In 2014, California passed Proposition 1, the Water Quality, Supply, and Infrastructure Act (Act), which authorized $7.545 billion in general obligation bonds to fund ecosystem enhancement, watershed protection and restoration, water supply infrastructure projects, including surface and groundwater storage, and drinking water protection. In particular, the Act dedicated $2.7 billion for investment in water storage projects. In light of California’s new reality of less snow pack and more precipitation in the form of rain, water storage projects will play an ever-increasing role in the state’s strategy to address water supply. Funding of storage projects will be of key importance.

Water Storage Projects and the California Water Commission

The California Water Commission (CWC) is the agency responsible for allocating Proposition 1 water storage project funding. Importantly, the CWC, through the Water Storage Investment Program (WSIP), funds portions of water storage projects that provide public benefits. In particular, funding is calculated using a “public benefit ratio” (PBR). A PBR is a metric used to describe the return on investment the state would receive in the form of public benefits if the proposed storage project were funded at the requested amount. That is, the PBR reflects the ratio of monetized public benefits to the funding requested.

CWC staff performed an initial review of proposed PBRs by water storage project applicants in February 2018. That review resulted in preliminary low PBR calculations for many proposed projects. Applicants were permitted to appeal the results of the initial review by submitting additional information and addressing specific comments from the initial review process. According to the CWC, many applicants used the opportunity to submit information that helped substantiate their project’s anticipated physical benefits and their monetary value to help the CWC make an informed determination of each project’s PBR, which the CWC revealed in early May 2018.

As of May 10, CWC staff provided revised recommendations for many PBRs for proposed projects which were higher than staff’s February 2018 calculations. Projects receiving a higher PBR than initially determined include the following:

• •The Southern California Water Bank Authority’s proposed Willing Springs Water Bank Conjunctive Use Project, which is proposed as a conjunctive use and reservoir reoperation project that would integrate the State Water Project (SWP) reservoir and conveyance system with south‐of‐Delta groundwater storage.

• The Kern Fan Groundwater Storage Project, which would develop a regional water bank in the Kern Fan area to recharge and store in the Kern County Groundwater Sub-basin of the San Joaquin Valley Groundwater Basin up to 100 thousand acre-feet (TAF) of water available from the SWP.

• The Chino Basin Conjunctive Use Environmental Water Storage/Exchange Program, which would construct an advanced water treatment facility and distribution facilities that would store up to 15 thousand acre-feet per year of treated wastewater in the Chino Basin Water Bank.

• The Sites Reservoir Project, which would be a 1.81 million acre-foot off-stream surface storage reservoir located in the Sacramento Valley west of the town of Maxwell.

• Pacheco Reservoir Expansion Project, which would enlarge the existing reservoir located in southeast Santa Clara County from 6,000 AF to 141,600 AF.

• The Temperance Flat Reservoir project, which would be a new reservoir formed by constructing a new dam within the footprint of the existing Millerton Lake on the San Joaquin River, approximately 20 miles northeast of Fresno, California. The project would provide an additional 1.26 million acre-feet of water storage capacity on the San Joaquin River that would manage water supplies stored from inflow that exceeds the operational capabilities of Millerton Lake and exchanged water supplies developed through coordinated operations with statewide water systems.

• The South Sacramento County Agriculture and Habitat Lands Recycled Water, Groundwater Storage, and Conjunctive Use Program, which would store and manage groundwater while improving stream flow, enhancing groundwater-dependent riparian habitats, sustaining prime agricultural lands, and improving regional water supply reliability.

• The Los Vaqueros Reservoir Expansion Project, which would enlarge the existing reservoir, an offstream reservoir located in southeastern Contra Costa County, from 160,000 AF to 275,000 AF.

Final PBRs for two projects are not yet available: the Pure Water San Diego Program North City Phase 1, which would produce an annual average of 33,600 AF of new potable water supply for the City of San Diego; and the Tulare Lake Storage and Floodwater Protection Project, which would convey and temporarily store water in a newly constructed surface reservoir in Kings County, and then later convey water into an expanded groundwater bank in Kern County.

Conclusion and Implications

While many proposed projects received higher PBRs in the CWC staff’s second round of evaluation, and thus additional potential funding contributions from CWC, many of the projects proposed much higher PBRs than they ultimately received. It is unclear what impact, if any, CWC’s revised PBRs will have on the financial viability of the projects as they are currently proposed, or if local agencies will be compelled to redraw project plans to account for lower PBRs than those originally contemplated. Information on the projects receiving revised Public Benefit Ratios can be found at the following web address: https://cwc.ca.gov/Pages/WSIP.aspx?View={42604d50-4509-4ce7-b795-48b7fa667a8a}&SortField=Applicant_x0020_Submitted_x0020_&SortDir=Asc

(Miles Krieger, Steve Anderson)