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Finding the Water NEW WATER SUPPLY OPPORTUNITIES TO REVIVE THE SAN FRANCISCO BAY-DELTA ECOSYSTEM

Finding the Water - Environmental Defense Fund · 2013. 8. 12. · Cover image: Thomas B. Dunklin (salmon), California Department of Water Resources (river) Our mission Environmental

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Page 1: Finding the Water - Environmental Defense Fund · 2013. 8. 12. · Cover image: Thomas B. Dunklin (salmon), California Department of Water Resources (river) Our mission Environmental

Finding the Water

NEW WATER SUPPLY OPPORTUNITIES TO REVIVETHE SAN FRANCISCO BAY-DELTA ECOSYSTEM

Page 2: Finding the Water - Environmental Defense Fund · 2013. 8. 12. · Cover image: Thomas B. Dunklin (salmon), California Department of Water Resources (river) Our mission Environmental
Page 3: Finding the Water - Environmental Defense Fund · 2013. 8. 12. · Cover image: Thomas B. Dunklin (salmon), California Department of Water Resources (river) Our mission Environmental

Finding the Water

NEW WATER SUPPLY OPPORTUNITIES TO REVIVETHE SAN FRANCISCO BAY-DELTA ECOSYSTEM

AUTHORS

Spreck Rosekrans

Ann H. Hayden

CONTRIBUTORS

James B. Fordyce

Thomas J. Graff

Nancy E. Ryan

Page 4: Finding the Water - Environmental Defense Fund · 2013. 8. 12. · Cover image: Thomas B. Dunklin (salmon), California Department of Water Resources (river) Our mission Environmental

Cover image: Thomas B. Dunklin (salmon), California Department of Water Resources(river)

Our missionEnvironmental Defense is dedicated to protecting the environmental rights of allpeople, including the right to clean air, clean water, healthy food and flourishingecosystems. Guided by science, we work to create practical solutions that win lastingpolitical, economic and social support because they are nonpartisan, cost-effectiveand fair.

©2005 Environmental Defense

100% recycled (100% post-consumer) totally chlorine free paper

The complete report is available online at www.environmentaldefense.org.

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Executive summary iv

Chapter 1: Introduction 1Historical impacts on the estuary 2A declining resource 3

Chapter 2: Overview of environmental water requirements 5CALFED and the EWA 5CVPIA and the Anadromous Fish Restoration Program 7The Bay-Delta Accord and the WQCP 8

Chapter 3: Where are we today? Five years of CVPIA and 10EWA implementationDiminished CVPIA fisheries commitments 10Diminished EWA 12

Chapter 4: Future funding prospects are highly uncertain 16

Chapter 5: Opportunities for greater environmental protection 17

Chapter 6: Conclusion 20

Notes 21

Contents

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The San Francisco Bay-Delta is in crisis.Fish populations have dropped to recordlows in the West Coast’s largest estuary,which is a source of drinking water for22 million California residents andsupplies irrigation water for much of thestate’s agriculture industry. Now, newthreats are on the horizon as the state ofCalifornia plans to increase the capacityof its export pumps to divert even greatervolumes of fresh water out of the Delta.At the same time, environmental watertargets set forth in the CALFED Plan(specifically those of the EnvironmentalWater Account [EWA] and the Cen-tral Valley Project Improvement Act[CVPIA]), intended to protect and restorethe estuary and lessen the impacts of

Executive summary

water project operations, have not beenmet for the last three years and face anuncertain future. If the Bay-Delta is tobe restored, it is imperative that manag-ing agencies follow through on theircommitments to provide environmentalwater. Meeting the environmental waterobjectives set forth in the CALFEDPlan is an essential element in restoringnot only the estuary but also in renew-ing public confidence in our water man-agement agencies.

In this study, Environmental Defenseconcludes, based on analysis of wateroperations data, that in the past fewyears the environment has been under-endowed by approximately 420,000–460,000 acre-feet annually (Figure ES-1)

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FIGURE ES-1Unmet environmental water targets, 2000–2005

Since 2002, the EWA and CVPIA have been under endowed on average by 436,000 acre-feet. The EWA,which began in 2001, has seldom had adequate assets (i.e., water) available largely due to limitedfunding. CVPIA supplies began diminishing after the Interior Department’s 2003 Decision (already inplace in 2002), which offered far less protection than the previous policy. Current trends indicate thatneither the EWA nor CVPIA water supplies are likely to be available in 2005 and beyond, as intended inthe CALFED Plan, unless significant changes are made.

Source: California Department of Water Resources, U.S. Bureau of Reclamation

� Target CVPIA (B2) � Target EWA purchases � Target EWA operational assets� Actual CVPIA (B2) � Actual EWA purchases � Actual EWA operational assets

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The shortfalls in water dedicated toenvironmental protection are largelydue to diminished state and federalfunding, unavailable operational assetsthrough the EWA and revised account-ing rules for environmental water underthe CVPIA. As a result, fishery agencieshave been significantly constrained intheir ability to dedicate water at keytimes of the year to protecting fish-eries—particularly endangered species—as promised in the CALFED Plan.

Fortunately, as actions are taken tomodify and modernize water manage-ment in California, there will be oppor-tunities for obtaining the water necessaryto provide environmental protection.In this report, Environmental Defenseidentifies key opportunities to acquirewater to finally realize the protective

assurances promised in the CALFEDPlan. These opportunities include:

• Increasing the usable storage in SanLuis Reservoir

• Dedicating increased export capacity

• Integrating state and federal waterprojects

• Restoring the CVPIA’s commitmentsto fisheries protection and restoration

• Implementing CALFED’s Environ-mental Water Program (EWP) andSection B3 of the CVPIA

• Retiring drainage-impaired land in theSan Joaquin Valley

• Implementing user fees

To ensure sustainable and reliable sup-plies, the water acquired through theseopportunities could be required as partof the regulatory standards to which thewater projects must adhere. As such,these regulatory standards could helpprotect fisheries by allowing pumpingonly when it is safe for fish, similar toboth EWA and CVPIA protections.

