Water transfers and the Delta Plan, part 2: The agency view ~ MAVEN'S NOTEBOOK

DWR’s Bill Croyle and State Water Board’s Tom Howard discuss the water transfers: streamlining the process, recurring single-year transfers, and groundwater substitution transfer concerns

During the development of the first Delta Plan which was adopted in 2013, one of the many issues the Delta Stewardship Council addressed was water transfers and their possible impact on the Delta and the coequal goals. Part of the discussion at the time revolved around the issue of single-year water transfers and the potential to use them as a way to evade the more stringent review of long-term transfers.

In the Delta Plan itself, the Council recognized the contribution water transfers can make to statewide water supply reliability, and recommended in WR R15 that the Department of Water Resources and the State Water Resources Control Board improve water transfer procedures by working with stakeholders to reduce procedural and administrative impediments to transfers while also protecting water rights and environmental resources. However, on the issue of single-year water transfers and whether they impacted the coequal goals and therefore should be subject to the Delta Plan’s covered action process, the Council did not feel they had all the information they needed, so a determination was made to exempt single-year transfers from the covered action process until December 31, 2016, and a request made for further information.

In the first of three panels at the September meeting of the Delta Stewardship Council, Bill Croyle, Deputy Director of Statewide Emergency Preparedness for the Department of Water Resources, and Tom Howard, Executive Director of the State Water Resources Control Board, presented a report of regarding their efforts to streamline water transfers while protecting water rights and environmental resources, as well as their assessment of the issue of recurring single-year water transfers.

Note: This is part two of four-part coverage of this series on water transfers. For previous coverage, see:

Water transfers and the Delta Plan, part 1: The basics

BILL CROYLE, Chief Deputy Director for Statewide Emergency Preparedness

Bill Croyle began by saying that over the last couple of years, a number of agencies have been working together through these difficult, historic dry conditions to facilitate water transfers. The report they have provided documents the new tools and new improvements to the transfer process that they have been able to make. He said they were making sure they were doing everything they could to meet the law and at the same time, facilitate necessary and needed transfers.

“We want to continue to work through the impediments and address those, and do that in a coordinated and collaborative manner,” he said. “The cumulative effects of water transfers is certainly all of our screen, and we’re working very hard to make sure that doesn’t occur.”

He said they were working hard to reduce the procedural and administrative process, doing everything they can to be as lean and mean and as fast as possible. “I think for better for worse, water transfers have been around a long time and the drought on a number of different forums have brought agencies, partners, buyers, and sellers and other stakeholders to the table to try and work through some of the difficult times that in the case of water transfers, have resulted in some really positive actions.”

The Governor has given his direction to streamline and improve the transfer process through the California Water Action Plan, executive orders, and drought proclamations, and the agencies are taking that direction very seriously, he said. “Certainly along the way, we want to make sure we are protecting water rights and environmental resources, and we’re making sure that we’re not injuring any parties in this process,” he said. “As for serial or recurring transfers, we work very hard to make sure that doesn’t happen, and the data that we have in our reports and on our website I think speaks to that.”

He added that they have taken several steps to be more transparent, even recently adding additional resources, but he acknowledged there is still more work to do.

DWR has provided two reports which have a lot of detail and discussion, and are the foundation for his comments today: A Report on the Background and Recent History of Water Transfers in California, and Water Transfers and the Delta Plan.

Transfers come into play about one-third to one-half the time as hydrologically we have capacity to actually move water transfers and the other part of the time we don’t, he said. “Table 2 in the July report looks at when transfers are occurring and how big are they, and so that’s been helpful to see that this is a very active market,” he said. “There’s been a lot of changes that have occurred to really improve those markets to the extent that those transfers can occur, and then there’s capacity. Unfortunately, there’s a lot of capacity within our systems right now.”

On the State Water Project side, when the allocation dropped below 50%, the water transfers kicked in, because there is transfer capacity as well as a need, he said. When Central Valley Project surface water allocations get below 40%, that’s when there is a more robust transfer market, he said.

