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NWRA Keynote

Remarks Delivered By:
Estevan López, Commissioner

National Water Resources Association 84th Annual Conference
Denver, Colorado

November 13, 2015

Good morning, everyone.

It's my pleasure to be here with you today. Part of his introduction Tom said I have a degree in chemistry. He's correct. I also have a degree in petroleum engineering. I think perhaps, I guess nobody gives degrees in an alchemy, but I think that would have been a good one to have gotten. It would be great to be able to make water.

It's great to be here at this conference. This is my second time at this conference. The first time I think I described it our 15-minute meetings with all of you as speed dating.

I, again, did some of those 15-minute meetings. Not some, I did a bunch of them. I counted them this morning. I think it was 44 15-minute meetings. I guess I could still describe them as speed dating, but it is a bit different. This time it was a bit different.

First off, I had at least heard of almost all of the issues that were brought up and had been briefed on almost all of them. I have a sense of that they meant. Secondly, I had an opportunity since last year's conference and otherwise to meet many of you. Perhaps I didn't remember the names. Some of you I remembered the faces.

I'm getting to know all of you. I really appreciate it. I really appreciate the partnership that Reclamation has with NWRA. I had a chance yesterday to talk with Bob Johnson, another former commissioner. He put these 15-minute meetings in perspective for me. It was good to have that conversation before finishing them up because I really started focusing on that way.

He talked about how it gives us a really unique opportunity to hear of the issues that we're dealing with from the stakeholder perspective. Because we hear about these all the time from our staff and from the perspective that our staff puts on it.

That's usually important. They were very close, but as well as they try to do it, they can't really communicate, perhaps, some of the importance of these issues the way you can, so I think it's incredibly important that we do this.

The other thing that I've really begun to appreciate, even though they're very short 15-minute meetings, is that -- somebody on my staff probably does this at night, I don't realize it -- they're often clumped together with various stakeholder groups from the same general geographic area coming in one right after another.

I get to see something about the different perspectives of all the people that are being affected by some of the same issues. I think that's important as well.

Overall I get a sense of how our regional staffs, our area offices that are working with you. I'm glad to see and say that it appears that, by and large, our area offices and our regional offices have their finger on the pulse of what you are dealing with.

I really appreciate any of you complimenting their work. There's times when perhaps we needed a little nudge on something, that's all right, too. But we really do appreciate just the ability to interact with you in this way.

Since last year, when I spoke at this conference at del Coronado in San Diego, I've been here for just a bit over a year. That means a couple things.

Number one, I'm done with my recusals. Last year, I talked about how I couldn't deal with a lot of the issues that I'd dealt with while in New Mexico, but there's a couple that are still out there. Anything that has to do with New Mexico's litigation with Texas, I'm recused from enacting on those for the duration of my stay here.

Unfortunately, that means I can't interact too much with my friends from Elephant Butte Irrigation District. I have to just tell them hi as I come in and out of the hotel, but I know that they're being dealt with by some other staff. That's really the only recusals that I have left.

The other thing that's happened is I served for the first three months, thereabouts, as the principal deputy commissioner, because I hadn't been confirmed. But I did get confirmed in December, so I was happy to have that happen.

I've really come to appreciate our staff. I think we've got just amazing, amazing staff, just great experience. I've really come to appreciate our partners, all of you.

You guys are amazing, in terms of you have a wealth of knowledge that you bring to this. You have a commitment to what you do. I think it's something that all of you realize inherently, but let me just say it. I've come to realize the huge importance of what Reclamation does, and what you, our partners, do with us.

It was interesting to listen yesterday to a former senator in Colorado, and his emphasis on just how important what we do is. As I've been flying around the West, I've looked down over the countryside. I see irrigated landscapes, and I see emerging cities, and much of that is possible because of the work that we collectively do.

That's the West, but the West is a huge piece of the nation's economy. What we do I think is really, really important, and I appreciate the partnerships that I have, that we have, with all of you.

Today, I'd like to talk to you just briefly about a few topics. One, aging infrastructure. Two, I want to talk a little bit about our hydropower and renewable energy work.

I want to talk to you about our budget and funding, how we see that playing out this year. Then I'm going to talk a little bit about what we've been facing this year in terms of drought throughout the West. Let me begin with aging infrastructure.

