LOS ANGELES — California Gov. Jerry Brown's recent executive order about state water restrictions is a credit positive for local water agencies, according to Moody's Investors Service.
Brown directed state water regulators to update the April 2015 water use restrictions for local water agencies across the state on May 9.
The new restrictions will be tailored to each individual water agency's specific water supply circumstances and developed with their input, which Moody's analysts viewed favorably in their report issued May 19.
"This is a long-term credit positive that will reduce rate and supply volatility in future shortages," Moody's analysts wrote.
Brown issued the executive order directing state water regulators to update the water use restrictions that had been implemented in April 2015 in response to the statewide drought.
Input from the water agencies "should result in new water conservation targets that more effectively distinguish between utilities where the water supply conditions have improved versus those located in areas where the drought remains extreme," analysts wrote.
The change also means that utilities with improved water outlooks will get some relief from the stringent conservation mandates that required an average 25% water use reduction statewide, according to the report. It also allows those utilities to sell more water, thereby increasing their operating revenues, analysts said.
