The District offers several solutions to help permittees remain compliant and avoid disincentive fees, including the ability to use credits. Credits may be used to increase authorized withdrawals that exceed a permit’s groundwater reduction requirements.

Series A Credits – Before 2001, the District issued Series A credits, which could be used for 100% of a permittee’s total water demand and expired 40 years after issuance. After an evaluation of the credits potential impact on the District’s mission to prevent future subsidence in 2001, the District discontinued issuing Series A groundwater credits and replaced them with the Series B groundwater credits.

Series B Credits – Permittees can sponsor the HGSD Water Conservation Program in exchange for Series B Credits, which they can apply during the permit renewal process to increase groundwater use without increasing the permit rate. Each sponsorship earns the permittee 84,000 gallons in Series B Credits, which may be applied for an additional 30% groundwater use during the permit term. Series B Credits are valid for 20 years from the issuance date. Municipal Utility Districts and water providers may sponsor the school program through interlocal agreements. Learn more here!

Permittees may combine Series A and Series B credits as long as they are valid and not expired.

Over-Conversion Credits (OCCs) – Permittees in Regulatory Area 3 who exceed the District’s groundwater reduction requirements may request OCCs. OCCs are issued to the permittee for an amount equal to the amount of alternative water supply utilized over and above the amount of reduction required in the District Regulatory Plan as long as the total overconversion credit requested exceeds 10 million gallons. To determine the amount of OCCs to be issued, the required conversion amount will be determined at the end of the permit term based on actual total water demand. The regular permit fee must be paid for the total amount of groundwater withdrawals authorized by the issued permit, including the amount of over-conversion credits requested or submitted. OCCs may be transferred to another permittee with an approved groundwater reduction plan within Regulatory Area 3 upon filing a registration with HGSD’s General Manager and meeting the following conditions:

  • the receiving permittee must submit an over-conversion credit transfer registration and pay the associated fee;
  • any transferred over-conversion credits must be utilized within 12 months of the date the transfer is effective; and
  • transferred over-conversion credits may only be used for 10% or less of the permittee’s total water demand for the applicable permit term.

Please review the specific requirements and conditions for credits outlined in the District Rules. 

It is possible to purchase credits on the open market. The District does not participate in the resale of credits; however, a list of organizations/individuals who have notified the District of their willingness to sell their credits to a third party is available by request.