Time to Reform the Unreasonable SJ River Exchange Contract

The Biden administration has an opportunity later this year to begin the process of reforming one of the most unreasonable water contracts in California: the San Joaquin River Exchange Contract. People who have never heard of the San Joaquin River Exchange Contractors may be shocked to learn that thanks to their permanent contract with the Bureau of Reclamation, these four water districts appear to be getting more water from the Bay-Delta than anyone else in California (75 percent of their maximum contract amount this year, which is more than 656,000 acre feet of water), and have been getting more water under this contract than they would be entitled to under their claimed senior water right. Last month, NRDC sent this letter requesting that the Bureau of Reclamation formally request renegotiation of the contract, as provided for in the contract. Reforming this contract is a matter of fundamental fairness and is necessary to protect California’s rivers, salmon, and the Bay-Delta.

The San Joaquin River Exchange Contractors are four irrigation districts along the San Joaquin River. Decades ago, these districts negotiated an agreement with the United States where the U.S. purchased their claimed right to divert water from the San Joaquin River, in exchange for the Bureau of Reclamation delivering substitute water from the Delta. This agreement enabled Reclamation to build Friant Dam, which resulted in the Bureau of Reclamation illegally drying up the San Joaquin River and extirpating the river’s native salmon runs, which numbered in the tens or hundreds of thousands. Drying up the river, of course, is unlawful under section 5937 of the California Fish and Game Code, which was the statutory basis for the settlement to restore the San Joaquin River.

However, whenever Reclamation cannot deliver enough water from the Delta to satisfy this bloated water contract, Reclamation delivers water from the San Joaquin River to these contractors. That happened for the first time in 2014, then again in 2015 and 2016, and again this year. As a result, the San Joaquin River is completely dried up for miles this year—because of these unreasonable contracts and resulting water deliveries to the Exchange Contractors. 

But these contracts aren’t just causing the San Joaquin River to be bone dry, they’re also unfairly hogging the water in the Bay-Delta watershed. While many agricultural contractors of the Central Valley Project are getting a 0 percent allocation this year, the Exchange Contractors are getting a 75 percent allocation. Even the Sacramento River Settlement Contractors, who likewise claim senior water rights, are getting the equivalent of an 18% allocation this year, notwithstanding the terms of their contract with the Bureau of Reclamation. As a result, it appears that the Exchange Contractors are getting more water from the Bay-Delta than anyone else this year, the legacy of the Miller & Lux cattle empire and California’s deeply inequitable water rights system. And they’re getting their water at bone cheap prices—$20 per acre foot for the first 2.5 acre feet per acre land, and $50 per acre foot for the last 0.5 acre feet of water.

However, what’s really rotten and outrageous is that in 6 of the past 10 years, the Bureau of Reclamation has allocated as much or more water to the Exchange Contractors than the entire flow of the upper San Joaquin River on an annual basis:

The Exchange Contract is supposed to provide water supply that is a “substitute” for their water rights, yet the Exchange Contractors are getting far more water under their contract than they would under their water rights. That’s particularly true because, as our letter notes, diverting 100% of the river's flow and dewatering the San Joaquin River would constitute an unreasonable use of water and violate the public Trust, as well as violating section 5937 of the Fish and Game Code. 

This contract is not just absurd and inequitable, but it’s also unreasonable under Article 10, section 2 of the State Constitution. 

Article 13 of the Exchange Contract provides that all of the terms of the Exchange Contract are subject to renegotiation and possible revision every five years, and 2022 is one of these years. Let’s hope that the Biden Administration takes this opportunity to begin the process of reforming this deeply inequitable and patently unreasonable water contract.