As all of you know, and I've been reminded over and over and over in these short meetings that we've had, a lot of our water and hydropower infrastructure is getting pretty old. Much of our reserved in transfer works are approaching a hundred years old.

Most of it is at least 50 years old. Some of it is approaching 100 years old, and some of it is older than 100 years old. Yet it continues to provide reliable performance, and it does because we collectively, you and us, have done effective preventive maintenance.

We've invested strategically in major rehabilitation in the place where activity is needed. These investments, these activities, all the work that we do, is intended to deal with just the general aging of our facilities, the new updated hydrologic information or seismic information that affects the way those facilities are going to operate, or can be operated.

New design standards, and just anything else that's going to be required to keep all of these facilities safe and functioning effectively, operating the way they were intended to operate. Not only the way they were originally intended to operate, but we keep putting new demands on all of this infrastructure, and managing for a broader range of needs than I think will be originally contemplated.

There's a lot of work that still is going to continue to be done. This infrastructure's getting older and older, and the money is tighter and tighter. Certainly, there's not a lot of money coming from the federal government, so we recognize that as we think about this future, we're going to be looking to you to pick up bigger portions of the cost in many instances, because we don't have a better alternative, either initially or ultimately.

We have put together an infrastructure investment strategy, and it's intended to improve the characterization and reporting of anticipated major rehabilitation and replacement activities for Reclamation facilities.

That information is going to be used to manage and prioritize extraordinary maintenance and dam safety modification, and to track deferred maintenance, and to identify additional tools and authorities required to address both the funding and affordability aspects of the infrastructure needs.

We're going to continue to work with our local and regional power and water partners to develop strategies to meet those investment needs. To that end, beginning last August 20th, we made a presentation here in Denver of the strategy at a stakeholder meeting to begin getting some external input into that strategy, and we've continued since then.

We've met with the Tri-State Group in Boise, Idaho. We met with the Imperial Dam Advisory Board in Yuma, Arizona, and we're going to be meeting in January with the Four States Irrigation Council in Fort Collins, Colorado.

If you're able to participate in those sessions, that's great. If you're not, I really encourage all of you to give your input about this strategy to our area and regional offices, the people that you work with all the time. Make sure that they bring up your concerns, that they bring us your input into this strategy. You will make it better together.

By the way, over the course of the 44 meetings that I held over the last couple of days, I heard from quite a few of you about your interest and the perspectives about this investment strategy, and also about our directives and standards relative to excess capacity and so forth. There, again, your input is welcome. Make sure that we hear what your perspectives are.

Next, let me talk a little bit about hydropower and renewable energy. As I think most of you know, Reclamation is the second largest producer of renewable hydropower in the US. We own 53 power plants that annually produce enough electricity to serve 3.5 million homes.

In March of 2010, the Department of Interior, the Department of Energy, and the Department of Army signed an MOU for sustainable hydropower. The purpose of that MOU was to help meet the nation's needs for reliable, affordable, and environmentally sustainable hydropower by building a long term working relationship, prioritizing similar goals, and aligning ongoing and future renewable energy development efforts.

That MOU is implemented by the Army through the Corps of Engineers, by the Department of Energy through the Office of Energy Efficiency and Renewable Energy, and for the Department of Interior through Reclamation.

Over the last five years, through the collaboration and partnerships with those federal agencies, the hydropower industry and research community, and stakeholders like yourselves, the agency has successfully fulfilled the commitments and promise of that MOU. In March of this year, the three agencies extended that agreement for an additional five years.

This agreement renews the agency's commitment with a second phase of collaboration, and that second phase action plan includes technology development, asset management, hydropower sustainability, quantifying the hydropower capabilities and value in power systems, information sharing, coordination, and strategic planning.

The 2010 MOU, a two-year progress report on that MOU, the signed extension on the phase two action plan are all on Reclamation's power website. If you're interested in any of those, I encourage you to take a look at those.

Let me just mention that Reclamation has been generating clean, renewable hydropower for decades. Now there's a real emphasis on that as a result of concerns over greenhouse gases and everything else.

That hydropower that's been there for decades is basically in the baseline accounting of what we're doing, where in terms of additional renewable energy sources, this is generally not counted. It's only when we add to what we're already doing that we get credit for it that regard. Important piece of what we do.

