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Diversified Supply Sources Essential Component of Long-Term Solution to Chronic State Water ShortageIntroductionThe 2016–2017 water year will be remembered as the year it rained and rained and rained. After five years of drought, parched landscapes, sinking aquifers, mandatory water conserva-tion, it rained. Most of California is out of drought status except the South Central Coast and parts of Southern California. Those areas are considered abnormally dry or a few spots are in moderate drought status, but none are in extreme drought status requiring continuation of a declaration of drought. The state’s reservoirs have recovered although Oroville Dam is below average storage levels due to repairs on the spillways.

Last year’s storms led to Oroville Dam’s main spillway giving way and developing a large hole in February 2017. Dam operators had to reduce the amount of water flowing down the spillway to prevent further damage and for the first time used the emergency spillway. When the emergency spillway was used for the first time, intense erosion prompted officials to order an evacuation for more than 180,000 people living below the dam for their safety. Oroville did not overtop its rim and the

dam operators were able to manage the increased flows so no flooding occurred. Initial repair work met the state’s deadline for 2017 and the spillway can pass flows of 100,000 cubic-feet per second, but more work will be needed in 2018.

With so much rain last year, many thought that flooding would be a major issue and yet wildfires dominated the news the last few of months of the year. In October 2017, the Northern California counties of Napa, Sonoma, Solano, Butte, Mendoci-no, Lake, Nevada, and Yuba caught fire and an area covering approximately 245,000 acres was burned. Then in December, the Southern California counties of Ventura, Los Angeles, Santa Barbara and San Diego caught fire and approximately 281,900 acres burned, making it the largest fire ever in California. Both wildfires caused millions of dollars in damage and drew down water supplies. Surface water supplies in both areas may have contamination from firefighting suppressants and toxic materials from burned structures. The wildfires burned residential and forested areas, making them vulnerable to erosion and most probably flooding should there be a series of storms.

Oroville Spillway Repair Progress

Source: California Department of Water Resources

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Water districts may be confronted with a reduction in available water supplies because of the draw down to fight fires. There also is the possibility that some reservoir or dam supplies could be contaminated by toxic ash and require extra treatment to meet drinking water standards. Both issues could prevent the water districts from meeting the stress test required by the State Water Resources Control Board to show that they have a reliable supply of water for the next few years. Not meeting the stress test would mean the water districts would be subject to additional mandatory conservation requirements.

Meanwhile, with the drought declaration lifted, work began on developing long-term permanent conservation measures, which is one of the key goals of the Governor’s Water Act Plan (Plan). Some measures were accomplished through the regula-tory process, while others required legislation. Actions taken to implement the Plan unfolded in various arenas during the year.

Governor’s Water Action PlanThe Plan is the Governor’s road map to put California on a path to sustainable water management. The Plan was developed by the Natural Resources Agency, Environmental Protection Agency and the California Department of Food and Agriculture with much stakeholder input in 2014 and finalized in 2016. All the near- and long-term actions in the Plan center on sustaining supplies of water for people, the environment, industry and agriculture.

Key elements of the Plan include:• Make conservation a California way of life.• Increase regional self-reliance and integrated water

management across all levels of government.• Achieve the co-equal goals for the Sacramento-San Joaquin

Delta.• Protect and restore important ecosystems.• Manage and prepare for dry periods.• Expand water storage capacity and improve groundwater

management.• Increase flood protection.• Increase operational and regulatory efficiency.• Identify sustainable and integrated financing opportunities.

Actions Taken in 2017Mandatory Conservation Measures

Regulatory and legislative efforts continue to shape conserva-tion measures outlined in the state’s water plan. Permanent bans on wasteful practices, such as hosing driveways and excessive landscape watering, are now in place by executive order, through local agency ordinances or in current legislation. Restaurants will serve water only if requested, hotels ask guests to defer daily linen service, city median strips will not be watered, and ornamental water features will use non-potable water. Street cleaning for sani-tary purposes will use non-potable water as much as possible.

