Secretary Laird talks Cal Water Fix to San Diego County Water Authority’s Imported Water Committee

San Diego Skyline by Rufustelestrat/Wikimedia
Secretary John Laird and Deputy Secretary Karla Nemeth discuss Cal Water Fix, the Coordinated Operating Agreement, and federal legislation

san diego county water authority logoOn August 27th, Natural Resources Secretary John Laird spoke to the Imported Water Committee of the San Diego County Water Authority. On hand to answer questions also was Deputy Secretary for Water Policy Karla Nemeth.

Committee Chair Mark Watton began by noting that the San Diego County Water Authority does support a Delta fix. “The question for this board is, what is the appropriate fix that has the widest support, is affordable, and has the best chance to be implemented? What is the implication to our rate payers? How much water will we get and at what price?,” he said.

He then handed the floor over to Secretary John Laird, who gave a high-level update on the California Water Fix project. “There are always complexities, so I’m going to try and do this simply,” he said. “We were doing a Delta project that met the dual goals in the 2009 legislation, and we were doing it with a Habitat Conservation Plan that was over 50 years, and that presented some issues. Nine years of work went into that. … I think after nine years of study, we understand the limits of our knowledge and the issue is basically there’s uncertainty.”

We were convinced that you could manage the uncertainty,” he continued. “With climate change and other things coming, we thought you could have a framework that says if this, then this happens over the 50 years, but I think for some agencies, that was just hard. So basically it’s been split into two projects, and each one represents one of the dual goals, so we are being true to the dual goals.”

It’s an entirely different framework for permitting then it would be under a Habitat Conservation Plan where you had to have a higher level of assurances from many agencies,” he said. “By doing two 30-mile tunnels and by doing habitat restoration, it lowers the amount of approval that needs to be done, and you can move ahead with the habitat. … We’ve appointed a point person who was a county employee in the Delta to make sure that everything moves ahead on that. Then there’s a different level of permitting, and we have revised the EIR, it’s out there, and we want to move ahead with the project.”

The State Water Project has always been unfinished, and this finishes it,” Secretary Laird said. “This really does what probably should have been done in the initial project. About 90% of it was done and everybody’s been fighting over the last 10% for the subsequent 40 years, but it reverses the current situation, it reverses the flows in the Delta, the water quality is not as good, and we’re subject to biological opinions that with this current configuration makes it difficult and so this is a way to deal with the reverse flows, deal with the water quality, and deal with the issue of seismic safety in the event of a seismic event in the region. It gives more reliability and assurance when that happens.”

He acknowledged that a question they might have is why. “I think it goes back to what I said, a 50-year plan, given climate change, is hard to do,” he said. “This allows us to move into a permitting scheme where the government agencies are basically the operators and we have more control, it’s current configurations, and we can move.”

He noted that many might question if the project is still needed and the answer is yes for many reasons. “One is that we just passed a water bond last year that has $2.7 billion for storage, and storage south of the Delta does not work without conveyance,” he said. “In the last wet year, 2010-11, after you took what was needed for the water contracts, and what was needed for the flows, there was 800,000 acre-feet of water that could have been used above that, but there was no mechanism to take it. If there had been conveyance, that could have been moved into the system for storage; without conveyance, it flows through to the ocean, so this makes storage work.”

It is still necessary for reliability, he said. “If you look at Southern California and the three imported water sources; the Owens Valley goes to the city of LA, but the Colorado River, which has been in drought for over a decade, and the Delta – those are really necessary as a reliable portion of the portfolio to make other things work. Unless you have a reliable part of your water portfolio, recycling and conservation don’t work. … If you have an ‘all-of-the-above’ strategy, that is a very important part of it. But you can’t conserve to nothing. If you have no reliable underlying source, conservation doesn’t’ work. It is the same with recycling, so it’s very important to have a reliable part of the portfolio to make certain other parts of the portfolio work.”

I should just say that the Governor is very committed to doing this,” he said. “He wants to get it done. One of the interesting things in working for him is that he is fearless. He says what he really thinks; it doesn’t matter how unpopular it is, if he thinks it’s in the long-term interest, he is determined to spend whatever capital it takes to get it done, and this is on that list for him.”

