To San Francisco

The Delta

Sac

ram

ento

Riv

er

Stockton

San

Joaq

uin

River

California Aqueduct

Clifton Court Forebay

California depends on fresh water from the Sacramento-San Joaquin Delta to:

• Supply more than 22 million Californians, plus industry and agriculture

• Support $400 billion of the state’s economy

Harbinger of Potential Catastrophic Loss of Water

Water Supply Uncertainty

• Earthquakes, wind or flooding could cause a Katrina-like levee collapse flooding much of the Delta.

• 6.5 quake estimated to cause collapse of 30 levees.

• Studies predict a 66% chance of a 6.5 quake in next 50 years.

• Salt water would rush in from the bay to fill collapsed islands.

• Delta water supply becomes unusable within hours, potentially for years.

The state’s water supply flows though the Delta’s levee system.

Pumps

6.5 Earthquake – The Beginning(Delta Looking Southwest over Sacramento)

6.5 Earthquake – The Aftermath20 Islands Flooded - Saltwater Intrusion

(Delta Looking Southwest over Sacramento)

To San Francisco

The Delta

Sac

ram

ento

Riv

er

Stockton

San

Joaq

uin

River

Clifton Court Forebay

Isolated Canal Would Protect Water Supplies and Contribute to Northern Economy

• Eliminates levee failure as a threat to water supplies

• Improves water quality

• Provide flexibility to address potential impacts of climate change on water supply

• Provide better protection for Delta fish while protecting California’s economy

• Provide a mechanism for reliable water marketing by northern Californians

Building a canal around the Delta will reduce risk:

Water would move around the Delta in a canal

Wet DryPercent of time at or above

An

nu

al D

eliv

ery

(maf

)

4.1

3.7

3.3

2.9

2.5

2.1

1.6

1.2

0.8

0.4

0

Per

cen

t o

f C

on

trac

ted

Del

iver

ies

100

90

80

70

60

50

40

30

20

10

010090807060504020100 30

Current SWP Reliability

Supply Gap

Reliable Supply

Repeat of 1987 to 1992 drought = 40% supply

Repeat of 1977 (critical-dry year) = 20% supply

Water Banking: An Environmentally Friendly Physical Solution

Legal Foundation: The ability of a district or city to import water into a groundwater basin for later extraction and use without abandonment or prescription by others.

Water Districts: Important Participants in Water Supply Control

Applicable Legal Principles: Water Law of Surface Streams

• Water Rights: Usufructory Rights• Riparian Water Law - Origins in England• Appropriative Water Law - Western U.S.• California Water Law - A Blend of Both

– Pre 1914– State Water Resources Control Board & Predecessors– Constitutional Prohibition of Waste

• Prescription (analagous to adverse possession)• Abandonment

Applicable Legal Principles: Water Law - Groundwater

• Groundwater Doctrines - – Correlative Rights– Overdraft– Public Agencies and Prescription– Groundwater Banking

• Physical Put & Take• “In-Lieu” Banking

Applicable Legal Principles: Miscellaneous Water Law Issues

• Public Trust Doctrine

• Conservation/Transfer

Related Legal Issues

• Federal Endangered Species Act

• California Endangered Species Act

• CEQA - CA Environmental Quality Act

• NEPA - National Enviro. Policy Act

• Contract Law

Key Transfer Concepts

• Physical– Moving water across Delta often key– But, south of Delta transfers helpful in some situations

• Often requires some storage capability south of Delta

– Physical layout important - not necessarily a deal killer due to Exchanges

• Legal– Pre-1914 & others subject to environmental regulation– Appropriative - subject to SWRCB approval– Riparian - complicated mechanism

Market Players

• “Wholesale” Water Agencies– e.g. Kern County Water Agency

• “Retail” Water Districts– e.g. Wheeler Ridge-Maricopa WSD

• Mutual Water Companies– e.g. Westside Mutual Water Co.

• Investor Owned Utilities– e.g. California Water Service Co.

• City water departments– e.g. LA DWP

• Joint Powers Agencies– e.g. Kern Water Bank Authority

• Private owners

Transfer Issues

• Risk regarding regulatory approvals and ownership issues

• Risk of hydrological problems• Risk of facility failures• Points of delivery• Power costs• Water quality