With some creativity and foresight,it is possible to address the problems inthe Bay-Delta. The health of the estuarylargely depends on a reliable set of envi-ronmental safeguards, including dedi-cated water supplies. In order to ensurethe availability of sustainable watersupplies, a plan must be developed thatidentifies long-term supplies, providesassurances that water will be suppliedand includes consequences for non-compliance. In light of the dire condi-tion of the Bay-Delta and the loomingthreat of increased freshwater diversions,government agencies, water contractorsand the interested public need imme-diately to develop a viable plan toassure adequate fresh water suppliesfor the long-term health of the SanFrancisco Bay-Delta.

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The San Francisco Bay-Delta is the hub of California’s water supply system. Inrecent years, the health of this important estuary has significantly declined andpopulations of key fish species have dropped to record lows. Now additionalthreats are on the horizon as the State of California plans to increase thecapacity of Delta freshwater exports.

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State projectsFederal projects

20 miles

20 miles

Sacramento

SanFrancisco

E N L A R G E D A R E A

Los Angeles

San Diego

SanFrancisco

Sacramento

Stockton

Harvey O. Banks Pumping Plant

Tracy Pumping Plant

Friant ReservoirSan Luis Reservoir

Friant Kern Canal

San LuisDrain

California Aqueduct

Delta MendotaCanal

Sacramento R

iver

San Joaquin River

San Joaquin Rive

r

FIGURE 1The San Francisco Bay-Delta: the hub of California’s water system

The San Francisco Bay-Delta is one of California’s most valuable and unique ecological resources. The Bay-Delta also suppliesdrinking water for 22 million California residents and irrigation water for much of the state’s agricultural industry via the state andfederal pumping facilities, Harvey O. Banks and Tracy, respectively.

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The San Francisco Bay-Delta Estuaryhas been the hub of California’s watersupply system since the state’s early dayswhen farmers first diverted its freshwaterinflows to grow food for hungry goldminers. As the state has grown, the Deltahas become the center of a water systemdelivering supplies from the wetternorthern region to the more populousand drier southern region. As Figure 2shows, land conversion, water develop-ment and flood control projects through-out the Central Valley have drasticallyaltered freshwater flows in the estuary.

Since the completion of Friant Damin the 1940s, most years the entire flowof the upstream reaches of the SanJoaquin River is diverted, leaving a dryriverbed upstream of its confluence withthe Merced River. In 1956, the federalCentral Valley Project (CVP) began to

CHAPTER 1

Introduction

export large volumes of water into theDelta Mendota canal to assist farmersalong the San Joaquin River whose sup-plies had been diverted south by theFriant project, as well as to supportexpanded agriculture on the arid westside of the San Joaquin Valley. Figure 3illustrates how Delta exports have grownover the last 50 years. Exports sharplyincreased in the late 1960s, when theCalifornia State Water Project (SWP)was completed, principally to provideadditional water supplies to urban south-ern California and the agriculture in-dustry in Kern County. At the same time,the CVP completed its San Luis Unit,including a contract for more than1,000,000 acre-feet with the WestlandsWater District. Exports of fresh watersteadily increased until 1991, when alengthy drought forced their reduction.

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Deltaoutflow

San JoaquinRiverinflow

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inflow

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FIGURE 2Changes to Delta flows, February–June, 1987–1992 drought

Land conversion, water development and flood control projects throughout the Central Valley havealtered the volume and timing of flows into and out of the estuary. The changes are particularlynoticeable in dry years such as the 1987–1992 drought.

Source: California Department of Water Resources, Interagency Ecological Project

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Exports are once again on the rise, reach-ing the highest levels ever in three out ofthe past five years, with an all-time highof 6.4 MAF at the export pumps in 2005.

Historical impacts on the estuaryAs the physical and ecological processesin the Bay-Delta system have changed,

the estuary’s fisheries have beendevastated. By the late 20th century, theoverall decline of the aquaticenvironments in the Central Valley andBay-Delta was apparent. The winter-run Chinook salmon population had,until 1978, always been measured in thetens of thousands, but was down to 191fish returning in 1994. Populations of

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FIGURE 3Historic Delta exports, 1956–2005

In recent years, both state and federal exports have been steadily rising, with three out of the past fiveyears reaching record highs, and an all-time high of 6.4 million acre-feet was reached in 2005.

Source: California Department of Water Resources

Human demands on theBay-Delta system havestrained the speciesdependent on it. Chinooksalmon spend most oftheir lives in salt water,but they spawn and hatchin freshwater streams.The winter-run Chinooksalmon population had,until 1978, always beenmeasured in the tens ofthousands, but was downto 191 returning fish in1994.

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both the Bay-Delta’s resident fish andthe salmon and steelhead that passedthrough the Delta en route to and fromspawning grounds in Central Valleystreams showed similar trends. Shortlyafter a severe drought from 1987–1992,a number of species were listed for pro-tection under the state and federalEndangered Species Acts. The listing ofDelta smelt is of special concern as itsone-year life cycle makes it particularlyvulnerable to extinction. One year ofvery low numbers could be devastatingto the smelt population. Initial Endan-gered Species Act listings include:

• Winter-Run Chinook, Endangered,California ESA, September 22, 1989

• Delta Smelt, Threatened, FederalESA, March 5, 1993

• Steelhead, Threatened, Federal ESA,May 18, 1998

• Spring-Run Chinook, Threatened,California ESA, February 6, 1999

• Splittail, Threatened, Federal ESA,March 10, 1999 (subsequently removed)

A declining resourceIn recent years, the health of theBay-Delta ecosystem has becomeincreasingly precarious and new threatsare on the horizon, in particular theproposed increase in capacity to exportwater from the Delta. As exports havecontinued to rise, recent surveys haveshown a sharp decline in populations ofestuarine fish. Delta smelt, listed underthe Endangered Species Act a decadeago, are at their lowest level ever(Figure 4).1 In addition, juvenile stripedbass are at their lowest levels in fourdecades and both longfin smelt andthreadfin shad populations are reachingnear-record lows.2 Contributing tothese declines is a sharp reduction in theabundance of zooplankton, particularlya calanoid copepod, which is the pri-mary food for young estuarine fish as

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*No data available for 1974 and 1979

FIGURE 4Historic Delta smelt abundance, 1967–2004

The protective mechanisms of the WQCP, the CVPIA and the EWA are in place to protect sensitivespecies such as Delta smelt, an estuarine fish found only in the Bay-Delta. Populations of Delta smelt,listed under the Endangered Species Act a decade ago, are at the lowest levels ever, down from a pop-ulation index of 864 in 1999 to 74 in 2004. Source: California Department of Fish and Game fall mid-water trawl

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well as older life stages of Delta smelt.The Interagency Ecological Program, acollaboration of state and federalagencies focusing on the ecology of theBay-Delta estuary, is currently con-ducting a comprehensive review of the

possible causes of this most recentdecline in Delta fisheries. The programwill specifically investigate the degree towhich pollution, invasive species andwater project operations are responsiblefor the decline.

