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Association of California Water Agencies

2010 Fall Conference and Exhibition

Remarks Delivered By:
Mike Connor, Commissioner

Association of California Water Agencies
Indian Wells, California

December 02, 2010

Commissioner Mike Connor Association of California Water Agencies 2010 Fall Conference and Exhibition Dec. 2, 2010 Indian Wells, Calif.

Obviously, I'd like to thank you for giving me an opportunity to come and talk about the myriad of issues facing California, and water, and I will try to keep it relatively brief and have an active Q&A session, at which point I'll probably regret that I suggested an active Q&A session, but we'll take it from there, and one step at a time.

I guess before starting, I'm going to take the bait on some of the political changes going on in Washington, D.C., which are very serious, and they occur for serious reasons, and they reflect kind of, I think, a sense of balance that the country is constantly striving for.

But I just have to say, reflecting on my 8 years in the U.S. Senate, I just have to say the notion of some people looking at a Senate divided 53-47 and thinking that that's been some watershed moment, to me, just doesn't strike in reality given the 8 years that I spent there.

I spent -- let's see, I went over there, it was 51-49 Republicans. Five days later, it was 51-49 Democrats because Jim Jeffords had switched parties. Then in 2002, the Democrats lost and it flipped back to 51-49 Republicans. Then we got slaughtered in 2004 and it was 55-45 Republican and Democrats, and then in 2006, it was once again 5149.

And I stuck around long enough in the 111th Congress to experience probably about two or three months of the supermajority, but that was quite a rarity.

And I say that just because -- in the House, you know, for 6 of the years I was there was all Republican, all of the time, and the reason I mention that is -- politics settle down, things settle down, I'm an optimist about that and we got a heck of a lot of business done in the 8 years that I was there. So, sometimes it takes a lot of patience, but at the end of the day -- particularly when you have both political parties invested in governing this country, it tends to result in good projects, and good policies rising to the top with respect to legislation, and people have a need and an obligation to get things moving. And so, that's my political reflection, based on a little bit of experience -- others have different experiences -- but I'm hopeful, I know it will be turbulent and controversy for awhile, it always is when there's a major flip like happened with this most recent election, but overall, I'm hopeful that we'll get beyond that and we'll get to the business of governing, which is what it's all about, from my perspective.

Last night I was coming in late on a flight and -- there he is, Spreck (Spreck Rosekrans, Economic Analyst at Environmental Defense Fund), I was going to mention -- so I talked to Spreck in the airport in San Francisco as we were flying down here, and then I caught a cab with him and he -- of course, of the conversation he said, "Well, what else have you got going on besides California water issues?" To which I paused -- and I had, ultimately -- I've been accused before of being the Commissioner of California -- of the Bureau of Reclamation for California only, so I certainly developed -- caught my balance and articulated a while number of issues that are affecting other areas of the West, of which there are certainly many. But the reality is, given Bay Delta, given Colorado River, given the Klamath Basin and its association with the Trinity River Basin, et cetera, there is a lot going on in California. It tends to be -- because of the seriousness of the issues and the stakes involved with the 8th-largest economy in the world, it tends to rise to the level of a lot of Washington, D.C. interests and the need for a lot of focus. And so, needless to say, I spend a lot of time on California water issues; I spend a lot of time in California. I'm looking at the 2011 -- the 2010 tax season to see if I actually have to pay income taxes in California -- At that point in time I might think that I need to pull back a little if that tends to be the case.

But the seriousness of the issues, I mentioned, and the reality is that, you know, some people would characterize them as problems, and I would just look at them as realities -- realities that we have to deal with. Realities are, we've had increasing population, we have changing -- or new respect for -- certain environmental values. We have competing economic interests -- some of the environmental values have to do with competing economic interests: fisheries versus farmers, etcetera, and we have an aging infrastructure -- water resource infrastructure -- in this country that is raising issues that we need to deal with. So, we've got all of these realities that we're trying to deal with, and the flex, now, has been taken out of the system; the flex being whatever reservoir capacity or backup water systems, or play in the system that we have is gone now with the competing demands that we have these days. And for that reason, dealing with these realities, I think, is more difficult in this day and age than it's been historically. And certainly drought and climate change impacts -- particularly as things increase, and we look at changing water supply patterns, reductions in water supply, increasing demands because of increasing temperatures, etcetera, that's going to further exacerbate the problems that we have.