“2014 was a banner year,” Mr. Croyle said. “People needed the water, there was a little bit more water in the system, it was the third year of a drought, and I think the water transfer system, the market, the experience, the education, and some new tools and also a high level of involvement as necessary from the executive offices of all of our agencies resulted in over 400,000 acre-feet of water being moved to where it was really needed.”

“2015 was a little more difficult,” he said. “First, reservoirs were down lower, and there were some concerns with crop idling because of the water that was in the neighborhood needed to stay there, certainly for the economic benefit of those communities but really to better manage the local resources,” he said. “Groundwater is one-third of our state’s reservoir, and with 2015 and no snowpack, it was tough. In one way, groundwater is doing what it needs to do, but also groundwater substitution is actually a very small percentage of the overall use of groundwater within this historic time.”

“Not all transfers that were proposed made it, to be clear,” he said. “We did have some new ground – some new things that we had to work through, and we spent a lot of time working on those, but they all didn’t make it. Some of those we wanted to continue to work on and to resolve those issues that were out there, but we just needed a little more time do it, and we couldn’t do it in the timelines that were left.”

In 2014, 420,000 acre-feet were transferred with 25% for municipal uses and the rest going to agriculture. In 2015, 300,000 acre-feet was transferred with 30% for municipal uses and 70% for agricultural uses. “Those are north-south transfers, but also to the west, because it’s not just going somewhere south, it’s a critical tool and asset for those on the west side of the Delta,” he said.

He then presented a chart showing the distribution of transfers between the reservoir reoperation, crop idling, and groundwater substitution transfers. “As you get into that fourth year of drought, it makes it a little bit tougher on those reservoirs when they have less water and certainly some of the lessons that we learned in 2014, we need to really manage the water that we had. As we lost the snowpack, we did not have that third of our reservoir capacity up in those mountains, and then we saw the cold water pool issue come up. There are a number of workgroups, technical teams, and executive offices of a number of agencies that worked really hard to really look at that issue and that has affected the ability to do reservoir reoperation during the 2015 period.”

He displayed a pie chart showing the breakdown of transfers between the State Water Project and the Central Valley Project, noting that in 2014, most transfers were through the State Water Project and in 2015, that flipped around a bit. “Certainly with the 0 allocations for a couple of years on the ag side, it’s made it very difficult, and for those that could get transferred water it was critical, especially as we saw some land use changes with permanent crops from row crops.”

He then presented a slide with the basic rules for transfers on it, noting there was more detail in the report. “The bottom line on this slide is that there are the protections in place,” he said. “The State Water Resources Control Board and DWR and in some cases local agencies, via their ordinances, are there to protect, and it’s the administrative process and the technical process that as the agencies work through this and enter into agreements and orders in approving these transfers ensures that we are complying with the law such as no injury. That’s an important part.”

The economy is important, he said. “What we’ve seen is the local interest, especially agriculture – we’ve seen them respond to limited water supplies and that’s factored into the water market itself. I think that’s critical,” he said.

The drought task force has been having meetings with regional officials, including meetings addressing subsidence with local water districts primarily in the Tulare Basin and southern San Joaquin Valley. “We’ve had a really good discussion about what that all means, and I think it’s important as we talk about the ordinances that can address those local concerns,” Mr. Croyle said. “I think that’s been a tool in the water transfer market process and I think it will continue to be.”

A lot of effort has gone into reducing impediments and increasing the transparency of the process, he said. They have held meetings with buyers and sellers, one on one meetings with individuals, and have worked to make templates consistent. They have made a punch list of things that can be done, and they are doing everything they can to address those.

They are also working to implement online applications, as they have done with other processes. “We’re looking at the first step or a phased approach at those online applications as being another way to really expedite receiving information but also communicating with the buyers and sellers where exactly they are at in the process,” he said. “I think that will help the communication and my hope we can collect that information electronically and process it much quicker.”