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In response to the declining conditionof the Bay-Delta in the 1990s, a numberof environmental water requirementswere developed to lessen the impacts ofthe water projects. These requirementswere designed to provide increasedinstream flows or curtail export pumpsat key times to protect fisheries. Today,three important requirements fall underthe plan developed in 2000 by the state-federal CALFED Bay-Delta Authority.3

In particular, the CALFED Plan pro-vides three tiers of protection which in-clude the Environmental Water Account(EWA), the Central Valley ProjectImprovement Act (CVPIA) and theWater Quality Control Plan (WQCP).An overview of these three environ-mental water requirements follows.

CALFED and the EWAIn 1995, to address the conflict overcompeting human demands in the Deltaand declining fisheries, state and federalagencies, water contractors, publicinterest and environmental groups andothers went to work on a long-termplan. Many elements of the vast pro-gram under CALFED’s purview werecontentious, though perhaps none somuch as the rules governing exportpumping. Fishery agencies and environ-mentalists asserted that additional pro-tections were needed to reduce exports,

CHAPTER 2

Overview of environmental water requirements

especially when at-risk populations werein the vicinity of the pumps. Othersagreed that some additional protectionwas necessary but pointed out that itwas not always possible to identify inadvance when export curtailments toprotect fish from direct entrainmentwould be needed.

At the behest of then-Secretaryof Interior Bruce Babbitt, CALFEDagencies and stakeholders were taskedto find a mechanism for applying exportreductions on a real-time basis, ratherthan on a fixed schedule. The idea wasthat the most efficient way to balancecompeting objectives for water exportand environmental protection was notto determine in advance when exportsought to be curtailed to reduce fishmortality, but to provide a mechanismwhereby fishery scientists with detailedmonitoring capabilities could requestreductions when fish would otherwisebe entrained in large numbers at theexport pumps.

After months of comprehensive“gaming” exercises, during which fisheryscientists, project operators and otherssimulated how such real-time changesto project operations might be accom-plished in response to monitoring data,a plan for the EWA emerged. Success-fully negotiating the EWA was a keycomponent that allowed the finalCALFED Plan to be released in 2000.

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CVPIA passed by Congress, establishing the AFRPBay Delta Accord signed, establishing the WQCP

CVPIA b2 implemented (1999 Decision)CALFED Record of Decision signed, establishing the EWA

CVPIA b2 revised (2003 Decision)

� � � � �

Timeline of environmental water requirements

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The EWA was adopted as a watermanagement tool intended to protectendangered fish from the harmful oper-ational impacts of the federal and statewater projects without reducing existingwater supply or deliveries from the Delta.In general, U. S. Fish and Wildlife Service(FWS), National Marine FisheriesService (NMFS), and California Depart-ment of Fish and Game (DFG) wouldact as management agencies, using moni-toring data, scientific understanding andprofessional judgment to decide whichactions were required to protect andrecover Delta fish populations andecosystem function. The U.S. Bureauof Reclamation and California Depart-ment of Water Resources (DWR) wouldact as the project agencies that overseethe operation of the EWA and implementthose actions deemed necessary by thefishery agencies. EWA water supplieswould be acquired either through apply-ing a set of different tools used to gainsupplies during system operations (i.e.,operational assets) or through purchases(i.e., purchased assets) (Table 1).

The EWA would protect fish frommortality due to entrainment in thepumps and ensure reliable supplies forthe water contractors while providingthem with near-absolution from addi-tional compliance with the Endangered

Species Act. Without the EWA inplace, additional pumping would in-crease the number of fish “taken” atthe pumps, thereby increasing the like-lihood of ESA non-compliance forwater contractors. The EWA is thuseffectively an insurance policy forwater contractors—providing sub-stantial economic benefits by assuringreliable supplies without fear that the

CALFED’s three tiers ofenvironmental protectionTier 1: Consists of regulatoryrequirements including Deltasmelt and winter-run Chinooksalmon biological opinions, WQCPand 800,000 acre-feet of suppliespursuant to CVPIA Section 3406(b)(2).

Tier 2: Comprised of environmentalbenefits provided by the EWA andEcosystem Restoration Program.Tier 2 is a mechanism to assure thatwater is provided for fish protectionand recovery, without a reductionin deliveries to water users.

Tier 3: Founded on the commitmentof state and federal agencies tomake additional water available ifthe combined protections of Tier 1and 2 were inadequate to protectESA-listed species.4

TABLE 1Proposed sources of water for the EWA

Action description Water available annually (average)

Operational assets 195,000 acre-feetSWP pumping of (b)(2)/ERP upstream releases 40,000 acre-feet2

EWA use of joint point 75,000 acre-feetExport/inflow ratio flexibility 30,000 acre-feet500 cfs SWP pumping increase 50,000 acre-feet

Purchased assets 185,000 acre-feetPurchases—south of Delta 150,000 acre-feetPurchases—north of Delta 35,000 acre-feet

Total 380,000 acre-feet

Source: CALFED Record of Decision

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Endangered Species Act will diminishtheir supplies.

The CALFED Plan describes theEWA as the second of three “Tiers”of environmental water supplies (seesidebar). Tier 1 includes regulatoryrequirements that were already inplace, including the WQCP, CVPIAsupplies and rules for project opera-tions, to protect Delta smelt andwinter-run Chinook salmon underthe Endangered Species Act. Giventhat the EWA would interact so closelywith actions taken pursuant to theCVPIA, the CALFED Plan madeclear that Tier 1 would include CVPIAsupplies that were available under thefederal policy for B2 supplies estab-lished in 1999 by the Department ofthe Interior.