Let me talk to you a little bit then about our budget and how I see things playing out this year. We're currently operating under a continuing resolution that's set to expire on December 11th, just like the rest of the federal government.

As I'm sure all of you heard, the president signed a bipartisan budget agreement this last Monday. I think that agreement has raised the debt ceiling, presumably through about 2017, and it's increased the budget caps by about eighty million dollars over the next two fiscal years.

That's led to some optimism that perhaps Congress can complete work on the 12 fiscal year '16 appropriation bills for the president's signature before the December 11th deadline. We expect that the individual bills will be packaged into an omnibus.

Although, as always, there's a chance that things could get bogged down, perhaps as a result of legislative policy writers that are being considered. In which case, Congress might again opt for a continuing resolution. I would expect that if they did that, that it would be a full-year continuing resolution.

The current fiscal year '16 House and Senate energy and water development appropriations bills are generally pretty supportive of the president's budget with West, including infrastructure needs and water supplies, operational requirements for endangered species, and our WaterSMART program. There's a few things that are still in flux and of concern, and that would be of interest to members in this room.

One, the Senate has chosen to hold the Senate bill, would hold the Indian water rights settlement to fiscal year '15 levels of about $90 million. That's about $22.5 million less than we think we need to keep on schedule to implement the timelines of those settlements. The House, on the other hand, they supported the president's budget request in that regard, so they'll have to work that all out.

With regard to certain environmental commitments for the San Joaquin River Restoration Program in California, the House deleted the entire amount that was requested for that. It was $35 million. That is important because it will implement the settlement that resolved 18 years of litigation in California. The Senate did, however, include that funding in their bill, so that will also had to be resolved.

There's a couple of provisions that were cleared in the president's budget, that were not included in the House bill. One has to do with increasing the appropriations ceiling for the Secure Water Act by $100 million. This authority is critical to continuing WaterSMART grants and a few other programs that are associated with that.

Second, our proposal to extend the California Bay Delta authorization through fiscal year '18 was not included in the House bill. The Senate did, however, include both of those in their bill. Again, that's going to have to be worked out in conference.

Finally, both the House and the Senate have once again, like last couple of years, added monies to certain categories within our budget. The House included $31 million, most of which -- about $29 million of that -- going to be used to rural water construction in currently authorized projects.

The Senate would add $43 million to our budget in five categories, but the largest by far is also rural water, that would receive about $30 million of that.

Even with that additional amount for rural water, that's still a drop in the bucket in terms of the demand that's out there for completing the rural water projects. I've got to tell you, many of you represent some of those projects, people that are really concerned about the pace that those projects are being built, but we'll continue to work with you.

We're hopeful that the budget agreement has cleared the way for a final bill for the fiscal year 2016. This will allow for continued Congressional support for Reclamation's mission, and a path forward for the president to send Congress a good bill for 2017.

Now, let me just talk a little bit about what we've been facing this last year in terms of drought throughout the West. Obviously, the bull's eye has been on California. For the second year in a row, it's been incredibly dry up there.

Depending on how you measure it, I'm sure you read this. California has been in...People describe it differently. Some people say four years of drought. Others will say, "Well, it's eight years of drought with one good year in the middle."

