LADWP turf rebate program 'largely a gimmick,' audit finds

The turf rebate program yields by far the lowest return on investment of all the water conservation programs offered by the Los Angeles Department of Water and Power, according to a new audit by the city controller's office.

As California water agencies have looked for ways to incentivize conservation to meet Gov. Jerry Brown's mandated savings, which were given earlier this year, turf replacement programs have emerged as a particularly popular option among both commercial and residential customers.

But an audit released Friday by L.A. City Controller Ron Galperin's office found DWP's program is "largely a gimmick" that, while perhaps successful as an advertising campaign, fell short in terms of fairness and cost effectiveness.

"If money is no object, turf replacement rebates are a relatively expedient way to way to save water. But, of course, money is an object," Galperin said in a prepared statement.

The audit found that every dollar DWP invests in its "Cash in Your Lawn" program over 10 years is estimated to save just 350 gallons of water. Other programs, such as rebates for high-efficiency appliances, yield a savings of closer to 1,700 gallons or more.

The audit calls on the city and DWP to take a closer look at the return on investment of each of its rebate programs in order to achieve more sustained and cost-effective water savings.

DWP spent $40.2 million on customer incentive and rebate programs in the 2014-15 fiscal year. Nearly $17.8 million of that money went toward turf replacement. 

"There's no question that there was an educational value to the turf replacement in the sense that it got a lot of people thinking and talking about how to reduce the watering of their lawns. But it's the responsibility of my office to look at the hard numbers," Galperin told KPCC.

While turf replacement helped residents reduce their water use by about half a gallon a day, Angelenos acting on their own and without incentives achieved cuts of 22 gallons per day. In effect, voluntary efforts accounted for 88 percent of the overall reduction in daily water use per capita, the auditors said.

In a statement Friday, the DWP defended its turf rebate program, noting that participants replaced some 32 million square feet of grass for the equivalent of more than 1 billion gallons of water savings each year — enough for 12,000 homes.

The DWP also said that the cost of the turf program rebates is lower than the cost of buying and importing water, which it argued translates to long-term savings for customers.

But Galperin countered by saying his audit found that the cost of the water savings and the cost of imported water were roughly equal, and that the two shouldn't be compared in any case.

That's because when the DWP buys water, it can bill its customers for the water and any overhead incurred. When it spends money on a savings program, there's no money coming back in to help it recoup the costs, so it loses revenue, Galperin said.

"I think you have to value the program based on what are different methodologies that are going to get you water savings, and which ones are less and which ones are more expensive," he said.

The audit laid out a number of recommendations for the city and DWP to save both water and money moving forward. Here are the highlights:

• budget and set goals for water conservation
• seek additional opportunities for water savings
• increase public education and outreach
• reconsider dependence on MWD's rebate program
• improve data accuracy and reliability

You can read the full audit below.