During CALFED’s gaming process,agency staff projected that an annualaverage of 195,000 acre-feet would beavailable for the EWA in the normalcourse of CVP and SWP operations(Table 1). Additionally, agencies electedto commit to purchasing supplies amount-ing to 185,000 acre-feet per year.Together, these operational and pur-chased assets would total 380,000 acre-feet per year on average.

In exchange for CALFED’s three-tiered suite of protections, the fisheryagencies agreed that they would requireno further reductions beyond existingregulatory levels in CVP or SWP Deltaexports for the protection of state andfederally listed, threatened and endan-gered species. In essence, the water userswere guaranteed a reliable supply ofwater, without unscheduled interrup-tions due to compliance with theEndangered Species Act. These ESAcommitments were to be renewedannually and were contingent on fullfunding and availability of the threetiers of protections.

CVPIA and the Anadromous FishRestoration ProgramPrior to the EWA, Congress passed theCVPIA in 1992, largely in response tothe ecosystem decline in the Bay-Deltaand Central Valley watersheds. TheAct made protection of fish and wildlifea priority and included a directive toachieve a reasonable balance betweenthe requirements of fish and wildlifeand other project purposes. The CVPIAcontains a number of landmark pro-visions that substantially modify and

The Sacramento Riverand the San JoaquinRiver are the two maintributaries that flow intothe Bay-Delta. Of the two,the Sacramento Riverprovides the bulk ofoutflow to the Bay and isa critical spawninghabitat for winter-runChinook salmon.

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modernize the CVP, including directivesto provide additional water for thebenefit of fisheries and wetlands in theCentral Valley and Bay-Delta.5

The Act’s most controversial elementhas been its Anadromous Fish Restora-tion Program (AFRP) and the subse-quent authorization to modify waterproject operations to accomplish its goalof doubling anadromous fish popula-tions by 2002.6 To implement theAFRP, the Act provides three watermanagement tools. The authorizedmodifications are usually referred to asB1, B2 and B3 supplies, named after thesections of the law in which they appear.In short:

• Section B1 instructs the CVP tomodify project operations for fishprotection as long as the timing andvolume of deliveries of the Project’scontractors are not impaired.

• Section B2 annually dedicates 800,000acre-feet of the Project’s water suppliesfor fish protection.

• Section B3 provides funding foradditional flow purchases by levyinga surcharge on water users.7

Due to its controversial nature,Section B2 was not fully implementeduntil seven years after the CVPIA hadpassed. In October 1999, the U.S.Department of the Interior released afinal decision for administering SectionsB1 and B2 jointly. Its principal pro-visions included measuring reservoirreleases that were increased to improveconditions for fisheries on four federallycontrolled streams (Sacramento River,Clear Creek, American River and Stanis-laus River), as well as any curtailmentsthat were made at the Delta exportfacilities to reduce entrainment of fishin the pumps. Under most circum-stances, these flow increases and exportreductions were based on the cumulative

net change to CVP operations duringthe course of a water year. The 1999Decision also, in recognition of the Act’sprimary purpose of doubling anadro-mous fish populations, insisted that asignificant portion of the CVPIA’s B2dedication be applied to protect salmonhabitat on CVP-controlled streamsfor spawning and rearing, rather thansimply providing safe passage throughthe Bay-Delta.

The Bay-Delta Accord and theWQCPAs the U.S. Department of the Interiorstruggled to implement the CVPIA,efforts to deal directly with the Bay-Delta’s ecological problems continued.After the State of California withdrewfrom its own effort to developalternative regulation for water projectoperations, the U.S. EnvironmentalProtection Agency (EPA) threatened topromulgate water quality standardsunder the Clean Water Act.8 Respond-ing to this warning, federal and stateagencies, water contractors and environ-mentalists negotiated a package ofenvironmental protections, operationsprotocols and funds for habitat restora-tion. On December 15, 1994, state andfederal agencies, joined by ten “inter-ested parties” including EnvironmentalDefense, signed the Bay-Delta Accord.The Accord established interim stan-dards for water project management andencouraged parties to work together ona long-term solution. As a result, thestate and federal government initiatedthe CALFED program, with a mandateof developing long-term solutions thatwould address water supply, water qual-ity, levee stability and ecosystem issuesfacing the Delta.

The SWP and CVP agreed to bearthe full responsibility for meeting theAccord’s flow objectives, with the

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expectation that the State WaterResources Control Board (SWRCB)would consider whether other wateragencies should also provide flows forthe Delta.9 According to the agreement,the majority of this burden would bemet by the CVP, using a portion of itsB2 account. The SWP’s contribution tothe Accord’s objectives was smaller onaverage, but significant in wet years. TheAccord’s objectives would be imple-mented as the newly-formed CALFEDProgram worked on a long-range plan.

The Bay-Delta Accord’s standardswere formally adopted in 1995 by theSWRCB as the WQCP for the SanFrancisco Bay and Sacramento-SanJoaquin Delta Estuary. In particular, theWQCP limits state and federal exportpumping to 35% of Delta inflow duringFebruary through June when estuarinefish breed, and to 65% of inflow duringthe rest of the year. The WQCP also

implemented the Accord’s “X2” recom-mendations for Delta outflow throughrequirements for low-salinity habitatduring the February through Juneperiod.10 In any given month during thisperiod, Delta outflow requirements aredetermined based on the natural flowsof the eight largest rivers in the Sacra-mento and San Joaquin Valleys.

Most elements of the WQCP havebeen incorporated by the SWRCB inits water rights orders. As a result, theWQCP’s outflow requirements, exportcurtailments and Sacramento Riverinflow requirements are met annuallythrough the operation of the CVP andSWP. The WQCP’s inflow objectivesfor spring inflow to the Delta fromthe San Joaquin River, however, areonly partially met by compensated con-tributions from local water agencies aspart of the Vernalis Adaptive Manage-ment Plan.11

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While some salmon populations haveimproved considerably, largely inresponse to improved instream flows inupstream tributaries and removal ofupstream passage impediments, theDelta’s estuarine fish are faring poorly.Populations of Delta fisheries have hitrecord lows at a time when projectexports have reached record high levels.At the same time, the guarantees ofenvironmental water envisioned in theCALFED Plan have fallen short oftheir objectives. As a consequence, theability of fishery agencies to manageDelta exports through application ofthe CVPIA and EWA supplies hasbeen significantly compromised. Thefollowing is an overview of the CVPIA’sand EWA’s performance and an esti-mate of how much the environment hasbeen underendowed.