Regardless, others, looking at tree ring data and other information, would say, "This is the worst drought in 500 years." By another measure, it's the worst drought in 1,200 years. Regardless, any way you cut it, it's incredibly dry out in California, and the demands have never been greater out in California, so it has been incredibly challenging to meet water supply demands out there. In that vein, back in January of '14, Governor Jerry Brown declared a drought state of emergency. That was following three years of drought, and our Central Valley Project here in California has been experiencing the driest period on record. The president, the Secretary of Interior, and several Congressmen have toured the drought-stricken areas, and they proposed a broad array of federal actions to try and address those drought impacts. As of late September, overall, Central Valley Project storage was less than 50 percent of normal. Allocations to the Central Valley Project Agricultural Service, contractors south of the delta, were zero for the second year in a row, zero percent allocation. Senior water rights holders received an allocation of 75 percent. That was on paper. They actually received something less than that, probably close to 60 percent. Throughout this, Reclamation has been working really closely with the California Department of Water Resources, the Fish and Wildlife Service, the National Marine Fishery Service, and the state Water Resources Control Board, and with stakeholders, the public, and Congress, to figure out how to best manage that very limited water supply. I include, I talk about the Fish and Wildlife Service and the National Marine Fishery Service and so forth, because -- and the state Water Board -- so many of the constraints on how much water can be pumped are environmental constraints, whether they be about fish or water quality issues, generally. That's taken a huge amount of coordination to try to squeeze out additional supply, and get some flexibilities in what otherwise are extremely difficult environmental regulations. We've taken a number of actions to increase that flexibility. We've been working with our stakeholders in California to facilitate transfers and exchanges of water, and to make sure that as we do that, we don't impact senior water rights holders or the operations of the CVP overall. We have developed a drought contingency plan together with the state Water Resources, and submitted it to the state Water Resources Control Board back in January of '15. It's provided a road map for how we did operate this year. We've worked with the state Water Resources Control Board to get temporary changes to their water quality flow requirements. We've kept in almost continuous contact with our contractors so that they know why we're making the decisions we're making, and what those decisions mean for them, and we've kept in almost continuous contact with Congress. They obviously are very concerned about the water supply, and they have their constituents certainly bending their ear about, "Can't you do something?" Well, that's why I said perhaps alchemy would have been a better resource. It'd be great if we could make water. We can't, but we can try and manage what we have, and that's what we've been doing. Last year, we got $50 million of additional monies for drought response. Of that amount, almost $20 million went to projects in California with CVP. That was used for water transfers, temporary barriers, wheeling water, and to acquire conveying water refuges into diversify refuge supplies. Additionally, the Department of Interior added another $8.8 million to CVP to support operations and maintenance, fish passage and fish screens, and for agricultural water use efficiencies. Reclamation staff at regional and area levels continue to meet with our stakeholders, and to hear and understand their concerns with regard to...We continue to review the laws and policies and guidelines to squeeze out whatever additional flexibility we can in this tough time. Currently, we're working on developing a 2016 operations plan that will consider the possibility of a continuing drought. We still don't know. Recently, we've been hearing a lot about El Niño, how there's almost a record strength El Niño, so a lot of people are saying, "Ah, finally. Relief is on its way." Unfortunately, we can't say that relief is on its way in California. If you look back at big El Niño seasons in California...I heard this from our deputy secretary recently. He compiled some data about the last nine strong El Niños. Of those, three produced above average precipitation. Three produced way below average precipitation, and three were right about average, so that says it's anybody's guess. Nevertheless, I guess what I'm saying is we can't expect that the El Niño is going to get us out of this thing. We've got to prepare for continuing drought, if that's what comes at us. We already have begun to hold drought contingency meetings, again, with our other resource management agencies, the Fish and Wildlife Service, NMFS, the California Department of Water Resources, and the California Department of Fish and Wildlife, the state Water Resources Control Board. We're working with local districts on projects for groundwater banking, groundwater recharge, water conservation, water recycling, and drought resilience, to improve water use efficiency and resilience overall. Through the San Joaquin River Restoration Program, we're helping the Friant division contractors design and construct groundwater recharge and banking facilities. We're providing something like $14 million in cost share for projects totaling over $30 million. They're at various stages of development, and we've given a number of WaterSMART grants over the years for water conservation, drought resilience and contingency planning. Since 2012 through 2015, those have funded the 11 separate projects in California, totaling something like $8.7 million in federal funding. Looking forward, in January of '16, Reclamation will announce a preliminary assessment of CVP supply. In February, we'll announce the initial allocation to be made available under the contracts. I've talked a lot about California because that's kind of the ground zero for the drought right now. But even in