So, I think -- I just have to say, also, as an aside, I think Pat Mulroy's (General Manager, Southern Nevada Water Authority and Las Vegas Valley Water District) talk today at lunch was just absolutely terrific, riveting, on- point, and I don't think anybody can accuse Pat of being an alarmist. She's living this and she's going -- living in it year to year, and everything she's been concerned about seems to be coming to play. And while I certainly -- as the head of the Bureau of Reclamation -- bear a large responsibility for trying to ensure that this organization is addressing those challenges -- she's on the front lines, and it affects local communities quicker than anyone else, and it spreads from there. So, I think the message that she had today was a very realistic one, and I think she articulated it quite well.

So, what are we doing about all of these things? I just want to touch on the major issue areas in California. I tend to ramble on, so I'm going to hit the Bay Delta set of issues, I'm going to hit the Colorado River, and then we'll see what we can say about the Klamath and some other things that are going on, because I know Andy can't wait to get up here and do his spiel, too. First of all, I'd like to say, before I get into that, I am particularly lucky in California's set of issues of having outstanding regional directors who I rely on immensely, whose judgment and experience and ability to solve problems as fast as they come up just are -- allow us to focus on long-term solutions. And Lori Gray is our regional director in the Lower Colorado River Basin and Don Glaser is not here right now.

Don, as all of you know, is our Pacific Region Regional Director, and from that standpoint, California is in good hands and those people are just terrific to work for. And it's one of the reasons I consider my opportunity, here, in the Obama Administration to run the Bureau of Reclamation as one of the best jobs around because of the team that I -- that was in place, that I got to work with. And, of course, my predecessor, Bob Johnson, deserves a lot of credit for that, too, because I got to come in and take over a very well- run and managed agency, and Bob's terrific, too. He's provided great advice as I've taken over this role.

Sacramento-San Joaquin Delta -- what are we doing? When I tend to think about Reclamation's role, we've got a lot of things going on in the Delta, but as always, I think one of the primary things that Reclamation has to be focused on is water supply. And we've gotten through the 2010 water year in much better situation, much better than we had in 2009. The 3-year drought -- although it lasted through last year, last calendar year and kind of left us in a bad situation rolling in to 2010, obviously we got a lot of relief in the March and April timeframe which dramatically changed our allocations from where they started with -- at 5 percent south of Delta for -- those water service contractors who are viewed as the least senior on the system -- ultimately we got them up to 45 percent during the course of the year.

A lot of that is pure luck with hydrology and I certainly recognize that. But I think we did things very differently with respect to how they've been done in the past -- trying to get information out as quickly as possible. We were a little slow in getting out our initial allocation, usually we come out with a water supply outlook on January 20th, follow it up with a first allocation around February 20th. We really didn't deal with the allocations itself until February 26th of this past year. But, from that point on, we continuously assessed storm events; we tried to make allocation decisions, not on a monthly basis that's based on our timeline, but on a timeline that would work well for those still trying to make planting decisions, et cetera, and make their water supply decisions for 2010.

And so, I think that was something we did in consultation with a lot of water users, a lot of the representatives in Congress who are pushing us constantly to do things a little differently. We've also tried to look at the implementation of the biological opinions, and try and improve the data sets in which we are operating to make better decisions, because there's a range of how you operate under those biological opinions, I think that was helpful. And then thankfully, all of these actions that we were trying to take on the ground were helped, immensely, by the pure hydrology.

This year, as we go into the water year, the State just released their initial allocation, I think they did that at the end of November and they started off with a 25 percent allocation for 2011 -- once again, a great and vast improvement over the 5 percent that they started off with last year.