Diminished CVPIA fisheriescommitmentsChanges in the application of theCVPIA have significantly reduced itsability to protect fish both upstreamand in the Delta. As a consequence,the EWA is now expected not onlyto do the job intended for it when theCALFED Plan was adopted but alsoto make up the water lost when theCVPIA’s protections were weakened.

Though it was incorporated as acornerstone of the CALFED Plan, theInterior Department’s 1999 Decisionfor administering Sections B1 and B2jointly was in force for only two years—2000 and 2001—after it was signed.During this period, only the annualincreased use of CVP supplies for fish-ery enhancement, in terms of eitheradditional reservoir releases for stream-

CHAPTER 3

Where are we today? Five years of CVPIA andEWA implementation

flow or export curtailment to reduceentrainment, was counted toward theCVPIA’s 800,000 acre-feet of yield, asdefined by Section 3406(b)(2). Occa-sions in which flow increases were sub-sequently “offset” by flow decreases,or vice versa, were attributed to the“reoperation” authorized by CVPIASection B1, pursuant to the CVPIA,as they did not affect water contractors.Similarly if winter storms followedfishery actions and reservoir storagewas “reset” as a result, the operationalchange was attributed as a reoperationand not charged to the B2 account.Also, in 2001, the 1999 Decision’sprovision that no more than 450,000acre-feet of the 800,000 acre-feet B2account would be charged to meetDelta obligations (i.e. WQCP stan-dards), was applied. As a result, anadditional 75,000 acre-feet of environ-mental water was purchased withCALFED funding.

The Interior Department’s 1999Decision was not to last, however. In1997, CVP contractors initiated liti-gation against the United States chal-lenging the Interior Department’s initialinterpretation of Section 3406(b)(2).Various environmental groups, includingEnvironmental Defense, and fishinggroups joined the suit soon thereafter.The U.S. District Court eventually ruledon a complex series of issues involvingvarious Department of Interior deci-sions over a five-year period.

In January 2002, the court issuedkey rulings that forced Interior to reviseits policies for “offset” and “reset.” Asa result, virtually all operational changesimplemented to improve fisheries wouldbe charged to the B2 account, even ifthe changes had no effect on con-

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tractors. The ruling did not address howInterior should apply the fishery pro-visions in Section 3406(b)(1) whichauthorize the Secretary “to provide flowsof suitable quality, quantity, and timingto protect all life stages of anadromousfish” as long as they “do not conflict withfulfillment of the Secretary’s remainingcontractual obligations to provide CentralValley Project water for other authorizedpurposes”. In addition, the court ruledthat the Interior Department had nodiscretion to limit how much of the B2account could be used in meeting itsshare of WQCP obligations.12 Theeffect of these rulings meant that, inmany years, the entire B2 account mightbe applied to meet the WQCP obliga-tions within the Delta, leaving no waterto enhance spawning and outmigrationof anadromous fish.

The Interior Department’s 1999Decision for use of CVPIA supplies was

unofficially displaced in 2002 by a newpolicy incorporating the court’s rulings.In 2003, Interior formally adopted anew policy that included not only theruling but also further diminished howmuch environmental water it wouldprovide in dry years. The 2003 policyallows water delivered to CVP con-tractors to be counted as water dedi-cated to fisheries protection.

Under the 2003 policy, the Fish andWildlife Service is forced to make diffi-cult choices with its limited B2 suppliesbetween taking upstream actions toprotect anadromous fish, or in-Deltaactions to reduce direct entrainment. In2002, for example, approximately331,000 acre-feet was charged to the B2account that would not have beencharged under the 1999 policy(Figure 5).

The court rulings and the InteriorDepartment’s revised policy have

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FIGURE 5Changes in Central Valley Project Improvement Act environmental “b2”water supplies

The Interior Department’s 2003 change in policy for applying the CVPIA’s environmental watersignificantly reduced the amount of water provided to protect and restore fisheries. This change hasundermined the protections provided in the CALFED Plan and has put additional pressure on the EWA.Source: U.S. Bureau of Reclamation provided daily operational data as well as the B2 accounting under its variouspolicies. Environmental Defense applied the Bureau’s accounting policy under its 1999 Decision to the 2002–2004project operations.

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effectively reduced CALFED’s Tier 1capabilities to near zero. As a resultof these changes, the EWA has beenexpected not only to do the job intendedfor it as part of the CALFED Plan butalso to make up the water lost as a resultof the court’s and the Interior Depart-ment’s interpretations of the CVPIA.

Diminished EWAThe EWA has had significantly lesswater than expected to do its job. Com-bined, the CVPIA and EWA have beenunderendowed by an average of 436,000acre-feet over the past three years.13 Yet,the need for a sustainable and reliablesupply of environmental water, in thecontext of both record levels of highexports and low fish populations, iseven more important today.

The EWA was created as an inno-vative tool intended to solve some of theserious ecosystem problems in the Delta.Unfortunately, due to a combination of

insufficient operational assets anddwindling funding, early on the EWAwas effectively robbed of some of itspotential (Figure 6). As a result, in itsfour years of operations, the EWA hasreceived mixed reviews.

From an operational perspective, theEWA has worked well to ensure reliablesupplies to water users and has hadsome positive effects on the Delta’saquatic habitat. EWA purchases, whenexecuted, have provided some environ-mental protection, which CALFED’sEWA Technical Review Panel hasnoted as one of the most effective ele-ments of the program.14 There havebeen various examples of fishery scien-tists using EWA supplies effectively toprovide additional Delta inflows ordecreasing export pumping to improveestuarine conditions.

Unfortunately, however, the EWAhas never received the amount of wateranticipated by the CALFED Plan. Onaverage, only 29% of the expected

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FIGURE 6Environmental Water Account export reductions to protect fisheries,2001–2004

The EWA is principally used to curtail exports for the benefit of threatened Delta fish species. Since2001, the ability of the EWA to do its job has been limited due to inadequate acquisition of bothoperational and purchased assets.Source: CALFED EWA Team, a multi-agency stakeholder group helping to coordinate the implementation of the EWA.

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195,000 acre-feet of operational assetshave been available. The initial assump-tions from CALFED’s gaming processthat preceded the EWA, projecting theEWA could expect significant supplies

through the normal course of projectoperations, have proven overly opti-mistic (Figure 7).

