Economic Impact Analysis: 1st Progress Report, January 4, 2001
Executive Summary


This progress report to the Idaho State Legislature and other interested parties describes an ongoing study of the economic impacts of enhanced groundwater quality protection for the Lower Portneuf River Valley (LPRV) in Bannock County, Idaho. This study was prompted by concerns about future deterioration of the groundwater quality in the aquifer which serves the residents, businesses and farmers in the Pocatello and Chubbuck areas. The primary question is whether a sensitive resource designation under the Idaho Groundwater Rule will create unacceptable economic impacts as compared with the benefits to the region. This sensitive resource designation was adopted for the Coeur d’Alene area in the Rathdrum Prairie in the early 1990s. The full economic impact study will be completed by May 2001.

 

BASELINE ECONOMIC AND DEMOGRAPHIC CONDITIONS

The study area is defined as the region which relies directly and indirectly upon the LPRV aquifer for its water supply. Exhibit II-1 in the report illustrates the study area location which runs from the Portneuf Gap in the south paralleling Interstate 15 (I-15) and ends at Tyhee to the north. This is an area of about 26 square miles.

The study area’s economic base has evolved from a dependence on transportation services to a diversified economy where higher education, manufacturing, business services, high tech and agriculture all contribute. The Bannock County economy has shown considerable growth since the early 1990s, but historical experience suggests a certain vulnerability.

Approximately 68,300 persons reside within the study area, with about 51,900 persons in the City of Pocatello. About 7,200 persons out of the 68,300 study area population have their own groundwater supply. Approximately ten percent of the housing units in the study area are on septic tanks as opposed to a sewer system; the number of households on septic tanks is increasing. The study area also has a host of water-intensive businesses. The cities of Pocatello and Chubbuck water and sewer rates are relatively low by comparison to competing cities in the Rocky Mountain region, such as Evanston, Wyoming or the Wasatch Front cities in Utah.

 

BASELINE WATER QUANTITY AND QUALITY CONDITIONS IN THE LPRV

The LPRV aquifer is a highly productive, highly permeable and relatively fast moving groundwater resource. The aquifer recharge is approximately 7.4 billion gallons (23,000 acre-feet) per year, most of which comes in the southern portion of the LPRV from the Bannock Range snowpack and precipitation which becomes lateral groundwater flow.

The considerable permeability of the LPRV geology contributes to its unusual vulnerability. The sands and gravels which compose the bulk of the overlay will readily transmit liquid spills, leaks, discharge run-off and leachate into the groundwater supply.

The LPRV aquifer is the sole source of potable water supply for the cities of Pocatello, Chubbuck, self-supplied industrial operations, agricultural operations and rural households with their own wells. Municipal and domestic water use alone is estimated at about 6.9 billion gallons (21,400 acre-feet) per year in a normal year, with an additional 0.6 to 1.3 billion gallons (2,000 to 4,000 acre-feet) per year for self-supplied industrial and agricultural operations. Hence, the aquifer recharge is in rough balance with withdrawals in the year 2000.

The water quality circumstances in the LPRV aquifer as of year-end 2000 are complex. Municipal water supply is currently good overall and meets water quality standards. However, municipal water is quite hard, with a relatively high total dissolved solids (TDS) content. Water quality monitoring by the IDEQ, IDWR and the cities of Pocatello and Chubbuck indicate certain areas of degraded water quality in the aquifer.

The more prominent, highly publicized water quality issues are better understood than other less publicized water quality concerns. There have been thirteen US EPA Superfund sites identified in the Pocatello area, all except one have been removed from the Superfund list through remediation efforts. The most prominent water quality concerns in recent history have been trichloroethylene (TCE) and perchloroethylene (PCE). The sources of this contamination are believed to have been identified and plans are being devised to eliminate further contamination.

Other constituents of concerns (COCs) include nitrate and sulfate, while rising chloride levels can be an indicator of pathways of potential contamination from surface spills and runoff. Portions of the northern and eastern parts of the LPRV aquifer have been identified as high nitrate areas by the IDEQ. Monitoring data is limited in other areas of the LPRV aquifer, but there are indications of high salts and PCEs in other areas as well as nitrate. Based upon the nature and location of the contaminants, suspected sources of human activity are septic tanks (leachate), road salt, storm run-off and isolated spills, leaks and discharge from business activity.

 

DEFINITION OF ENHANCED AQUIFER PROTECTION SCENARIO

To examine water quality effects, economic costs and benefits of LPRV protection measures, an enhanced aquifer protection scenario has been devised for the purpose of analysis. This protection scenario is based heavily upon the protection measures adopted in the Rathdrum Prairie case which received a sensitive resource designation for the aquifer in the Coeur d’Alene region.

It is important to remember that this study is the early stages and that the enhanced aquifer protection scenario will be refined over time. While the enhanced protection scenario draws heavily from the aquifer protection experience in the Rathdrum Prairie region, there are important differences between the economy in that region and the economy in the LPRV. As the study proceeds and following its conclusions, it is anticipated that extensive public discussions will lead to a modified protection strategy, if, in fact, this economic study determines that such a strategy has merit.

The enhanced aquifer protection scenario includes separate sets of specific measures which focus upon three potential contaminant sources: septic/sewer discharge, storm water and other non-domestic wastewater management, and critical materials handling. The Study Team will perform its economic cost-benefit study on the basis of this scenario as compared with baseline conditions.

 

POTENTIAL ECONOMIC COSTS, IMPACTS AND BENEFITS

The Study Team will perform the economic cost and benefit analysis toward the end of this study in Spring 2001. Based upon early research, and in consideration of the enhanced aquifer protection scenario, the Study Team believes it would be instructive to identify types of costs and benefits that will be addressed as the study proceeds.

The final report will explore direct costs and indirect costs as they affect residents, businesses and local government. Existing and new businesses and residents will be addressed. Indirect costs would include increases in taxes and fees, such as water rates, or sewer charges. The cost of doing businesses, its effects on local businesses, and their competitiveness will also be evaluated. The impact on attracting or repelling new businesses to the study area will also be assessed.

On the benefits side, the primary question relates to avoided costs with enhanced aquifer protection. That is, if nothing is done, what sort of economic costs will the region face as water quality continues to degrade? The expense of future remediation and the effects on the attractiveness of the area from a business and a quality of life standpoint will be considered.

This economic benefit cost study will be as definitive as time and resources allow. Certain components will be quantified while others will be qualitative in nature pointing to both the direction and the magnitude of the effect. The balance of benefits vs. costs will be evaluated.

 

FURTHER AREAS OF INQUIRY AND NEXT STEPS

This economic study will be subject to stated limitations and uncertainties which have been recognized at the outset. In order to more completely address the study issues, further areas of inquiry are identified in this progress report which include an examination of the applicability of the LPRV results for southern Bannock County and surveys of residents and businesses. Excluding well drilling or similar field work, additional costs might amount to $115,000. The Legislature might consider funding such research for the next fiscal year, although this initial study may be sufficient to lead to decisions about proceeding toward enhanced protection for the LPRV aquifer.

The Study Team will proceed with the next steps in the study according to the original work plan. The report will be available in May 2001.