The cost of not doing something must also be considered, he said. “If the Delta continues to crash with sea level rise and maybe the climate being drier and wetter, and the different things that happen, it’s not going to be a reliable source over time unless we can adapt and finish the water project and get this done,” he said. “There will be a cost of doing nothing. If the Delta crashes and we get a significant less amount of water, then we’re probably going to pay more for the less water. Our job is to take the project, make it reliable, try to make it affordable and spread it out over time in a way that it is a reliable source that doesn’t diminish and that can be paid for reasonably.”

Secretary Laird recalled how when he wrote his undergraduate thesis in college on the history of water development, one of the interesting things was that when the State Water Project was constructed, there was a lot of resistance in Kern County as they thought they couldn’t afford it. “History has proven those concerns very, very wrong in Kern County,” he said. “Over the life of the SWP, they have done very well. It is very affordable. It was a risk at a time, but it was one that has returned to them, and I think in the era of climate change, our challenge is to make existing water reliable and to work then with conservation and recycling other things to try and handle the growth and so it’s diversify but make sure we have a reliable source, and so that’s in essence why we’re doing this.”

That was a brief presentation to try and frame the issue for you, and I’d be happy to answer questions,” he said.

Committee Chair Mark Watton asks when updated financial information will be available.

Deputy Secretary for Water Policy Karla Nemeth replied, “I just want to say very clearly that no water agencies, including the San Diego County Water Authority, is going to be asked to support a project when it does not yet have a financing a plan and a complete understanding of the cost, so I want to make that clear up front. In terms of putting together the financing plan, we are continuing to work on the State Water Project side … we are still sorting out in particular with the Central Valley Project contractors the benefits of this project to them. That’s a key piece that we need to sort out as state and federal partners in the project, I think before we can have all the information that’s going to get to the granular level of detail that I know you all are expecting before the Board chooses whether or not to support the project.”

We’re not there yet, but I would add that I think we’ve accomplished significant amount in the last 6 months,” she said. “I think separating the project from 50-year ambition allowed us to take a closer look at the project as it exists with specific operating criteria and start to understand the cost benefit of that project, including consideration of this project really as the drought points out, as part of the risk management strategy for this particular set of supplies.”

Ms. Nemeth acknowledged there are important questions about agriculture and their ability and willingness to pay. “What we’re starting to see is how this project is interconnected with the other elements of the California Water Action Plan, including new rules that require groundwater basins to be managed sustainably into the future, and new dollars that are available for storage, and the effectiveness of those dollars with or without conveyance fix in the Delta,” she said. “Obviously with the significant money available for recycled water, we want to support those kinds of projects, and in fact, the state is there with a cost share on those projects, but those projects are more effective in terms of overall water supply security for California if they are connected to a bigger picture which includes a fix, a decade sought after fix for the SWP and CVP and the Delta.”

All of those factors are affecting how we look at the potential cost benefit of the project,” she continued. “I think everyone in this room knows very well that the value of water in California is not going down, it’s really only going up, and it’s how do we make those strategic investments across a multitude of options. How do we do that with the sensitivity to rates … and the concerns that local governments have and they should have and they need to have. As we continue to put together the bigger picture cost benefit on the project, particularly in these big user groups if you will, we will have more refined data. I think I’ll end where I started which is we absolutely do not expect that water agencies need to be in a position to support a project without the detailed information on cost and how it would fit into your own portfolio and how it would affect your own ratepayers.”

Committee member Fern Steiner asks: “I do know that the Bureau of Reclamation and the Department of Water Resources are looking at the operations agreement between the two projects and there has been some reference that might affect the tunnels and the allocation of water or of the cost. Do you have any thoughts about that?”