As a consequence, the EWA hashad to rely almost entirely on purchases

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FIGURE 7Environmental Water Account operational assets, 2001–2004

The CALFED Plan targeted 195,000 acre-feet of operational assets for the EWA. Since 2001, manytypes of operational assets have seldom been available and have, on average, only produced 29% ofthe target. Source: California Department of Water Resources, CALFED Plan

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FIGURE 8The Environmental Water Account

(a) The CALFED Plan targeted a 50/50 cost-sharing goal for the EWA among state and federal sources. Since 2001, however, the statehas covered the majority of the EWA’s costs. The state sources, comprised of various propositions, are running out and it is unlikelythat the state will be able to continue to fund the EWA. (b) In the absence of available operational assets, the EWA has had to relyheavily on purchased assets to acquire water.15 Source: California Department of Water Resources, U.S. Bureau of Reclamation

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from willing sellers to acquire its sup-plies.16 This approach worked well thefirst few years when significant bondfunds were available to endow the EWAwith purchasing power.17 As these vari-ous bonds, including Proposition 50,run out, it is uncertain how the EWAwill be funded in the future (Figure 8).Without extensive changes, futureprospects for a fully endowed EWAlook poor, given the state’s budget crisisand exhausted bond funding.

Dwindling assets have limited theEWA’s ability to do its job. In a typicalyear, most EWA actions to protect fish-eries are taken by curtailing export pump-ing to reduce entrainment and increasesurvival. Other actions have been taken

to supplement upstream flow releasesfor spawning and to control watertemperature. In recent years, the EWAhas increasingly been unable to achievedesired fish actions, despite growingevidence of declining fish populations.In 2004, the only fish actions takenwere to implement the Vernalis Adap-tive Management Plan and extend itsprotections into the late spring. Morerecently, in February 2005, after moni-toring indicated that Delta smelt popu-lations were at record low levels, fisherybiologists recommended that exports becurtailed to reduce entrainment. Agencymanagers, keenly aware that the EWA’ssupplies were scarce and concerned thatthere would be inadequate supplies avail-

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FIGURE 9Unmet environmental water targets, 2000–2005

Between 2002 and 2004, the EWA and the CVPIA have been underendowed, on average, by 436,000acre-feet. CVPIA supplies began diminishing after the Interior Department’s 2003 Decision (already inplace in 2002), which offered far less protection than the previous policy. The EWA, which began in2001, has never acquired the operational assets that were assumed in the CALFED Plan and itspurchased assets dropped significantly in 2004 due to funding limitations. Current trends indicate thatneither the EWA nor the CVPIA supplies are likely to be available in 2005 and beyond, as intended in theCALFED Plan, unless significant changes are made. Without adequate and reliable CVPIA and EWAsupplies, it is unclear whether the EWA’s role as an insurance policy protecting water contractors fromthe Endangered Species Act can or should continue.

Source: California Department of Water Resources, U.S. Bureau of Reclamation

� Target CVPIA (B2) � Target EWA purchases � Target EWA operational assets� Actual CVPIA (B2) � Actual EWA purchases � Actual EWA operational assets

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able later in the year, sharply reducedthe amount of EWA water that wouldbe provided to the endangered fish anddid not curtail exports as much or aslong as was requested.18

In summary, it is apparent thatfishery agencies now have more than400,000 acre-feet less water per yearin CVPIA and EWA supplies alone,compared with the requirements of the

CALFED Plan, with which to complywith ESA objectives and restore thehealth of the Bay-Delta ecosystem(Figure 9). The backstop for this short-fall, CALFED’s Tier 3, has no assets,no plan and has been virtually ignored.And, as the health of the Bay-Deltacontinues to spiral downward, exportsfrom the estuary have reached recordhigh levels.

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Since its inception, funding for theCALFED program, and particularlythe EWA, has largely relied on annualallocations from California’s GeneralFund and financing from bond reve-nues. Both of these sources are quicklydwindling, contrary to the CALFEDPlan’s expectations that long-termfunding would be available from thestate and federal government. Afterits first year, funding for the EWA hassteadily declined, hindering the abilityof the account to purchase water. Assources of public funding are becomingscarce and without reliable operationalassets, it is uncertain how the protec-tions included in the EWA, as setforth in the CALFED Plan, will beassured.19 Without a viable EWA, itis unclear whether its role as an insur-ance policy protecting water contractorsfrom the Endangered Species Act canor should continue.

Given the funding uncertainty, theBay-Delta Authority was charged withcompleting a ten-year finance plan in

CHAPTER 4

Future funding prospects are highly uncertain

2004 to determine how best to supportCALFED in the long-term. Given thelack of available public funding, therehas been a growing interest in lookingto the “beneficiary pays” principleincluded in the CALFED Plan, whichrelates directly to the concept of a “userfee.” Under this principle, the costs of aproject are allocated to specific entitiesin the same proportion as the direct andindirect benefits the entity is intendedto receive from the project.

The potential role of user fees andother finance strategies are currentlycoming into play as the CALFEDprogram undergoes an audit to evaluateits finance strategy, program manage-ment, overall program effectivenessand governance. The review process isexpected to be completed in late 2005and will include recommendations forthe future of the program. Our recom-mendations for providing and poten-tially increasing the environmental watersupplies required in the CALFED planare outlined below.

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There are many opportunities to realizethe environmental water assurancespromised in the CALFED Plan and toextend additional protection to the Bay-Delta estuary. The CALFED Planclearly states that the EWA should beexpanded with an appropriate share ofnewly developed water supplies.20 Themost logical approach to meetingCALFED’s objectives for improvingfisheries protection is to increase thewater supplies available to fish whenthey are at risk through flexibility inproject operations. Such protectionsshould be required as operating guide-lines included in the regulatory stan-dards to which water projects muchadhere.

As actions are taken to modify andmodernize water management in Cali-fornia, opportunities will arise forobtaining the water necessary to provideadditional flexibility. Some of the mostpromising opportunities for additionalenvironmental water are as follows.