SB 606 (Skinner; D-Berkeley/Hertzberg; D-Van Nuys) and AB 1668 (Friedman; D-Glendale) are the current vehicles for conservation legislation that will be taken up in 2018. The bills require the State Water Resources Control Board (Board) to adopt

long-term urban water conservation standards for the efficient use of water and performance measures for commercial, industrial and institutional water use by 2021. They also establish a specific number of gallons as an initial standard for daily per capita indoor residential water use, require development of numerous reports from water districts and impose civil liability for violations. The business community worked with the authors’ staff to obtain amendments to the language concerning commercial, industrial and institutional usage; however, some sectors of the business community continue to seek further amendments.

Many of the outstanding issues concern water districts. Some issues are technical and implementation changes are needed for the districts to comply successfully. Several policy issues still outstanding include the need for a modified enforce-ment mechanism that includes penalty provisions only if the supplier does not take actions required in the Board-approved remedial plan; increasing the potable reuse credit cap higher than 10%; and during a declared drought, the Board should defer to local water district drought contingency plans.

Resolving these issues will benefit the business community because they affect how the water districts will accomplish urban water management planning and drought planning, which will in turn affect how districts will work with the business community on their commercial, industrial and institu-tional conservation measures.

Bay Delta Conservation Plan aka California WaterFixThe Bay Delta Conservation Plan, renamed California Water-Fix, was a key part of the 2009 comprehensive water package that addressed California’s long-term water strategy. It was to achieve the co-equal goals of providing a reliable source of water, and protecting, restoring and enhancing the Delta ecosystem. One of the most controversial elements of the plan is the proposal to construct two tunnels that have the capacity to move 9,000 cubic feet per second. The tunnels would divert a portion of the Sacramento River’s flow at three intakes proposed near Courtland, routing the water to existing diversion pumps near Tracy. This is to avoid reverse flows in the estuary caused by the current diversion pumps, which are one of causes of ecologi-cal troubles in the Delta.

Critics caution that the new intakes simply move the harm to endangered fish species to a different part of the estuary, damage the Delta as a community and potentially jeopardize the agricultural economy. Proponents warn that one big earthquake in the Delta would leave 25 million people living south of the Delta with very limited water supplies and millions more living in the East Bay and coastal areas whose water supplies is partially or totally dependent on the Delta in similar circum-stances. The cost to fix California’s primary water delivery system is estimated at $14.9 billion—or about $5 a month for urban water users—and will be paid for by public water agen-cies that rely on the supplies. Various water contractors have begun deciding if they wish to be a part of the plan. The major-ity have affirmed their interest, but one has opted out, causing

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PLACERCOUNTYSUTTER

COUNTY

SOLANOCOUNTY

CONTRA COSTACOUNTY

ALAMEDACOUNTY

SAN JOAQUINCOUNTY

Clarksburg

Proposed WaterFix Intakes

New Delta WaterConveyance System

Hood

Courtland

LockeWalnut Grove

SacramentoSacramento

Terminous

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Clifton CourtForebayClifton CourtForebay

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Mokelumne Aqueduct

Federal Pumping Plant

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12

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WaterFix: Improved Natural Flows

Source: CaliforniaWaterFix.com

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some concern. At publication time, the Brown administration was reported to be in negotiations to cut the project to one tunnel with a reduced carrying capacity, and a reduced cost.

For more information, go to www.californiawaterfix.com.

GroundwaterThe Sustainable Groundwater Manage-ment Act passed in 2014 lays out how the state will achieve sustainable ground-water basins. Sustainable generally means bringing the basins into balance and elimi-nating over draft. More than 99 % of the state’s high- and medium-priority basins met a key deadline to form local governing agencies. The next step is to develop a plan to reach sustainability due in 2020 for the high priority over-drafted basins and 2024 for the rest.

