Water, Water Everywhere — Except In California's Reservoirs. Edward Ring On Why We Keep Losing It.

For a client base largely living in California, one fact in Edward Ring's Saturday Cross Country column is hard to ignore: with a wet early spring, California's major reservoirs are sitting at roughly 68% of average capacity — a striking underperformance given precipitation totals that in any other decade would have filled them.

Ring's essay walks through the political and regulatory causes he believes explain the gap: reservoir capacity that has not grown with population, environmental flow releases that drain stored water, and a permitting environment that makes new storage practically impossible. The essay is editorial in nature — we do not need to endorse every claim to find it useful — but its implications for the Western US water sector are concrete.

Why This Matters For Our Portfolios

Two structural reasons our client-book portfolios have carried a small Infrastructure/Water sleeve for two years running:

• Consumption is inelastic. Drought or flood, water still gets used. Utility cash flows are defensive.
• CAPEX is enormous and underway. The $1.4T grid overhaul announced earlier this year is paralleled by a multi-decade water-system modernization that Ring's column implicitly describes.

Names we watch in this sleeve:

• XYL (Xylem) — pumps, metering, treatment. The "picks-and-shovels" water play.
• AWK (American Water Works) — regulated water utility. Defensive dividend.
• WTR (Essential Utilities) — water and natural gas distribution.
• WMS (Advanced Drainage Systems) — storm-water and drainage. Infrastructure-led name.

We have not made any trades this weekend on the water sleeve. But Ring's column is worth reading alongside the Friday's utilities action as a reminder of why the defensive-infrastructure allocation has a real structural tailwind rather than a headline-driven one.