Flexibility through integrationof existing projectsAt a closed-door meeting in Napa in2003, state and federal export agencies,along with their contractors, identifiedhow integrated operation of the SWPand CVP could generate additionalwater supplies.21 By integrating theconveyance-rich SWP with the storage-rich CVP, water contractors have shownthat exports can be increased. Theseadditional supplies should be providedto the environment as a first priority toensure additional operating flexibility tomitigate the adverse effects of waterproject operations, rather than to theexport agencies that are already enjoyinghistorically high export levels.

CHAPTER 5

Opportunities for greater environmental protection

Flexibility in increased exportcapabilityCurrent proposals by the federal andstate water projects and their contractorsto increase the capacity to export waterat the Delta pumping plants have metsubstantial resistance, given theirpotential impact on the Bay-Delta andits fisheries. In the event that pumpingcapacity is increased, however, werecommend that the additional capacity(estimated at 200,000 acre-feet) bededicated to improving the timing ofexports in order to protect fisheries. Wealso recommend that the overall volumeof exports should not be increased until,and unless, there is a viable long-termupward trend in estuarine health. At aminimum, imposing such a constraintwould motivate the water contractors toact creatively on behalf of estuarinerecovery. Even with these caveats,however, it may well not be feasible tocombine even higher levels of pumpingwith strong estuarine recoveryprograms, no matter how muchflexibility is given to the operators intiming exports.

Increase usable storage inSan Luis ReservoirThe CVP and SWP share San LuisReservoir, a 2 million acre-foot storagefacility located south of the Delta alongthe federal and state aqueducts. SanLuis is the primary reservoir for storingEWA supplies, but the EWA has onlyjunior rights in the reservoir and itssupplies can “spill” when the CVP andSWP fill their shares of the reservoir.Due to poorly located outlets, San LuisReservoir’s current storage capacity isnot fully usable without rendering theSanta Clara Valley Water District

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(SCVWD) unable to access its supplies.Solving this “San Luis Reservoir LowPoint problem” by physically modifyingthe reservoir would provide SCVWDwith both improved water quality andyear-round access to the CVP whilecreating another 200,000 acre-feet ofadditional active storage. The CVP andSWP have not, as of today, allocatedthis storage to a specific purpose. Thisadditional capacity should be dedicatedto the EWA to enhance the environ-ment and provide additional protectionwithout affecting water contractors.If, on the other hand, the additionalstorage is dedicated to increased watersupply, it may increase exports by200,000 acre-feet annually withoutmitigation and thereby exacerbateenvironmental problems in the Delta.

Restoring the CVPIA’scommitments to fisheriesprotection and restorationThere are several opportunities to attaingreater protection using the environ-mental water provided to the CentralValley and Bay-Delta by the CVPIA.The Interior Department should:

• Revise and greatly expand the useof “reoperation” pursuant to Section3406(b)(1)(B).22 Perhaps the single mostuseful application of the reoperationcriteria is clarifying that B1 reopera-tion can be used to allow reduced latesummer reservoir releases to compen-sate for increased springtime releasesto aid outmigration, without additionalcharges to the B2 account.23

• Formally implement the May 2003ruling of the Court of Appeals for theNinth District regarding the “PrimaryPurpose” of B2. As a result, the WQCPwould still be fully applied but signifi-cant portions of the B2 supply wouldin all years be dedicated to providing

for the spawning and outmigration ofsalmon and steelhead. The WQCPwould still be fully implemented. In2004, the Interior Department diddedicate an additional 166,000 acre-feet to comply with obligations underthe WQCP, but has shown no indi-cation of how, or when, it will establishan official policy consistent with thecourt’s ruling.

• Develop a policy to facilitate theauthorized “banking” of B2 water(Section 3408(d)). Currently, the B2account is in a “use it or lose it” situ-ation, in which at the end of the wateryear (September 30) any remainingB2 water is eliminated. In the 13 yearssince the CVPIA became law, the U.S.Department of the Interior has madeno serious attempt to implement theCVPIA’s authorization of banking.

Implementing CALFED’s EWPand Section B3 of the CVPIACALFED’s Environmental WaterProgram and Section B3 of the CVPIAare tools created to purchase water toenhance instream flows on upstreamtributaries. To date, however, neither toolhas lived up to its potential largely dueto a lack of dedicated funding. A seriouscommitment is needed to fully fund andimplement these tools, which could resultin improvements to both upstream andDelta environmental conditions.

Retiring drainage-impaired landin the San Joaquin ValleyThe U.S. Bureau of Reclamation is cur-rently reviewing alternatives to providedrainage service to dispose of salt-ladenagricultural run-off on the west sideof the San Joaquin Valley. The environ-mentally preferred alternative in thedraft Environmental Impact Statement

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involves the retirement of lands impairedby drainage which has left the soil salineand unproductive. A significant portionof the water saved as a result of landretirement should be dedicated to theenvironment to fulfill the assurances inthe CALFED Plan.

Implementing user feesThe CALFED Plan included severalcommitments to user fees and to thebeneficiary pays principle. In particular,it promised the creation of the Eco-system Restoration Program, financedpartially by user fees in the amount of$35 million per year. Revenues fromsuch a water use fee (as opposed to the

reallocation of existing user fees such asthose in the CVP Restoration Fund, ashas been proposed by some water users)could help assure that sufficient fundsare available for additional operationalflexibility and could be less subject tosignificant shortfalls than would be thecase where reliance is placed on stateand federal general funds.

A water use fee would also providewater contractors with significantincentives to manage their own suppliesin the most efficient manner. If the feeis high enough, water contractors mightfind that rather than export additionalwater, they might better develop theirown supplies or improve efficiency intheir water use.

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State and federal projects are exportingrecord volumes of fresh water from theBay-Delta while the Delta’s fisheriesand food web are severely distressed.Stakeholders have made great effortsover the years to forge creative solutionsto meet a variety of program objectives,including Bay-Delta protection, butthey have not been fully implemented.This report illustrates that while theenvironmental water supplies set forthin the CALFED Plan have not beenprovided, a number of opportunitiesexist to find the water needed to revivethe Bay-Delta.

Debate will continue not only onhow to balance the competing needsof environmental and developed water,but also how and when environmentalwater might best be applied. Researchis needed to investigate the connectionof introduced species, chemical con-taminants and other factors to recentfishery declines. Regardless, the health

CHAPTER 6

Conclusion

of the San Francisco Bay-Delta estuarydepends on a reliable set of environ-mental safeguards, including dependablewater supplies. The EWA and CVPIAsupplies that have been lost should bereplaced, and potentially expanded, assoon as possible.

