By Lois Henry, SJV Water
Residents of the Diablo Grande housing development in the foothills west of Modesto hope a possible water sale could keep water flowing to their own homes, but they need buy-in from the Kern County Water Agency.
For its part, KCWA hasn’t said yes. But it hasn’t said no.
In a July 29 letter to the attorney for Western Hills Water District, which serves Diablo Grande exclusively, KCWA states it is willing to work with the district “…if an economically, logistically and regulatorily feasible solution can be found.”
Given the complexity of the 24-year deal that first brought KCWA and Western Hills together, that could be tricky.
Back in 1998, Western Hills paid Berrenda Mesa Water District $8 million for its State Water Project contract for 8,000 acre feet a year. The Department of Water Resources, however, kiboshed the deal because it didn’t want to add a new contractor to the already overtapped system and Berrenda Mesa’s contract didn’t allow for the water to be used outside of Kern County.
That’s when KCWA stepped in. It took over the Berrenda Mesa contract and instead sold Western Hills its banked Kern River water “by exchange.”
In reality, Western Hills took state water off the California Aqueduct and KCWA then debited a like amount of river water held in its Pioneer groundwater bank.
As part of its agreement, Western Hills reimbursed KCWA for annual state transportation and operations/maintenance costs associated with that 8,000 acre feet.
It was a confusing deal even at the time it was constructed in the late 1990s.
But it likely would have continued on without concern had Diablo Grande grown to its anticipated 5,000-home buildout. Those annual state water charges would have been spread among numerous rate payers.
Instead, the 2008 market crash, an ensuing bankruptcy and lawsuits stunted Diablo Grande to just 600 homes. Residents couldn’t afford to continue paying the state charges and Western Hills’ reimbursements to KCWA stopped in 2019, racking up what KCWA says is $13 million in debt.
Residents voted in June to bump their monthly water bills to $600 in an attempt to bring that debt down. But KCWA announced it would stop delivering water at the end of this year.
Western Hills hired attorney Colin Pearce who sent a letter to KCWA putting the brakes on KCWA’s planned termination of the agreement and outlining the district’s intent to sell all, or part of, the 8,000-acre-foot water contract to repay KCWA and find a more stable, long-term supply for Diablo Grande residents.
KCWA’s July 29 response letter negates many of Pearce’s assertions but it does leave the door open for a possible water deal.
“The Agency acknowledges the provision…that allows WHWD to assign the Contract (for the 8,000 acre feet),” the letter states.
Getting there would require KCWA, the Department of Water Resources and possibly even the state Water Resources Control Board to sign off on a new place of use for that water. And it might even require analysis under the California Environmental Quality Act, according to the letter.
“With all that being said, the Agency remains willing to continue to work with WHWD,” the letter adds.
That read like a lifeline to Diablo Grande residents.
“We are hopeful that KCWA will continue to cooperate with Western Hills as Western Hills looks for practical and effective ways to satisfy its obligations to KCWA while making the most efficient and productive use of its water rights under its agreement with KCWA,” Pearce wrote in an email to SJV Water.
Still to be sorted out, however, is how much KCWA earned from selling more than 61,000 acre feet of excess Western Hills water over the years.
Diablo Grande never used the full amount of its contract water, though it paid the full state charges for that water. The excess contract water went to KCWA, which then sold it to other local ag districts, according to KCWA.
Pearce asked for a full accounting of all that excess water, which KCWA provided.
It did not provide amount it made from those sales, however. SJV Water has also asked for that information multiple times starting June 20, but KCWA has not responded.