Our reservoirs are in great shape. They are not at capacity, but they rarely are at this time of year. We're at an excess of 100 percent capacity at each of our reservoirs in the Central Valley Project, except for New Maloney's which is at 83 percent of the 15-year average -- and we're talking about 15-year average right now. All of the rest of them are above 100 percent, including Shasta and Folsom, our two real workhorses which are at the124 and 130 percent respectively. So, we head into the water year 2011 in very good shape.

California's precipitation right now, in this water year, is 165 percent of average. So the bottom line is, we're going to be in a better shape in our initial allocations when we start next February than we were last year. Where it still rains and we still need a lot of the hydrology to play out. And I was on a phone call with all of the Federal agencies yesterday giving this same spiel and my caution was, "Last year at this time things looked devastating as far as water supply, and it turned around quickly. This year things look good right now, and it can turn around just as quickly if things dry up. So, we just have to kind of keep that in mind and let things play out, as they will.

In addition to the water supply outlook, we're going to continue along what we've been doing with respect to the management activities that Don Glazier and his team have been leading with Mark Cowen and his team at DWR in bringing in all of the stakeholders. We're looking at additional allocation-enhancing actions and actions that will just add water supply to the system. We want to plan for the worst-case scenario, and some of those things that we would plan for, such as transfers, such as source-shifting which gives us certain flexibility in the system -- those things may be unneeded if we're in a very good water year again.

But there's -- sometimes they are still needed, because even in a decent average water year like last year, once again, we were on at 45 percent allocation south of Delta.

So, look for those, as we move forward. As I mentioned, we've got a timeline for when we're going to start providing our water supply outlook -- in January, mid-January, and when we do our first allocation in mid-February. We're also going to be putting out papers indicating these additional actions that we expect to move forward with.

So, that's kind of the game plan with respect to 2011. We've improved our communication, we've improved our actions on the ground, and we certainly hope that makes a difference, along with the hydrology, in getting us through 2011.

I'm going to kind of take this out of order and step to the long term. We want to get through next year; we want to be able to focus on the long term.

And one of the things that is most central to California's water crisis in our hope in making great progress in helping to resolve California's water crisis is the Bay Delta Conservation Plan that a lot of hopes pinned on that whole process. Up until this point in time, it's been a very good process, with a lot of diverse interests coming together in recognition of California's long-term needs. The Interior Department simply believes that the BDCP process and its ultimate result is the best hope right now for making the biggest strides on any one set of issues in California and dealing with California's water needs.

And we look at it, and we have tried to keep our agencies together in collaborating and focused on completing a sound, science-based plan. We are working very closely with the State and a number of stakeholders who are committed to that whole same process, and there has been a lot of drama, there's been a lot of media focus on the BDCP process as of late. And all I can tell you is, I think from our perspective, and those at the table trying to move forward, that's our game plan. We've got resources to continue the process and move it forward. We're working very closely on identifying exactly what we need to do with respect to the science evaluation of the overall set of actions that will be part of a Bay Delta Conservation Plan, and we are still on target to move forward on the EIS/EIR process and get a draft out in 2011. And that's going to be a major focus of our efforts over the next set of coming months.

And, I think ultimately as the process plays out, the next immediate items that you should look for as I think the State has been very candid, the Administration, of its goal of putting together a transition report with a number of the stakeholders in identifying where we are right now in BDCP and what the path forward is from their perspective. We think that's a good idea as an information and a handoff mechanism to the Brown Administration, and you should look for, also, the Federal agencies will be putting out a complementary product at that point in time to kind of give our assessment of the status of BDCP and our thoughts on the path forward as we move on. So, that'll all play out in the next couple of weeks and those will be -- a lot of focus on that. But, once again -- they are kind of snapshots of where we are and where we think we're going, a lot of action to come.

