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Can New California Water Storage Projects Win State Funding?

An initial review by the California Water Commission slashed the ‘public benefits’ claimed by project applicants, prompting outrage in some quarters. Others say the process is working exactly as voters intended.

Written by Matt Weiser Published on Read time Approx. 5 minutes
The Bear River in Northern California’s Sierra Nevada foothills, shown here, is the site for the Centennial Dam project proposed by the Nevada Irrigation District.Image courtesy Nevada Irrigation District

If California taxpayers are going to spend $2.7 billion on new water storage projects, the projects had better come with many more environmental benefits.

That was the message sent by the California Water Commission, which on February 2 released its first analysis of 11 projects vying for a share of the riches. The money will come from Proposition 1, a ballot measure approved by voters in 2014, which empowered the state to issue nearly $2.7 billion in bonds for water storage, whether new reservoirs, groundwater recharge or some form of hybrid.

But according to Prop. 1, the money can only pay for “public benefits” associated with the projects, not just the cost of storing water. This includes environmental enhancements like improving streamflow for fish, the capacity to capture or convey floodwaters, recreational amenities and emergency response capabilities.

The State Water Commission is charged with vetting the public benefit claims. This is a weighty undertaking, because such a thing has never been done before.

In its initial review of the projects, the commission found that none would deliver all the public benefits claimed in their applications. Some were very far off the mark, the commission found, especially concerning environmental benefits. In a few cases, the commission actually zeroed-out the claimed benefits.

This triggered a swift backlash from the water industry and some conservative politicians in the state, who criticized the commission for setting the bar too high.

A cosponsor of the original Prop. 1 legislation, state senator Scott Wilk, R-Antelope Valley, urged the commission in a letter to revamp its application process, claiming “dereliction of the duties bestowed upon the Water Commission and its staff.”

The Association of California Water Agencies called the low rankings “deeply concerning.” State senator Jim Nielsen, R-Tehama, told the Sacramento Bee he felt “visceral anger” at the news and suggested the commission was thwarting the will of the voters.

But others said the commission is doing exactly what the voters wanted: Holding water storage projects to a higher standard, and rigorously vetting the claims they make.

“In quite a number of cases they said, ‘Well, these numbers just look too high.’ I thought it was pretty brave of them,” said Jay Lund, director of the Center for Watershed Sciences at the University of California, Davis, and a professor of engineering. “This is public money. It’s going to be coming out of the state budget for decades to come. So I’m glad to see them doing a reasonable job of it.”

The projects that took the biggest hit in the Water Commission evaluations include Pure Water San Diego, which involves recycling and storing wastewater; Centennial Dam, proposed on the Bear River by the Nevada Irrigation District; and the Willow Springs groundwater banking project proposed in the San Joaquin Valley. The water commission found all of these had no public benefits to offer, or that the claimed benefits could not be verified.

Two others were reduced to near zero, including Temperance Flat Reservoir, a new dam proposed on the San Joaquin River, which has been heavily criticized by environmental groups; and a Tulare Lake groundwater storage project in the San Joaquin Valley, which is opposed by some neighboring water users.

The best-performing projects are a proposal by the Sacramento Regional County Sanitation District to use recycled wastewater for farm irrigation, helping to recharge groundwater; and a proposal by the Inland Empire UCtilities Agency to recycle water for groundwater recharge, easing pressure on Feather River diversions. The commission reduced their public benefits by less than one-third.

Mary Wells, a cattle rancher in California’s Sites Valley in Colusa County, looks over the area that would be inundated by the proposed Sites Reservoir, one of 11 projects seeking state money for construction. (Gary Reed, Sacramento Bee)

Others fall somewhere in between these extremes. One is the Sites Reservoir project in Colusa County, which proposes to divert Sacramento River water into a new 1.8 million acre-foot off-stream reservoir. The commission rated its ecosystem benefits at only 13 percent of what the backers claimed, and its overall public benefit at 40 percent.

The biggest setback for the Sites project involved the claim that its stored water could be used at critical times to improve flows for salmon migration, and that this would ease pressure on other reservoirs to provide fishery flows, thereby stretching regional water supplies. These benefits either didn’t measure up as claimed, or could not be fully verified.

Yet Jim Watson, general manager of the Sites Joint Powers Authority, said he wasn’t entirely surprised by the scrutiny.

“We figured that with the size of the project, and some of the bold concepts that we put into our proposal, that we would have to clarify some of them,” Watson said. “We were very disappointed we were not able to be scored on environmental benefits in terms of water for salmon.”

This isn’t the end for these projects. The water commission is urging the applicants to amend their proposals, and it has set up an appeal process, with revised applications due by February 23. After that, it will conduct another review, with preliminary funding decisions expected in July.

“The commission has every confidence the information received in the coming weeks will help us fund eligible projects and the public benefits they provide,” Armando Quintero, the commission’s chair, said in a statement.

In a few cases, the shortcomings found by the commission appear to be more technical than substantive. One example is the proposal to expand the existing Los Vaqueros Reservoir, located south of Antioch and operated by Contra Costa Water District.

The project has become something of a favorite among environmental groups, because some of the additional water it proposes to store would be dedicated to wildlife refuge areas in the San Joaquin Valley. This would help hundreds of migratory bird species, as well as many other kinds of wildlife, that have been shortchanged on water deliveries for decades.

Los Vaqueros had its public benefits slashed by the commission partly because its backers used a modified computer model that was not familiar to the reviewers.

I’m confident it can overcome the analytical problems with its application,” Rachel Zwillinger, a water policy adviser at Defenders of Wildlife, said of the Los Vaqueros project. “It’s heartening to see the commission is taking their review seriously and are trying to make sure we select projects that provide real environmental benefits. I expect to see a lot of new analysis come in as a result of this appeal process.”

Some projects will probably have to make major changes to continue through the application process. This could include revising operations to produce more public benefits, or requesting less money to bring the project into alignment with the benefits it offers.

Some proponents may decide to pull their projects from the process and proceed without state funding.

The Sites Reservoir proposal, for example, already has enough funding commitments from interested water agencies. Yet Watson says he is committed to the process.

“I know the commissioners will make investment decisions in projects,” said Watson. “The fact that our biggest selling point (water for salmon) wasn’t recognized is the part that we’re working on.”

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