He said there is the potential to take transparency further by using different mapping tools, information databases, and other tools being developed as a result of the drought that access more data that helps foster more of a common understanding of what is or isn’t going out in the field.

Since the drought started, a lot of different groups have come together at the direction of the Governor, one of which is the Interagency Water Transfer Coordination Group which meets weekly or biweekly as necessary. “One of the most important steps is that we invited the resource agencies to participate because the concern was that they don’t know about things until they are already almost done, so how can they get involved up front,” he said. “So they are informed, they can make their recommendations and if they are concerned, they can wave that flag early and we can get in and work with the buyers and sellers to address their concerns, and that’s been really helpful.”

Although the group wasn’t as active in 2015 as there were fewer transfers, he sees the group continuing into the future, post-drought.

Mr. Croyle said that due to the difficult times, the agencies are engaged at the highest level, so they’ve been able to elevate issues up to the directors if necessary so that projects can move forward.

In regards to transparency, he said the agencies have draft guidelines in the white paper that has been in play since 2002; agency webpages are being kept updated, and capabilities will increase in the future with more robust, georeferenced database information systems.

They take protecting water rights seriously, not just for the Department but for others as well. “We have 25 years of experience doing this, so we’ve learned a lot, and the water transfer programs have changed over time,” he said. “One of the benefits in this is the buyers and sellers are much more sophisticated, they are up on the learning curve, they can reach out to each other, again the transparency has helped. Those long-term relationships have worked really well.”

With water transfers, streamflow depletion factors are an issue and are in play to make sure both the state and federal projects are protected, Mr. Croyle said. “I understand that there are some concerns with that, but the Department for better or for worse wears two hats, one of which is we do convey water on behalf of those water and sellers, and the other part is that we have responsibility under the water code on 1810 to make sure that we’re following that law,” he said. “So we have to wear that technical hat and that analysis hat, and make those recommendations, whether it’s to our own side or over to the SWRCB. We work really closely with USBR because of the projects crossing the Delta.”

The water code requirements protect the economic base of the counties involved in transfers, but another important part are the local ordinances that protect local interests, he said. There are also a number of steps taken to ensure protection of the environment such as CEQA and NEPA requirements, he said. “A NEPA is required if you’re going to use the federal system, the CEQA is required by the buyers and sellers unless they’ve fall under 1725, again those checks and balances are in play and really necessary,” he said.

The white paper contains the environmental regulations and policies, and is updated to address issues as they come up, such as giant garter snake provisions, a 20% crop idling limitation, and remnant vegetation.

The biological opinions are a concern, he said. “One of the things we’ve learned in the drought is we’ve actually seen the coordination and collaboration between some environmental concerns, where transfers weren’t going to happen because of environmental concerns and all of a sudden we flip that around, with a little rescheduling, timing, and close monitoring, then you can actually use the water transfer for the benefit of the environment,” he said. “I see that as something that will continue into the future. We need to make sure if we can, we get those multiple benefits.”

With respect to recurring or serial transfers, it’s important for us all to understand the definition, he said. “We think that we don’t have recurring temporary transfers,” he said. “We think our documentation reflects that. But there’s lots of different ways to do that, so if we need to further define what that is or isn’t, then we need to do that. We think our white paper and the actions that we take to make sure that those kind of things don’t happen works and we don’t think that occurs. … If there’s a concern, then bring it to these different agency groups and let’s work through it.”

With respect to land subsidence, the Bureau of Reclamation has put avoidance measures and controls in place, and in the white paper, we’ll be implementing those same controls, Mr. Croyle said. “We’ve seen this year that those controls worked, so through some of the more advanced monitoring, we put some resources into making sure that not only DWR wells are being monitored but we paid and funded monitoring of other wells to make sure that we could, if possible, continue those water transfers in a way that we’re not affecting concerns with land subsidence.”

