Colorado/IID Negotiations Framed by Richard Katz – Governor's Senior Advisor

What is Governor Davis' current position regarding the ongoing Colorado/IID/San Diego water negotiations?

The successful completion of the negotiations is of immense importance not just to Southern California, but the state as a whole. The so-called soft landing where we get the next 14 years, to wean ourselves off the extra water we've been taking from the Colorado, is an important transition period as we look for alternatives. California has, for many years, used 900,000 more acre-feet a year from the Colorado then we have a legal right to. And, that's water that is being used today and not planned for future growth. It's for the people, the business and the recreation that's here today. The surrounding states want their water, they're growing and they need it. We have one of two ways to get down to the 4.4 million acre-feet that we're entitled to. We either lose the extra water immediately or we phase it out over 14 years. Our preferred approach is to phase it out over 14 years.

Obviously, there's pressure on the Governor's Office from other states to have California reduce its reliance on Colorado River water. And likewise, there are competing demands from the users of the Colorado River in Southern California to protect existing supplies of water. How is equilibrium to be found between these water contestants?

It's got to be a situation where everyone agrees that protracted legal fighting is not good for the region and a solution is good for everyone. You've got four parities at the table that are used to getting their own way. And, historically, there has been enough for them to get their own way. But, times have changed.

Can you elaborate on who the four parties in interest are and their negotiating positions?

The four parties are the San Diego County Water Authority, the Imperial Irrigation District, Metropolitan Water District and the Coachella Valley Water District. Some of the parties are unhappy about the deal they signed in the 1920s that parceled out the Colorado River. There's been a constant battle back and forth over who pays how much for water, who has a right to it and who loses in a drought.

San Diego is both literally and figuratively at the end of the pipe. They have no indigenous water, they have no ground water and they don't have rivers running into San Diego. They have no water supply. San Diego is completely dependent on the Metropolitan delivery system and, at the same time, they are at the end of the pipe. From their perspective, they are very, very vulnerable. And that's why they have constantly worked to try and get a more independent supply.

Imperial is an agricultural community and a poor community. Imperial also uses the greatest amount of water. Their major resource always has been agriculture-it's now becoming water. As the times are changing, Imperial wants to be a cooperative party to the changes in the state‹that means trading water to some urban partners that need it.

Coachella is caught in the middle. They feel that they got shortchanged in the original agreement. They constantly and vigorously have to defend their water rights and want to be assured of a stable and reliable supply.

The 800-pound gorilla in this negotiation is the Metropolitan Water District, which is the water purveyor for some 18 million people in Southern California. San Diego is a part of Met. Met wants to make sure that all of its member agencies' needs are addressed. And, to some extent, a more independent supply for San Diego, or other agencies, is a threat because it takes some of the revenue out of their system. But, all four parties have been working to try and achieve a fair compromise.

A San Diego Union editorial recently asserted that: "MWD President Ron Gastelum may argue that the deal somehow resembles energy deregulation, or that its environmental impacts are too costly, or that its an improper use of state water bonds. But, the real reason Gastelum doesn't want San Diego County buying Imperial Valley water may be that he thinks the Los Angeles-based MWD can get that water and a lot more for free." Is that simply hyperbole? What's your assessment of MWD's current objective vis a vis the Colorado/IID negotiations?

I'd say there's some hyperbole and there's some truth to it. San Diego has always felt that they've been at the bottom end of the pecking order. There is some belief that Met, through the federal government, is pursuing waste and unreasonable use charges against Imperial Irrigation District in order to get the water for virtually pennies on the dollar. So, that is a factor. Met also is concerned that there is not as much surplus water on the Colorado as people originally thought there might be. That's something that we really don't know the answer to at this point.

What's the state's interest? The press have reported tension between US Interior Secretary Gale Norton and Governor Davis. And, there's been some friction between MWD and the Governor's Office. Put those relationships in perspective and elaborate on the state's position.

It's the tension you get whenever you have difficult negotiations. Everyone is looking for solutions and the tension within California stems from everyone having to recognize that today is different than yesterday and tomorrow will be different again. The old formula, the old way of doing business, particularly in the water world, will not get us through the 21st century.

