San Diego creates state’s first water, sewer ‘capacity bank’ to boost biotech, breweries

SAN DIEGO —  San Diego will create California’s first “capacity bank” for water and sewer, allowing breweries and biotech firms to cheaply buy excess water and sewer capacity from former factories.

The City Council unanimously approved the capacity bank on Tuesday, calling it an innovative idea that will create jobs and help the city avoid expensive expansions of its sewer and water infrastructure.

“From conversations I’ve had with a lot of breweries in my district, this is going to be a very popular program,” said Councilman Chris Cate, who represents Miramar, Mira Mesa and Kearny Mesa.

The council also unanimously approved a companion proposal that geographically expands and softens the qualifications for the city’s “guaranteed water” program, which ensures local firms access to water during droughts or other kinds of shortages.

Councilman Chris Ward called the expansion “forward thinking” and praised city staff.

“It moves us from an antiquated, one-size-fits-all approach and adapts the city to the changing world around us,” Ward said.

Leaders of the local manufacturing and life sciences industries praised both programs.

Because biotech firms and breweries can’t operate effectively without water, San Diego’s vulnerability to drought makes it a potential challenge to maintain the city’s status as a hub for those businesses.

City officials said the sewer and water capacity bank is an idea that won’t cost taxpayers any money and won’t increase sewer or water rates.

The city will buy millions of gallons of “stranded,” excess water and sewer capacity from manufacturing businesses that those businesses had purchased when they hooked up to the city’s water and sewer system over the years.

Because many of those businesses have transitioned to non-manufacturing businesses that need less capacity, city officials said they expect many will be willing to sell their excess sewer and water capacity to the city.

Then the city will place that excess capacity in a “bank” and sell it at discounted rates to biotech firms, breweries and other water-dependent businesses looking to expand or open new local facilities.

The city plans to use $750,000 in former federal Enterprise Zone money as the initial capital to buy stranded capacity to start the bank. The plan is to conduct a “request for offers” to see which businesses with stranded capacity are interested in selling it.

On the guaranteed water program, the proposal would expand it beyond a few industrial areas that are now eligible and make businesses all across the city eligible.

Businesses in the program are exempt from conservation requirements and water use limitations when the city declares such actions necessary because of drought.

To be eligible, businesses must demonstrate a commitment to water conservation and agree to connect to the city’s reclaimed water pipeline, where sewage is treated so it’s clean enough for agricultural and industrial uses.

Melanie Cohn, director of regional policy for the Biocom life sciences consortium, said the guaranteed water program is important because water shutoffs can derail delicate research efforts.

“It’s really a model program that I’ve been talking to other places about,” she said.

Garrick writes for the San Diego Union-Tribune.