For more information, go to www.waterboards.ca.gov/water_issues/programs/gmp.

River FlowsThe State Water Board is in the process of updating the Water Quality Control Plan for the Bay-Delta to establish flow and water quality objectives needed to reason-ably protect beneficial uses, including fish and wildlife. There are two propos-als—one for the San Joaquin River and its tributaries, and a second one for the Sacramento River and its tributaries.

The San Joaquin River proposal was released in September 2016, drawing immediate criticism from agriculture, business and water districts, and praise from the environmental community. The proposal recommends between 30% and 50% of the river’s unimpaired flow be dedicated to fish.

A draft Sacramento River proposal was circulated in October 2016 with preliminary figures for unimpaired flow reductions ranging from 35% to 75% to improve habitat and provide flows that support native species and nonnative species. That too engendered criticism from agriculture, business and water districts and support from the environmental community. Both proposals are still in process. Together they represent a huge cut in water rights for landowners and water districts, potentially costing millions of dollars and untold damage to the agricultural and business communities.

Ideally, the Board would like to negotiate voluntary reduc-tions with water rights holders in advance of the final plans. That is unlikely as many water rights holders, water agencies and landowners have said publicly that they will challenge the

Board’s authority to impose cuts to their rights.For more information, go to www.waterboards.ca.gov/

waterrights/water_issues/programs/bay_delta.

Water StorageVoter-approved Proposition 1, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, contained $2.7 billion for storage projects. Storage is needed to control the amount and timing of water flowing through the Delta to meet endangered species requirements, which affects the amount of contracted water available for farmers and cities downstream. It also provides the opportunity to store more water in wet years to offset needs in drier years. The funding can be used only for the “public benefits” of the storage projects, such as improved water quality, flood control and habitat restoration. Groundwater and surface water projects qualify for funding.

The California Water Commission developed regulations and guidelines and started accepting applications from project proponents in August 2017. The Commission will review the applications and intends to announce which projects will receive funding in June 2018.

Water Storage Investment Program Projects

Project Claimed Public BenefitFunding Request

Total Project Cost

Sites Project Ecosystem & water quality improvements, flood control, emergency response, recreation

$1,662 M $5,176 M

Los Vaqueros Reservoir Expan‑sion

Ecosystem improvements, emergency response, recreation

$434 M $795 M

Willow Springs Water Bank Conjunctive Use Project

Ecosystem improvements, emergency response

$306 M $343 M

Temperance Flat Reservoir Project

Ecosystem improvements, flood control, emergency response, recreation

$1,330 M $2,661 M

Centennial Water Supply Project Ecosystem improvements, recreation $12 M $324 M

Pacheco Reservoir Expansion Project

Ecosystem improvements, flood control, emergency response

$485 M $969 M

Chino Basin Conjunctive Use Environmental Water Storage/Exchange Program

Ecosystem & water quality improvements, emergency response

$480 M $480 M

San Joaquin River & Tributaries Conjunctive Use

Ecosystem & water quality improvements $22 M $22 M

Tulare Lake Storage & Floodwater Protection Project

Ecosystem improvements, flood control, emergency response, recreation

$452 M $603 M

Kern Fan Groundwater Storage Project

Ecosystem improvements, emergency response

$86 M $171 M

Pure Water San Diego Program North City Phase 1

Ecosystem & water quality improvements, emergency response, recreation

$219 M $1,210 M

South Sacramento County Agri‑culture & Habitat Lands Recycled Water, Groundwater Storage, & Conjunctive Use Program

Ecosystem & water quality improvements, emergency response, recreation

$304 M $373 M

Source: California Water Commission

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For more information, visit the Commission website, www.cwc.ca.gov/Pages/WSIPSummary.aspx.