The federal tension is a little different. The feds have been very strong on rhetoric and very slow to deliver on behalf of California. California, as a state, has invested close to $2 billion in the CALFED process. The feds have been very, very slow to step up despite monumental efforts by Diane Feinstein and Barbara Boxer and George Miller and other members of Congress. The feds have been very slow to come up with dollars. In fact, we have virtually no federal money in what's supposed to be a joint federal project-that's why it's called CALFED. So there's a tension there because you get a lot of rhetoric.

Secretary Norton was in Sacramento recently for her 2025 Visioning Conference on water and yet failed to invite a single representative of the state government to something that was being held in Sacramento.

As a former assemblyman from the Los Angeles area, you are no doubt aware that there is little present discussion at the civic level about water policy, perhaps because there is a sense L.A. presently has enough supply. What going forward ought to be on the City and region's policy agenda regarding water?

The discussion needs to recognize that, first of all, water is finite. Second, L.A. needs to be a player in the negotiations. L.A. needs to be more involved in solving statewide and regional water problems because it will affect our economy as well. One thing L.A. has done very well and with little credit is conserve water. L.A. essentially is using the same amount of water today that it did some 20 years ago, and it's doing it through conservation. That's remarkable.

Richard, what then, over the next two to three months, can we expect in the way of a resolution of the Colorado River allocation dispute?

Frankly, I'm hoping in the next two or three weeks, we'll see a settlement on the Colorado. Failure to do so will result in prolonged litigation and a contentious atmosphere that will have impacts for both residents and businesses and the environment.

One of the most contentious issues in this debate over water is going to be the question of who determines beneficial use, state law or federal law? That's one of the main issues in the recent court actions and tensions between the Department of Interior and IID.

Beneficial use refers to water being used efficiently. It's important for this negotiation because the Bush Administration does not recognize the environment as a beneficial use. So, if the water in California that comes through the Colorado River is used to benefit the Salton Sea and maintain the Salton Sea, the federal government would say that's not a beneficial use, just a waste of water. Under California law, that would be an appropriate use of that water. This has implications not just in water, but for the environment up and down the state of California.

Metropolitan Water District weighed in on the side of the federal government saying that federal beneficial use law should prevail in California. The state of California vigorously opposes that view and believes that we should be able to determine for ourselves what beneficial use is in California.

Why did MWD take the position with Secretary Norton that it did?

To be honest with you, I don't know why they took the position they did. I believe they took it in some part because they're doing lots of business with the Department of Interior. According to some emails that we saw at the end of last year, they think that the fed's more relaxed environmental standards, as opposed to the more stringent state environmental standards, ought to be applied to the Salton Sea.

And what does this debate over beneficial use mean for a Los Angeles resident?

It's very similar to having the feds decide what is clean air in California or having Californians decide what is clean air in California. The Bush Administration has a much weaker environmental policy than does the Davis Administration. The Bush Administration, for instance, believes in offshore drilling. Californians' clearly don't. To lose this battle to the feds over determining beneficial use and whose rules will govern will translate into a lessening of environmental protections throughout California.

Years ago, you were very involved in legislatively approving water transfers as a means of efficiently moving water from where it was plentiful to where it was needed in California. Private water trades have not, however, turned out to be politically viable nor a significant method for moving water in California. Why is that?

You're right, it's not nearly as expansive as I hoped it would be. Part of it is the subjective nature of the decision making process. With all of the public agencies involved, there are no clear guidelines and no clear rules. What gets approved one day can be disapproved the next day. A lot of the uncertainty still remains to be taken out of the process before water trading becomes a more important part of out water portfolio. Everybody thinks, much like with transportation, there's one answer for the whole problem. Both in transportation and in water, that simply is not true. In some places, desalination will work. In other places, recycled water will work. Conservation always will work. In some places, conjunctive use with below ground storage will work. We need all of the tools to use our water efficiently. And, for water trading to be a part of that solution, there needs to be more certitude in the process.

Lets conclude with your assessment of desalination as a water supply opportunity. There's growing interest, perhaps because of the availability of federal funding for research, in desalinization. But while the cost of such water has come down, it is still almost $900 per acre-foot. Your thoughts.

Desalination is not the total answer or the only answer, but it is an answer that will be part of the process. And we are funding through the Water Board and some other vehicles several desalination projects right now that we hope to have up and running in the not too distant future. Desalination is coming down in cost. Not too long ago it was $2,000 per acre-foot. It now runs in the range of $700-800 per acre-foot and, as it reaches $400-500 per acre-foot, it will start competing with other water sources and become competitive.