“2015 is an example where the economic impact of fallowing your land at the local level had to be evaluated by the local market, and I think that happened,” he said. “We heard about projects that wanted to happen, then they would pull back, I think in part because of limited water resources, and the need to make sure that those water resources stayed in those regions for the benefit of those agricultural communities, and in some cases for environmental benefit.”

Lastly, Mr. Croyle gave his recommendations. “We want to support the existing transparent process, and if we’d be happy to take any comments or dialog with regard to how that might be improved,” he said. “I think our webtools are an amazing way to flatten the lines of communication and certainly setting expectations for realtime posting and this is being used in briefing all the way to the Governor’s office.”

“I think we need to continue to our interagency coordination and collaboration, to me that’s a win,” he said. “Integrating the fishery resources into those conversations has been super helpful.”

He noted that they can do more up-to-date posting on cross-Delta transfers, and so the Department is committed to working with USBR to make sure that more transparency is added on the federal side.

Mr. Croyle concluded with words of caution for the Council. “We’re concerned that getting involved and jumping into the middle of water transfers is going to cause a delay in some of the efforts that we feel are in place that really do streamline the process. I want to say that, hopefully received in a positive way, but I think the controls are in place … the dialog has been very productive in the last couple of years. The buyers and sellers, the other interested stakeholders, in working through those difficult things, we believe that with our existing authorities and responsibilities that we can make this thing work and make sure it works for the Delta.”

“I’ll leave it at that … “

TOM HOWARD, Executive Director of the State Water Resources Control Board

Tom Howard then added a few comments. He first addressed the efficiency of the administration of transfers. “My Board has been telling me for years that we need to make sure that the water transfers are a high priority and so we have been trying to do that as effectively as we can,” he said. He noted that in 2013 it took an average of 60 days with 30 of those days required by statute for noticing; in 2014, an executive order reduced the time frame to 15 days, so the processing time has dropped to 30 days on average in 2015.

“I find it hard to believe that we can get it out the door much faster,” he said. “I always believe you can do better, but I think we’re nibbling around the edges now. You might be able to knock a day or two off, but we’re really about as efficient administratively as we can be. And that’s because the minute it arrives, it’s a high priority and we assign people to do it and they get to work on it to get it done.”

Another reason the State Board can make it a high priority is because they do very few transfers. “In 2015, we’ve done six this year so far, and we have three pending, so I anticipate by the end of year, we’ll have processed nine transfer requests; in 2014, we processed ten transfer requests,” he said. “Because of the fact we only process post-1914 transfers, and only then if they are not in the same place of use, we just don’t get that many that apply to us.”

“I am told anecdotally that in the state, there are hundreds or thousands of transfers that occur, so depending on how you define exactly a transfer, the water board is obviously a relatively small player, at least in the number of transfers,” he said. “In terms of the amount of water, there are about 400,000 both years, so that is a substantial amount of water.”

Regarding the issue of recurring transfers, the State Board looks for that and tries to discourage that, he said. “I agree with what’s in the report, that if you look at the details of each transfer, it doesn’t appear as though there are what people would refer to as recurring transfers, but this is purely definitional in my perspective,” he said.

“Obviously there are some parties that are in the market to sell water and they are interested in selling it every year or most every year, and there are some parties who are in the market to buy water and they are interested in it most years, and so one could say that those constitute recurring transfers and that perhaps additional scrutiny should be placed on those type of things,” he said. “At the moment, we’re not doing that because we are processing them with the concept of if the transfer, even within it’s the same irrigation district, if its different lands, if its different buyers and sellers within the different districts, that we treat it as a single year 1725 transfer which is then CEQA exempt. People can disagree about that issue.”

He then turned to groundwater substitution transfers. “I think we need to do some work on this issue,” he said. “I have hard time understanding quite how the stream depletion factors were established and I think there is ongoing work associated with them. Right now there’s a streamflow depletion factor of 12 to 13%. I keep advising people to read USGS Publication Number 1376 as the basic thesis of that USGS publication is that groundwater pumping is just another way to divert surface water. It’s just another method of diversion of surface water that essentially, except in very limited circumstances, any groundwater pumping eventually becomes a depletion upon the nearest surface water body.”

