Estimating Producers’ Groundwater Pumping Costs in the San Joaquin Valley

This paper presents a stylized model for the interaction of a water agency regulating a producer’s usage of water. The model motivates the importance of regulators understanding the producer’s groundwater pumping costs when making policy decisions. A model is developed for estimating the groundwater pumping costs in the San Joaquin Valley of California. This model is based on data from California’s Well Completion Report database. The groundwater cost model assumes that wells use electric well pumps and that producers are charged based on a time-of-use fee schedule. To estimate groundwater pumping costs, 12 scenarios are investigated to simulate different types of crops. Based on these scenarios, Stanislaus County has the lowest average groundwater pumping costs at $71 per acre-foot for an operation that only pumps water at maximum capacity in the non-peak winter season. The highest groundwater pumping cost is associated with Kings County at $578 per acre-foot. This estimate is based on a producer only pumping water at maximum capacity during peak summer months. An estimate was made of the per kWh charge for water under the 12 different scenarios. The cheapest electricity rate occurred in Madera County with a cost of $0.2544 per kWh. This cost is associated with a well pump being operated at maximum capacity during daylight hours for a winter crop. The most expensive electricity was $0.8522 per kWh for Kern County for a summer crop where the water is pumped only during peak electricity pricing.