What Does the CWC's Review of Water Storage Projects Mean?

Tomorrow the California Water Commission will publicly release its initial reviews of the 11 remaining applications submitted by water storage projects seeking funding from the 2014 water bond (Proposition 1).  As the San Jose Mercury News reported earlier this month, Commission staff have explained that these initial reviews found significant problems with all of the applications.  We don’t yet know the specific issues raised by Commission staff in their reviews of the applications, and it is likely that some of the reviews identified relatively minor problems that are easy to fix, rather than major flaws.  But the fact that Commission staff did not rubber stamp these applications and appear to have rigorously reviewed the applications suggests that the process is working as designed by Proposition 1. 

As a reminder, Proposition 1, the 2014 water bond, appropriated $2.7 billion of taxpayer funds to pay for providing the following potential public benefits of a dam, groundwater bank, or other water storage project: ecosystem improvements, water quality improvements, flood control, emergency response, and recreation. The water bond required that corporations, farms and cities that would get increased water supply from a water storage project pay for those benefits, generally limiting spending from the bond to a maximum of half of the total cost of a storage project (so that these beneficiaries would pay for half of the cost) and requiring that half of the bond spending be used for ecosystem benefits in the Bay-Delta watershed.  Proposition 1 did not earmark money for any specific projects, instead requiring a competitive process for awarding funding for surface or groundwater storage projects.  Proposition 1 prohibited funding for a water storage project if the environmental harm of the project was greater than the environmental benefit, requiring a measurable improvement to the Delta ecosystem, as the Association of California Water Agencies recognized during the legislative debates.

Proposition 1 marked a massive paradigm shift from the history of western water projects.  Historically, taxpayers routinely paid for projects that largely benefited a few stakeholders, subsidizing the construction of big dams that decimated California’s salmon runs and other native fish and wildlife.  NRDC supported Proposition 1 because of the substantial investments in safe drinking water, ecosystem restoration, and local and regional water supplies like groundwater cleanup and wastewater recycling, along with this major change in how Proposition 1 proposed to fund water storage projects.

After adopting final regulations implementing Proposition 1, the California Water Commission solicited applications for funding, and 12 surface and groundwater storage projects submitted applications (the Commission decided that one project was not eligible for funding).  In accordance with the Commission’s regulations and the text of Proposition 1, staff have been reviewing each of the applications, and tomorrow will release their reviews of the storage projects “public benefit ratio,” which is the ratio of the value of public benefits to the public cost share of the project. In each of these 11 applications, the project proponents all asserted that the public benefit ratio was greater than 1, meaning that the public benefits outweighed the public costs. However, according to press reports, staff reviews reduced these public benefit ratios for all of the projects, with all of them now scoring less than 1, meaning that the public costs outweigh the public benefits, and many of them scoring zero.

For some projects, this should not be a surprise.  As I wrote in 2014, Temperance Flat was a boondoggle that was economically infeasible and environmentally harmful. This dam would worsen environmental conditions in the San Joaquin River and threatens the restoration of salmon to the river, and the limited water supply from this project would be prohibitively expensive for farmers (here are NRDC on the 2014 draft EIR, and 2014 comments from the California Department of Fish and Wildlife). The application for the proposed Sites Reservoir project also has major problems; state agencies, as well as conservation and fishing organizations, recently submitted written comments explaining that the proposed Sites Reservoir project would harm salmon and other native fish in the Sacramento River and Bay-Delta, worsening ecological conditions rather than improving them (here are CEQA comments on Sites Reservoir project from the California Department of Fish and Wildlife, State Water Resources Control Board, and a coalition of fishing and conservation groups including NRDC). While this Sites Reservoir proposal has unacceptable problems, it's possible that new alternatives may be developed through the NEPA/CEQA process that could work for fisheries and the environment, although they would almost certainly yield mean diverting far less water than the proponents had hoped (as these initial modeling results from the California Department of Fish and Wildlife indicate).

But it’s important to remember that this isn’t the end of the process.  The release of these staff reviews to the public is critically important, providing transparency into how the Commission plans to spend the public’s money for public benefits.  Applicants will have several weeks to submit additional information to the Commission that responds to these reviews. Unfortunately, as of now the public will not have adequate time to review and comment on the information submitted by applicants before the Commission has the final say, and in this letter to the Commission stakeholders requested a 2 week extension of the review process to ensure that the public and Commissioners have adequate time to review all of this information.

And again, in some cases a minor flaw in the application may have resulted in the review reducing their public benefit ratio, but in other cases flawed projects submitted flawed applications.  That won’t stop boosters for Temperance Flat and other projects from trying to make their case for their flawed projects. But it appears that the staff from the California Department of Fish and Wildlife, State Water Resources Control Board, California Water Commission are doing what the voters entrusted them to do. Together with other conservation and fishing groups, NRDC will continue to make sure that the Commission follows the law in awarding funding from Proposition 1.

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