Access to Clean Drinking WaterMost of the state’s residents have drinking water that meets state and federal drinking water standards. However, there are water systems that do not. Many of those water systems are in the Central Valley and other farming areas. Disadvantaged communi-ties are disproportionately affected with the lack of safe drinking water. Many of these communities are served by small water systems that do not have the rate base to modernize their drinking water plants. In addition, many rural residents are not connected to public water systems but have private domestic wells that in some cases have gone dry during the drought or are contaminated.

Senator Bill Monning (D-Carmel) introduced SB 623 in 2017 that provides for access to safe and affordable drinking water for disadvantaged communities. The bill has two parts—access to clean drinking water and a funding source. Access can be annexation for those with dry wells to the nearest water district, help with contaminated wells, consolidation of smaller water districts to nearby larger and better-funded districts or building or upgrading existing drinking water facilities.

The funding mechanism is a tax on fertilizers and a tax on dairy/livestock that declines over time and a permanent tax on water utility bills except for those households with incomes of less than 200% of the federal poverty level. Most of the water districts oppose the bill, while most of the agricultural business community supports it. The bill is in the Assembly Appropriations Committee.

Low-Income Water Rate AssistanceUnder AB 401 (Dodd; D-Napa, Chapter 662, Statutes of 2015) the State Water Board is developing a plan for a state-wide low-income rate assistance program. Like the access issue, affordability is beyond the financial capabilities of many low-income residents of the state. The Board contracted with researchers from the University of California, Los Angeles to analyze the funding required. Initial cost estimates range from $279 million to $580 million.

All four scenarios currently being evaluated would include a tax on water utility bills except for approximately 34% of the households in California based on a 200% of the federal poverty level as the eligibility threshold. The Board must submit a report to the Legislature with its recommendations by February 2018. This program meets a key point in the state’s water plan of a reliable funding source.

What’s on the Horizon for 2018• The WaterFix hearings at the Board will continue through

June 2018. The business and agricultural communities should remain engaged in the process to ensure that the WaterFix remains on its timeline.

• Given that the Commission will be reviewing applications for water storage projects’ viability, constant monitoring of Commission activities, meetings and notices will be crucial. Attendance at meetings and public comments supporting various projects is important because in June 2018, the Commission will determine the maximum funding for which each water storage project is eligible, provided the completion of statutory require-ments and pending final selection by the Commission.

• Legislation to provide funding for access to affordable, clean drinking water for low-income communities will contin-ue as an action item in the new year. SB 623 is in the Assembly Appropriations Committee and could move early in January 2018. Along similar lines, the Board will continue working on developing a plan for funding and implementing a low-income rate assistance program. All scenarios currently being evaluated include a fee/tax on water bill based on meter size.

• Both SB 606 and AB 1669 are eligible to be brought up in January 2018. SB 606 is on Assembly Third Reading and AB 1668 in the Senate Rules Committee. Work still needs to be done to ensure that business’s water needs can be accom-modated without undo restrictions and sharp increases in costs. Previous investments in conservation practices and equipment should be acknowledged.

• The Board’s pending regulations on the San Joaquin and Sacramento rivers must be watched closely. Agriculture and business cannot absorb a loss of 35% to 75% of the river flows without severe damage to productivity.

• Legislation concerning dam safety will certainly be introduced. Critical here is how to fund necessary repairs and upgrades. Also of concern is how to motivate dam owners to make the improvements. Historically, inspections reveal needed repairs but on subsequent inspections, repairs were not completed.

CalChamber PositionThe CalChamber supports a comprehensive solution to Cali-fornia’s chronic water shortage. It is vitally important that all Californians have an adequate and reliable source of water while safeguarding the environment. Developing additional water supplies and conveyance facilities can no longer be postponed without subjecting the state to long-term economic damage. One serious earthquake or a series of Delta levee failures could leave millions of people and businesses without a water supply for the foreseeable future. Every means of providing more water should be vigorously pursued. Preparedness through diversification is the path to a comprehensive solution to California’s water future.

Staff ContactValerie NeraPolicy Advocate

valerie.nera@calchamber.comJanuary 2018