Any plan to sustain the estuary mustinclude a methodology for using envi-ronmental water, assurances that waterwill be provided and consequences fornon-compliance. It is necessary thatfishery interests have a strong hand inthe operation of the water projects thatcontrol the flows into and out of theDelta. Over the last five years, the failureto implement the protective operatingcriteria outlined in the CALFED Planhas been unacceptable. It is time forgovernment agencies, water contractorsand the interested public to implementa sustainable plan to guarantee the long-term health of the San Francisco Bay-Delta estuary.

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1 Abundance of Delta smelt and other estu-arine species are estimated by a populationindex that is determined by the results of the“fall mid-water trawl,” conducted monthlySeptember through December at locationsthroughout the estuary.

2 Interagency Ecological Program Workplanto Evaluate the Decline of Pelagic Species inthe Upper San Francisco Estuary, 2005.

3 The CALFED Plan was formally releasedas a “Programmatic Record of Decision,”pursuant to state and federal environmentallaws on August 28, 2000.

4 Tier 3 was intended to be a set of actionsthat would be available if the EWA did nothave sufficient assets to accomplish itsobjectives. Despite the erosion of Tier 2,Tier 3 assets have never been provided noris there a plan in place to do so.

5 The CVPIA also addresses pricing policies,contract renewal, water marketing and waterconservation issues. All of these elementshave been subject to at least some degree ofcontroversy and have faced difficulties intheir implementation.

6 Anadromous fish live in the ocean butreturn to freshwater to breed. Most of thefocus of the AFRP has been on the fourruns of salmon native to the Central Valley:winter run, spring run, fall run and late-fallrun. The AFRP lists as a primary purposethe doubling of the natural production ofanadromous fish (an objective not met bythe 2002 target date).

7 Thoroughly addressing the use of SectionB3 of the CVPIA is beyond the scope ofthis report. To date, the use of this tool hasbeen limited.

8 The EPA has no authority to directly affectwater rights under the Clean Water Actbut the practical consequence of requiringsalinity reduction in the estuary is thatoutflows would need to be increased.

9 Other “local” water projects, in both theSacramento and San Joaquin basins, havenegotiated for the sale of water, both astransfers to other agencies or for environ-mental protection, but have not beenrequired to make any uncompensated con-tributions. For example, a group of wateragencies have formed the San Joaquin River

Notes

Group Authority to provide additionalspring flows at Vernalis to assist with out-migration of salmon.

10 X2 is the location, measured in kilometersfrom the Golden Gate Bridge, whereaverage daily salinity is 2 parts per thousand.The scientific underpinnings of the X2 stan-dard were established in a series of work-shops. See “Managing Freshwater Dischargeto the San Francisco Bay/Sacramento-San Joaquin Delta: The Scientific Basisfor the Estuarine Standard,” San FranciscoEstuary Project, 1993, J.R. Schubel et al.

11 The Vernalis Adaptive Management Plan(VAMP) is an experiment to determine theextent to which flows and exports impactSan Joaquin River juvenile salmon survivalas they outmigrate. The purpose of VAMPis to support the outmigration of SanJoaquin River salmon and reduce exportsat the federal and state pumps betweenApril 15 and May 15 (or when San Joaquinsmolts tend to be outmigrating). Challengesto VAMP that point out its inadequaciesin meeting the salmon doubling objectiveon the San Joaquin River have not beensquarely addressed by the SWRCB.

12 The CVPIA states that the AFRP’s primarypurpose is to double populations of anadro-mous fish, leaving water quality objectivesin the Bay-Delta and Endangered SpeciesAct compliance as secondary purposes.The Court of Appeals later ruled that theInterior Department did in fact need toapply the CVPIA’s primary purpose ofgiving anadromous fish first priority. TheInterior Department has issued no rulingclarifying its adherence to the ruling, but diddedicate additional supplies to its WQCPobligations beyond the B2 account in 2004.

13 EWA data was provided by the Departmentof Water Resources. CVPIA data was pro-vided by the U.S. Bureau of Reclamation.Environmental Defense applied Interior’s1999 Decision to the Bureau’s data for2002–2004.

14 Review of the 2003–04 Environmental WaterAccount (EWA). Submitted by the 2004EWA Technical Review Panel, January 17,2005.

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15 A target of $50 million annually for theEWA was initially proposed in “California’sWater Future: A Framework for Action”,released in June 2000 shortly before theCALFED Plan. This original estimateassumed that more than 80% of purchasedsupplies would be acquired south-of-Delta.Water managers have found it to be morecost-effective to purchase water north-of-Delta and move it south through the Deltaexport pumps when monitoring indicatesthat relatively few fish will be entrained inthe Delta export pumps.

16 Availability of willing sellers has not beenthe problem. Acquiring funding to pay thesellers has been the challenge.

17 Whether bond funds were intended to bespent on annual operations, rather than onlong-term or permanent capital improve-ments or acquisitions is an issue that hasnot explicitly been addressed in CALFED’sdecision-making.

18 Summary of interagency “Data AssessmentTeam” conference call February 1, 2005.

19 The acquisition of assets and assurance ofreliable supplies need not be identical tothose defined in CALFED’s EWA. The key

is to assure a sustainable and reliable supplyof environmental water for the purpose offlexible and prescriptive actions for optimumenvironmental protection.

20 CALFED Programmatic Record of Decision,August 28, 2000, p. 57.

21 Formally titled “Draft Proposition Concern-ing CVP/SWP Integrated Operations”, theNapa Proposition was made available to thepublic in August 2003.

22 The California Resources Agency tendsto agree with this suggestion. See Janu-ary 15, 2005 letter from California’sDepartment of Water Resources andDepartment of Fish and Game to theU.S. Bureau of Reclamation and the U.S.Fish & Wildlife Service regarding “Inte-gration of Central Valley Project Improve-ment Act Actions with the EnvironmentalWater Account.”

23 This amount of reoperation often approaches195,000 acre-feet since the CVP no longermakes releases to support its own exportsthrough “D1485 Wheeling” at the state’spumps in late summer. The CVP’s exportreductions at that time are properly con-sidered to be charges to the B2 account.

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