Washington, nobody thinks of Washington as being drought-prone, but they are, and the Yakima Basin may have suffered in drought. Oregon has suffered through drought. Throughout the entire West, you've seen how there's been huge forest fires as a result of some of the drought that's ongoing. Moving to review the situation in New Mexico, in New Mexico, the Rio Grande and the Pecos have fared quite a bit better than they had in recent years. I've been talking to my friends from Pecos River Basin, and it seems like, I would say they're pretty much completely out of their drought. Their reservoirs are full. They've been getting a lot of rain. In the Rio Grande, when they got good rain over the summer, that really helped them out. Yet, the reservoirs are not even close to full. El Vado Reservoir is the closest to full, and it's still less than half of capacity. In the Great Basin, Wyoming, in 2015, they had well below average runoffs through the spring, but they got good rainfall over the summer. Less than half of the major reservoirs within the Great Basin filled in 2015. On the Colorado River, just like California, Colorado River is currently experiencing the worst drought in over 1,200 years by some measures. 2015 marks the 16th year of continuous drought, and the worst drought in the 100-year record. Lake levels in Lake Mead, are the lowest since Mead began filling in the 1930s. Yet, the Colorado River contractors, in the Lower Basin, have yet to experience a shortage. That's the value of having two huge reservoirs. The reservoirs, right now, are being operated. Under some interim operational guidelines that were adopted in 2007. Those guidelines, and the huge shortage criteria, and allow for coordinated operation into two large reservoirs. Additional efforts to address drought, there's $11 million that's been made available for system conservation pilot projects, for voluntary efforts that would demonstrate ways of keeping water in the reservoirs and extending our supply. Both the Upper Basin and the Lower Basin are making use of that water and have submitted a lot of projects for consideration that work is going well. Those were really demonstration projects. The Upper Colorado River Basin states are pursuing drought contingency plan that has three major components. First, extending operation of Colorado River Storage Project above Lake Powell to move water to Lake Powell in low periods. Second, implementing voluntary command management programs, utilizing a broad range of projects, from agricultural, municipal, and industrial centers, that would reduce depletion of Colorado River water. Third, augmentation through weather modification. In the Lower Basin, we're also pursuing contingency projects and a drought response plan. The Lower Basin signed a drought response MOU, aimed at trying to add between one and a half and three million acre feet of water to Lake Mead by the end of 2019. Frankly, to date, that has not been very successful, but we continue to work on it. Additionally, Reclamation is continuing to work with stakeholders to identify longer term options for the Colorado River. That gives you an impression of much of the western drought. Texas, East Texas, have been in drought. Recently, all we've heard about is flooding in East Texas. All of this is, perhaps, showing us a taste of what we've got to prepare for the future. If climate change forecasts are correct, we're told we're going to experience larger, or tougher, and drier, and more frequent droughts, and perhaps, also more periods of intense flooding, that sort of thing, so all the more reason that our infrastructure and investment strategy has to be robust. We're going to have to be this infrastructure working through all conditions. We continue to work with making money available through WaterSMART grants to improve efficiencies. I encourage all of you to utilize those. It's not huge infrastructure plans, but it is making a big difference. We've been tracking the conserved water from WaterSMART grants, Title XVI projects over the course of the last seven years. In that timeframe, we've tracked something on the order of this, not to the exact order but pretty close to a million acre feet of conservation savings as a result of that. We're also implementing a drought response plan. We are funding 12 drought resiliency projects, receiving $3.4 million. We're helping 11 entities create drought contingency plans to the tune of $1.8 million. All of these are efforts to support the National Drought Resiliency Partnership. Reclamation additionally continues to work and work on emergency response actions under the drought response plan, but we're really trying to focus our drought efforts in terms of really creating resiliency. Drought is not a one-time issue. When we are going to spend money on dealing with an issue let's have it be a solution that provides ongoing benefits. In closing, I again just want to thank all of you for the input that you've given over the course of these speed dating sessions if I call it that again. I know that you're following closely what Congress is doing. Congress is certainly interested in trying to enact some drought legislation for California, but perhaps it will have elements that will affect some of the rest of West. We're following these things very closely as well. Deputy Secretary Connor testified on several bills earlier this year. By and large, there's a lot of good ideas in some of these bills. But there's also a lot of things that would try and dictate the way we operate. I don't think that's going to be really helpful. While I think Congress has the best of intentions in terms of telling us how to do things, it really reduces our flexibility, reduces our ability to respond to the actions as they happen if they are too prescriptive in what they ask us to do. There's a number of initiatives overall. There's a lot of interest in additional storage projects, particularly in California. There's a lot of study that's going on. There's some new ideas for amendments to the Dam Safety Program allowing for additional benefits if we're doing the Dam Safety project. Keep your eyes on these bills. Stay engaged. Stay engaged with us. Again, I'll end with thanking you. Really, appreciate this opportunity to be here. Thank you.