I feel like we don't get out of our water woes by using the same strategies of the past century. The best dam sites have been developed, moving water from one dry area to another is a waste of money, and conservation can only go so far before it starts to cause real problems, and I think we're getting close to that point.
So we need to be thinking about new ideas to solve water shortages. There are two I think are very promising.
One is pulling water from floods and pumping it back into aquifers. This is being done to some extent already but we should be focusing on building infrastructure for this all across the state. The amount of water that can be stored in the ground dwarfs our reservoir storage capacity.
The second is the development of new water supplies via desalination. This is expensive and has environmental challenges to overcome, but I still think smaller plants are worth developing carefully to avoid damaging our coastal resources. We should also invest in newer tech to help do this more efficiently and with less pollution. Long term, a system of desal plants up and down the coast combined with aqueducts to move the water to inland parts of the state could solve drought permanently. But I think we need to finish decarbonizing the energy grid before this happens at scale. In the near term, there could be opportunities to build small, cheap desal plants that only run when solar power is abundant and cheap early in the day. But you'd have to keep capital expenditure very low to make this pencil out.
Also, sorry but we need to charge more for water. All this political squabbling can be solved with proper pricing. Ideally there would be progressive pricing so the more you use the more costly it becomes. That way we can impose the real costs on water hogs but keep the poor from being burdened with higher bills.