“Of course, it’s highly attenuated, it can take many years depending on distance and conductivity to actually hit the surface water body, but obviously there are cumulative effects therefore that we need to be concerned about,” he said. “Basically by allowing transfers associated with groundwater substitution, we’re taking water from future surface water flows and we are using the water now. In the long term, what’s the effect that has on fish and wildlife and on legal users of water; we don’t really have a good handle on that.”

“The reality is that there is so much groundwater pumping going on that the transfers are actually a very small part of that,” he said. “All of that groundwater pumping is putting a subsequent depletion onto surface waters at some future date, and obviously it’s the overall groundwater pumping and its effect on surface water that needs to be considered, but clearly the additional amount is not all significant in the bigger scheme of things.”

“I view the SGMA … as perhaps being the correct forum to address the overall issue of surface water depletions associated with groundwater,” he said “But I think it is something we need to do more work on in transfers.”

“And those are the comments that I have … “

Discussion highlights …

Chairman Randy Fiorini then added his perspective. “Phil, Patrick and I were present three years ago or more when this issue came up about the use of our covered action authority as it relates to annual transfers, and we received conflicting information,” he said. “There was a consensus that transfers could be accelerated and dealt with in a more expedient manner, and that seemed to be reemphasized when the Governor executed his executive order a couple of years ago, but we didn’t have enough of a record to make a decision on whether covered actions should be applied to annual transfers. So now we are revisiting that, and the report that we have received that’s in the packet, that SWRCB and DWR prepared, were in direct response to the questions that our staff presented them. The questions that arose two or three years ago when we were debating this issue and didn’t have adequate information, so based on that, I want to complement Jerry and Bill and Tom for the very clear and concise and informative report that you have provided in response to the questions that we have been sitting on for some time.”

Vice Chair Phil Isenberg said that ‘ultimately and perhaps sooner than you might expect,’ there will be a legislative move to expedite the processing short-term water transfers even further. He suggested that the agency websites be standardized to use present similar information and formats of presentation. “Tom, I don’t think the legal format on the reports you do gives adequate credit for the environmental adjustments that are made in change petitions and all of that,” he said. “This format of discussion, four legal elements required, may well be the best way to tell the story about what you do so that it can be more easily understood in a short time frame. That to me is the secret of transparency; is where people are using the same information so everybody in the world, even reporters, can grab it somewhere, look at it, almost understand the details, and we come together and work things out.”

Mr. Isenberg also suggested considering a formal MOA between state agencies on the standards, formats, and other actions they have taking so that there is something that survives over time so that when it gets wet, everything gets put on the back burner and forgotten until the next time a dry year comes around.

Councilmember Mary Piepho asked if there are enough existing checks and balances to protect the Delta, its environment, and water rights.

“With respect to protecting water rights, again I would say that I have some concerns about groundwater substitution issues and their impact on water rights in the long term and fish and wildlife in the long term and I think there’s work that needs to be done,” Mr. Howard responded. “Setting that aside, to a great extent, when we look at one of these transfers, we don’t see any concerns so much about the upstream areas because generally there’s more flow in the river. While you could question when is the right time for that flow, it isn’t really detrimental with respect to fish and wildlife or legal users of water.”

“Really the concern is in the Delta, and then the question becomes how do you protect Delta resources,” Mr. Howard continued. “The way the water board has been looking at it is if you are meeting all your Delta objectives, then that’s what the water board at least at one time considered adequate to protect public trust resources. We’re in the process of taking another look at that because there have been a lot of issues associated with the existing standards potentially. Also when we did the modeling for a lot of the development of these standards 20 years ago, we didn’t throw a lot of transfers in, so here we are throwing 500,000 – 700,000 acre-feet of transfers or more in a period in a four month period so as we work to update the Bay Delta plan, we will be assuming a large transfer load into the system as well beyond just operation of the projects and how they move water.”

