is being co-created by landowners, Rosedale and EDF, will be available in September. The platform will be further tested and refined this fall during a series of workshops and mock trading sessions prompted by various scenarios.

The preliminary schedule calls for a beta version of the platform to go live in early 2020 for the landowner group to test with real trades. A final version will go live for landowners in the Rosedale district in 2021.

The Sustainable Groundwater Management Act, or SGMA, requires the state’s most critically over-drafted groundwater basins to develop groundwater sustainability plans by January 2020 to balance groundwater supply and demand within 20 years. SGMA was approved in 2014 during the last drought, when groundwater over-pumping contributed to sinking land, wells running dry and rural residents losing access to clean drinking water.

“We want to provide landowners and growers with as many tools as possible to manage their groundwater more sustainably and balance their water budget,” said Eric Averett, general manager of Rosedale. “We envision water management agencies replicating and expanding this open-source platform to serve other areas of the Central Valley and beyond.”

“Groundwater trading will be one of many strategies that will be needed to enable farmers to become much more innovative in how they manage their water. This new platform will serve as a valuable way to connect potential buyers and sellers,” said Christina Babbitt, senior manager of EDF’s California Groundwater Program. “Designing trading programs the right way from the start to protect all groundwater stakeholders, including disadvantaged communities and ecosystems, will be critical to their success.”

Rosedale serves landowners on nearly 44,000 acres west of Bakersfield in Kern County, one of the state’s most overdrawn groundwater basins. Rosedale’s water supply has historically been in balance, but the district projects an annual water shortage of approximately 5,000 acre-feet going forward. The region’s primary crops include almonds, pistachios and grapes.

How the trading platform will work

Landowners will be able to access an online account that shows their annual groundwater allocation, similar to an online dashboard for a checking account. They will be able to post an offer to sell or buy water on the platform, similar to other platforms like Craigslist or eBay. Other users can then respond to the offer, either with a counter offer or by agreeing to the initial price. A buy/sell page will show users all outstanding offers.

Users can remain anonymous when posting their initial offers and responding. As they get closer to reaching an agreement, they will need to disclose their identity in order to communicate outside the platform to sign an agreement and complete the financial transaction. After the agreement is final, they will use the platform to notify Rosedale, and the groundwater balances in the buyer and seller’s accounts will be adjusted accordingly.

All financial transactions will take place outside of the platform. Rosedale will not collect nor exchange money among buyers and sellers. The platform is being funded by Rosedale and co-developed with EDF, WestWater and Sitka Technology Group with support from the Water Foundation. Sitka was selected in a competitive bidding process.

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Environmental Defense Fund (edf.org), a leading international nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships. Connect with us on Twitter, Facebook and our Growing Returns blog.

Rosedale-Rio Bravo Water Storage District (www.rrbwsd.com) was formed in 1959 by landowners for the purpose of construction and operation of a water recharge project. The Rosedale board of directors are elected from landowners residing within their respective divisions. Nearly all of the district’s water supplies are recharged into the groundwater aquifer, enabling Rosedale to stabilize water levels, reduce pumping costs and preserve Kern County’s groundwater resources.