An aerial view of high water conditions at Lake Shasta and the dam in Shasta County, California. Photo taken May 20, 2025. On this date, the reservoir storage was 4,295,276 acre-feet (AF), 94 percent of the total capacity. Ken James / DWR

COURTHOUSE NEWS: Judge backs Reclamation in fight over California water contract conversions

A federal judge agreed that a 2016 law requires the Bureau of Reclamation to convert short-term contracts into permanent ones without imposing additional conditions or review.

By Edvard Pettersson, Courthouse News

A federal judge agreed on Monday with the U.S. Bureau of Reclamation that conversion of temporary water contracts from the California Central Valley Project doesn’t require a new environmental review under the National Environmental Policy Act or the Endangered Species Act.

U.S. District Judge Jennifer Thurston, a Joe Biden appointee, ruled on cross motions for summary judgment that the bureau’s interpretation of the 2016 Water Infrastructure Improvements for the Nation Act was more plausible than that of the environmental advocacy organization that sued five years ago.

“Given the layered complexity of the multiple statutory schemes at issue, it is easy to lose track of the central issues in this case,” the Fresno, California-based judge said. “The question is whether Reclamation’s obligations under the WIIN Act regarding contract conversion make it impossible for the agency to exercise discretion for the protected species’ benefit.”

In this regard, the judge said she agreed with and adopted the bureau’s interpretation that the statute requires contract conversion upon request by farmers and other water users that obtain water from the Central Valley Project and that it strips the bureau of discretion to modify any contractual right other than those related to the financial terms specifically addressed in the statute.

The WIIN Act was signed into law by President Barack Obama to, among other things, help address the historic drought in California at the time. By converting temporary water contracts into permanent ones with prepayment for construction costs, the statute would finance several water projects to promote storage and supply, flood control, desalination, and water recycling to make the state better able to cope with droughts.

It is undisputed that a principal purpose of the WIIN Act is to fund the construction of water storage projects,” Thurston said. “To further this purpose, Congress provided incentives to encourage contractors to elect to convert their water service contracts to accelerated prepayment contracts.”

The Center for Biological Diversity, Restore the Delta and the Planning and Conservation League sued in 2020, arguing that the converted water contracts lock in federal water deliveries to large agricultural water users with no consideration of the environmental consequences of making the contracts permanent.

The contractors, the nonprofits said, include Westlands Water District, which serves about 600,000 acres on the San Joaquin Valley’s west side and, as the Central Valley Project’s largest customer, uses about as much water as the entire state of New Hampshire.

The Central Valley Project is one of the world’s largest water storage and delivery systems. It collects water in Northern California, where large reservoirs hold the flow from melting snow in the Sierra Nevada, and distributes it to agricultural and urban users in Central and Southern California.

According to the environmental organizations, the project, which includes 20 reservoirs, about 500 miles of canals and aqueducts and two pumping plants, has caused widespread environmental damage by reducing freshwater flows in the San Francisco Bay Delta, blocking salmon migration and killing wildlife with toxic runoff from irrigated farmland.

Bob Wright, an attorney for Restore the Delta and the Planning and Conservation League, said the judge’s ruling erred in interpreting the WIIN Act, the Endangered Species Act and the National Environmental Policy Act.

The water diversions have adverse impacts on public health in the Delta, including worsening harmful algal blooms, on endangered and threatened fish species, and on the entire watershed,” Wright said. “Our decision-making process is already starting on whether to appeal once a judgment is entered.”