The California Department of Water Resources (DWR) and the U.S. Department of the Interior Bureau of Reclamation (Bureau) recently executed agreements updating the respective agencies’ coordinated operation of the federal Central Valley Project (CVP) and California State Water Project (SWP) (collectively: Projects). Specifically, the parties executed an Addendum amending the 1986 “Agreement Between the United States of America and the State of California for Coordinated Operation of the Central Valley Project and the State Water Project” generally referred to as the “Coordinated Operation Agreement, or, “COA.” The parties also executed a “Memorandum of Agreement for the Implementation of the 2008 and 2009 Biological Opinions for the Coordinated Long-Term Operation of the Central Valley Project and State Water Project” (BiOps MOA). The agreements were deemed necessary to maintain the Projects’ coordinated and operational viability in response to significant restricting regulatory changes and operating conditions that have developed over several decades.

Background

The Projects comprise two of the largest water storage, conveyance and delivery systems in the world. Following severe late-1920s drought conditions, California voters approved constructing the CVP as part of the State Water Plan. However, as the Great Depression took hold in the 1930s, the State was unable to fund the bonds required for the CVP. The United States assumed responsibility for construction of the CVP in 1937, and the State consequently assigned many of its water rights filings to the United States. The CVP Friant Dam was completed in 1944, followed by many other large CVP facilities. Today, the CVP diverts, stores, conveys and distributes waters of the Sacramento River, the American River, the Trinity River and the San Joaquin River and their tributaries for a wide variety of purposes including irrigation, municipal, domestic, industrial, environmental, flood control, hydroelectricity, salinity control, navigation and other beneficial purposes.

During improved economic conditions following World War II, California began constructing its own massive water system, the SWP. Though the SWP generally developed larger pumping capacities than the CVP, the surface water diversion rights for the SWP were generally subsequent-in-time, and therefore junior, to the CVP water rights. Today, the SWP is composed of twenty-one reservoirs and lakes and eleven other storage facilities with a combined storage capacity of over 4 million acre-feet, five hydroelectric power plants and four pumping-generating plants, and over 700 miles of major canals and aqueducts.

Tensions arose over water rights priorities and operating issues as the CVP and SWP facilities were proposed, planned and constructed. The parties also share responsibility and operation over certain facilities that serve both Projects. In order to mitigate the litigation risks potentially deleterious to both Projects, DWR and the Bureau undertook to coordinate the Projects’ operations.

The COA, which was originally signed in 1986, primarily establishes how the Projects share water quality and environmental flow obligations imposed by regulatory agencies. The COA also recognizes the need for, and requires, periodic review in order to determine whether updates are required in light of changed conditions.

Addendum to the COA

In fact, conditions have changes significantly since the COA was executed in 1986.

As described in the Addendum, both the United States and California have added extensive facilities to the CVP and SWP. The U.S. Fish & Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) issued highly-impactful Biological Opinions (BiOps) pursuant to the federal Endangered Species Act (ESA) in 2008 and 2009, respectively, which restrict the Projects’ abilities to achieve their intended water supply objectives. The California State Water Resources Control Board (SWRCB) established new Bay Delta standards restricting water exportation in order to protect aquatic Delta species. These and other complex regulatory processes continue to evolve, with intense controversy. Recent historic drought conditions also revealed certain shortcomings in the COA.

The Addendum acknowledges that the United States and California have thus far shared responsibility for meeting the requirements of these regulatory constraints, but that changed conditions warranted a review and update to the COA. The Addendum amends or expands upon several aspects of COA, primarily including:

• Establishing new allocation percentages and storage withdrawal obligations in order to meet Sacramento Valley in-basin demands based on specific water-year (wet/dry) designations.
• Establishing allocations and responsibilities for sharing export capacity during balanced and excess water conditions.
• Setting forth new terms regarding the timing, amount, transportation and utilization of water supplies reliant upon certain shared facilities.
• Requiring an update to COA Exhibit “A” to conform to Delta flow standards established by the SWRCB.
• Requiring COA Exhibit “B”, which sets forth CVP and SWP water supply figures and responsibilities, to be updated based on a joint operations study of the amendments imposed by the Addendum.
• Establishing new timeframes and triggering events requiring joint review of the Projects’ operations, as well as procedures for resolving disputes and implementing agreed-upon recommended changes.

Cost Sharing Agreement

The BiOps Agreement summarizes the key requirements imposed by the 2008 and 2009 BiOps. It further memorializes the August 2016 joint requests of DWR and the Bureau for Reinitiation of ESA Consultation on the Coordinated Long-Term Operation of the CVP and SWP. It also seeks to implement the mandate of President Trump’s October 2018 Memorandum directing the Bureau to issue a Biological Assessment by January 31, 2019 and directing FWS and NMFS to issue final BiOps within 135 days thereafter.

Key aspects of the BiOps Agreement include:

• •Identifies funding obligations for the joint and individual DWR and Bureau requirements set forth by the current FWS BiOps and NMFS BiOps, and the subsequent and/or superseding BiOps to be issued in mid-2019.

• Establishing procedures for cooperation and collaboration.

• Establishing procedures for tracking and reporting expenditures.

Conclusion and Implications

Many stakeholders, including the CVP and SWP contractors, have long expressed the need to update the COA in response to the increased regulatory burdens imposed on those Projects that have resulted in reduced water supply deliveries. Regarding these agreements, DWR Director Karla Nemeth said, “The state and federal projects are intertwined, and we have a joint interest and responsibility to ensure our water system meets California’s needs, especially as conditions change.” Perhaps the most robust aspect of these new agreements is the recognition that conditions continue to change and require greater coordination efforts to manage operation of these massive—and aging—water systems.

(Derek R. Hoffman, Michael Duane Davis)