The question about the Coordinated Operating Agreement between the state and federal projects is certainly to the point of how complex all of this is, so I’m going to give you a complex answer,” she said. “The project itself would be constructed by DWR and jointly operated between the Bureau and DWR, and in fact, just yesterday, DWR and the Bureau submitted a petition to the State Board as part of their requirements to change the point of diversion. That is an adjudicatory process; it takes many, many months, so we wanted to get that in because we are cognizant of being in year 9 of this planning process.”

What we’re finding in the modeling information that is part of the recirculated EIR/EIS which is at a monthly time step, that that time step isn’t detailed enough to get to a more granular level on how the state and federal projects might jointly operate a facility,” she continued. “So there’s a lot of discussion and interest amongst the Central Valley Project contractors to open what’s called the Coordinated Operating Agreement between the total SWP and CVP and that involves interactions between Shasta and Oroville. It’s a bigger set of issues; that is actually an agreement that was ratified by Congress so it’s a fairly complex and lengthy thing to open up that agreement in total and try and work it into this particular process.”

We acknowledge that kind of the ‘crudeness’ of the modeling and what it’s demonstrating with this monthly time step,” she said. “I think operators across the board for the State and Central Valley Project believe that with more detailed modeling information, we can dig into the project, how it would be operated, and the benefits a little bit better, and that’s what we want to get at and that’s what we need to get at really over the course of probably the next four to six months.

Secretary Laird notes that there have been some attempts at federal legislation to get at that issue. “One of the state’s big concerns is that if you are dealing with a fixed pie of water and you relax certain things on the federal side but they are not relaxed on the state side, all it does is move a little water to federal contractors at the expense of state contractors, and we have vehemently opposed any legislation that would do that,” he said.

The bottom line is that if anything does anything to create new water, rather than just realign what the existing is … On behalf of the administration, I made some nice comments about the Feinstein Boxer effort, is they are looking at California, and they see we have a Water Action Plan and the water bond was built on it,” he said.  “It puts money in all these pots for recycling, conservation, storage, integrated regional watershed management, and it passed the legislature with only two no votes; it passed with 67% of Californians, so if the federal government could really do something that would help California, it would be to augment all the different pieces of the bond where the voters and the legislature in a bipartisan way have weighed in and said that’s what we want to do in water policy in California. If you can add to the storage or add money for recycling or add money for conservation, we’re going to love it because the people are on record, it’s a bipartisan thing. Don’t mess with reallocating a fixed pie of water, but do something that might help us in a broader level and might even help us with new water.”

Director Lewinger asks about the Delta and the negotiations, both with the state contractors and the CVP contractors. Will individual agencies have the ability to opt out?

Everybody has to decide to opt-in for there to be a project, and in opting in, the question is, do enough people opt-in that make it the project the happen, and then you go the question … then what happens to individual people within larger configurations when that happens,” he said. “One thing I meant to mention in the opening comments … one of the permutations of switching is that the governance that would have existed in the prior project doesn’t exist in this one. When you are getting permitted at a higher level, there were actually certain things that we were creating to have seats at the table for people that were doing it, and now that it is in fact a government run and operated and permitted thing, that governance went away. There’s not the same battle that exists.”

It’s presented an issue for us with the Delta counties, because the five Delta counties believe this is being done in their backyard,” he said. “They have special interests, and they wanted to be at the table, and we were just in the process of reaching an agreement before we pivoted to give them a seat at the tables … and now we’re having to figure out if in fact it’s being constructed in their backyard, how do we make sure that they have a seat at whatever the discussions are, so that nothing that’s going on with construction and other things is without it being vetted with them and they are aware and integrated with things. We are still working on that.”

Then to get back to the central part of your question, I think then it is still a discussion within the larger groups and there are some places where if in fact some people want the water that aren’t in right now, and if there is a way that somebody wants to opt-out, to figure out a way to balance that out, and that is in many ways an internal decision to the different people that contract for the water, but I am acutely aware of your concerns and we will just see where that will go,” Secretary Laird said.

Note: Other issues, including the drought, the urban water conservation regulations as they pertain to San Diego, as well as desalination were also discussed, but not covered.  Refer to the meeting audio for the entire meeting.

For more information …

Access the board agenda and listen to the meeting by clicking here.

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