Finally, I'll just mention -- I touched on this really quickly with respect to the allocation process, but the science-based plans are critical in the short-term and the long-term. And we recognize that we make a lot of decisions that affect a lot of different interests -- both water user interest, environmental interest -- and we do it based on the best available science. And I think one of things that's become very clear to us is the need to constantly improve upon that science. These decisions have a lot of impacts on the ground, and recognizing that, we still have to have a very aggressive near-term and long-term science approach to help provide a little more clarity, a little better basis for those decisions. We've got a near-term science program in place that we hope will influence the implementation in our operations in -- compliant with the biological opinions, in 2011 -- and then we have a more long-term science plan which is several-year studies that we're -- just committed $10 million that will hopefully provide a strong foundation for what we hope will be a -- and we expected to be -- a coordinated biological opinion between NIMPHs and the Fish & Wildlife Service as we move forward with long-term operations. And I think that's something that people have been looking for, and we certainly are intent on moving in that direction.

Colorado River. I can't, kind of, set the stage on Colorado River any better than Pat Mulroy did, I would say. And I would just reiterate some key factors that Pat mentioned -- Lake Mead, hovering around 1082 elevation, 38 percent full, Lake Powell is about 62 percent full. Overall, for the Colorado River system, when you combine the capacity of those two lakes and where we are now, we're still close to 50 percent full in those reservoirs, remarkable given that we are in an 11-year cycle of the lowest water supply period on record. And that's over something like 115 years worth of records that we have. And we're still close to 50 percent. But, as Pat mentioned, things seem to have changed very dramatically from where we were a decade ago, and we now have a 9 percent chance of shortage in the Lower Basin in 2012 and I think that goes up to somewhere around a 25 percent chance of shortage the following year.

So, they are probabilities, they are based on projections, but given how dramatically things have changed over the last decade, we have to pay attention. And only by paying attention and reacting to that can we be responsible water managers.

The good news with respect to the Colorado River Basin and -- Pat kind of left -- the one issue I would take with her talk was she kind of said, "We need to set aside our petty differences and move forward." I agree with that 100 percent, but that's already been going on in this Basin, it's been going on for the last 10 to 15 years, and it's why this basin is, really, in my mind -- notwithstanding the challenges -- it's a model for how we're going to need to move forward. I always -- when I talk about Colorado River, start with Mark Risner's book, "Cadillac Desert," where he said, "It's the most litigated river basin in the world." And I'm sure -- I have no doubt that that was true. But something's changed over the last decade and that doesn't make the issues easy. In fact, I've spent a lot of time with a lot of the Seven Basin State representatives, and none of the issues are easy.

But the willingness to be creative, to set aside those differences has resulted in a lot of successes over the last 15 years. Groundwater banking, interstate marketing in the Lower Basin; coordinated operations and shortage guidelines in 2007; the YDP trial run that we initiated this year in dealing with a lot of the issues -- especially with that. The drop to the Brock Reservoir, funded by the municipal entities in Nevada, California and Arizona, and our ability to bring that in on-time, and under budget. The MSCP, which was so critical to address the SA issues, and the significant conservation measures that exist in the basin -- those are just some examples of a whole set of collective, very far-sighted policies put in place based on tough negotiations.

We want to build on that. We've had some success in this Administration with Indian water rights settlements -- two major ones in the Colorado River Basin that increases the certainty and sustainability that we're looking for with respect to water use. And as Pat mentioned, we're completely focused on our relationship with Mexico; we have had some great success in having a very good dialogue in having some agreements in place with respect to YDP, that was minute 316 to the U.S.- Mexico Treaty, and establishing a coordinated framework to deal with some long-term issues in the Colorado River Basin. And we're working on another agreement at this point in time which has taken a lot of time and effort but we -- hopefully this is going to be -- continuing to build toward a set of actions with Mexico that will really benefit both countries for the long term.

Bottom line, I could talk about climate at the River Basin, I could talk about some of our general programs, but I want to leave time for Andy and I want to leave time for a Q&A. Suffice it is to say that there's a lot going on in the Basin. Things aren't going to get any easier from a resource perspective, but I do think, overall, there is a firm understanding about the economic interests at stake, the overall need to resolve water issues as a foundation for some stability -- both economic and social stability -- in the West and across the country, and hopefully we will continue to get the strong support this Administration -- even in a tight budget this year, Reclamation did fairly well, we were one of the few agencies to get a slight bump up in 2011 -- and so I just think that's in recognition of the importance of water resource issues, and I expect that that will continue, over time.