The privilege enjoyed by The City for a century -- the ability to draw water from the Tuolumne River, store it in Yosemite National Park and sell it to customers all over the Bay Area -- is on track to be yanked by the state next month.
California is in the third year of a severe drought, according to state water officials, who in response are poised to restrict local utilities' abilities to draw from the state's rivers and streams and put the water into storage for the first time since the late 1980s.
The City shares the Tuolumne River water it stores at the Hetch Hetchy Reservoir with farmers in the Modesto and Turlock irrigation districts -- both of which have senior rights to the water supply.
In February, the state Water Resources Control Board told utilities across the state their water rights could be "curtailed" if water supplies were too low to meet projected demand.
Under current projections, The City's water rights could be curtailed as early as June 15, according to board data, though local officials said Wednesday that there is adequate supply to meet San Francisco Public Utilities Commission water users' needs.
As a junior water-rights holder, The City is entitled to "the beer foam out of a beer mug," said SFPUC spokesman Tyrone Jue, with the irrigation districts in the valley enjoying first dibs on the beer itself.
Curtailment would mean the SFPUC would have to stop storing water in the Hetch Hetchy Reservoir in Yosemite Park, letting the irrigation districts get their allotment of water first.
These restrictions could last until the winter -- or longer, if next winter is again dry.
As things stand, the SFPUC's reservoirs are about two-thirds full, with Hetch Hetchy -- The City's main reservoir for drinking water -- at 91 percent of capacity, said Steven Ritchie, the SFPUC's assistant general manager for water.
Nonetheless, the SFPUC is in talks with the city attorney "to make sure our rights are protected" if the state does curtail The City's water rights, he said.
Last week, the water board took the first step to limit water drawn from the Sacramento-San Joaquin River Delta in order to protect salmon and other fish, a move vehemently opposed by farmers.
Some late winter and early spring storms pushed this year's rainfall to 57 percent of normal in the Tuolumne River watershed -- the second-driest year in recent record -- but that came on the heels of 2013, one of the driest calendar years ever in California.
After Gov. Jerry Brown declared a drought emergency in January, Mayor Ed Lee asked water customers in The City to cut use by 10 percent -- which hasn't happened.
The SFPUC's wholesale customers -- including the cities of San Jose and Palo Alto -- have largely continued to use water as normal, according to records, cutting use by 10 percent in only five weeks over the past six months.
The City could declare mandatory water-use cuts of 20 percent by June 15, about the same time curtailment could be declared.