“There are two major issues in the Delta when it comes to water transfers,” added Jerry Johns, Department of Water Resources. “One is water quality, and the other one would be biological resource impacts. In terms of water quality, there is what they call ‘carriage water’ that is assessed. As you increase pumping to move this water south of the Delta, it tends to draw salt water into the Delta, that’s the way the system works, and each year there’s an assessment to make sure that doesn’t happen, so a portion of every transfer was 20%, this year it was 30%, of that water that moves into the Delta has to go out the Delta to repulse that seawater to maintain the water quality aspect so that’s done each year and its reevaluated in the fall on a real-time basis to correct up each year.”

“The other part of it is the biological impacts,” Mr. Johns continued. “Those were specifically addressed in the biological opinions when those consultations took place in the mid 90s – we actually included 600,000-800,000 acre-feet of water transfers in our analysis, and the fish agencies evaluated that when they developed the biological opinions. That’s why we have this water transfer window that restricts transfers only from July through September period when the fish that are at risk are simply not there in the system in any substantial numbers. That’s had an effect on transfers because transfers such as crop idling transfers that want to get moved in April and May, those don’t happen now. You have to either back the water up or take a loss in terms of when that water is developed, so it has had a chilling effect on water transfers, but the fish agencies felt that this window that they developed would be a way to protect the resources, so that has been evaluated. In addition, the Bureau when they did their EIR on long-term water transfers, they also evaluated these impacts and came to the conclusion that there wouldn’t be significant impacts, so I think it has been evaluated in a pretty robust fashion.”

Councilmember Judge Damrell asks how streamflow depletion is measured.

“You can’t measure streamflow depletion,” replied Jerry Johns. “It’s something you have to do mathematically, because it’s basically an effect that groundwater has on surface water and the best way to handle that is through mathematical modeling. The Bureau in their EIR did look at this factor based on the current groundwater models we have, and they are not great, to be perfectly frank; they are as good as we’ve got today and we’re in the process of improving DWR’s groundwater model to get a better handle on this. In their modeling what they found was a minimum streamflow depletion factor of 13%, and that’s based on the fact that a couple things: one is if you divert water in the Sacramento Valley, it’s going to have an effect on streamflow over time, and the effects diminish over time, perhaps years and decades in some cases. If you look at the Delta and the system as a whole, we’re only in balanced conditions where it really has a water supply effect about half the time. The other half of the time, we’re out of balance. There’s more water in the system then the even the projects in the Sacramento Valley can make use of and water runs out the Delta beyond the current set of standards, and those times those streamflow effects don’t really affect anybody because there’s lots of water going out the system. Flood years, for example. In most winters, we have more water in the system than we need, so while it has a streamflow effect, it doesn’t’ really have a water supply effect. And so that has to be taken into consideration.”

Mr. Johns said they are in the process of updating the models, and where there are concerns, they do a case by case analysis. “It is something that is an active consideration by both projects, and if you stand back from it a bit, the people who are impacted by this are the water projects, the Bureau and the Department, because those two agencies have to meet Delta outflow standards. If pumping groundwater has an effect on streamflow, that means more water needs to be released from reservoirs to make that up, and so the people who are impacted by it are the two water projects.”

“The other interesting thing about it is that the streamflow depletion factor provides a credit this year for an impact that’s going to occur over multiple years,” added Mr. Howard. “So it’s a little bit of a curiosity, and while it is true that most of the time it’s the Department and the Bureau that are affected, it is possible there could be local impacts could be as well, depending on where this groundwater pumping is occurring.”

Coming up tomorrow …

Dr. Bruce Herbold and the Nature Conservancy’s Sandi Matsumoto discuss the potential impacts of water transfers on the Delta’s ecosystem and wildlife.

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Water transfers and the Delta Plan, part 2: The agency view