STATE OF CALIFORNIA
STATE WATER RESOURCES CONTROL BOARD
ORDER WR 99 - ___
In the Matter of License 1050 et al.
(Application 534 et al.),
NATOMAS CENTRAL MUTUAL WATER COMPANY,
Petitioner
SOURCE:
COUNTY:
ORDER APPROVING IN PART AND DENYING IN PART
PETITION FOR TEMPORARY WATER TRANSFER
1.0 INTRODUCTION
In this order, the State Water
Resources Control Board (SWRCB) approves in part a petition by Natomas Central
Mutual Water Company (Natomas) for a temporary change pursuant to
Water Code section 1725 in order to transfer water to the Santa Margarita
Water District in Orange County, California.
Natomas proposes to transfer water it is not using as a result of
conservation measures that it has employed since the mid-1980s that reduce its
diversion and use of water from the Sacramento River.
The SWRCB concludes that, pursuant
to Water Code section 1725, Natomas may transfer the right to use the amount of
water that Natomas would have consumptively used but for Natomas’s conservation
efforts. A reduction in diversions that
does not reduce consumptive use cannot be transferred pursuant to section
1725. Thus, for example, conservation
efforts that reduce diversions from the stream and return flows to the stream
by equal amounts would not result in a consumptive use savings that may be
transferred pursuant to section 1725.
The SWRCB finds that Natomas has
reduced its consumptive use by 1,995 acre-feet (ac‑ft). Therefore, Natomas’s petition is approved to
the extent of 1,995 ac-ft, subject to certain conditions specified below. The transfer of 1,995 ac-ft of water will
not injure any legal user of the water to be transferred or unreasonably affect
fish, wildlife, or other instream beneficial uses, because the water would have
been consumptively used had it not been conserved. Natomas’s petition is denied to the extent that it seeks to
transfer more than the reduction in consumptive use of 1,995 ac-ft that has
been established based on evidence in the record.
The record indicates that due to
its conservation efforts Natomas has reduced its diversions, as distinct from
its consumptive use, by approximately 17,200 ac-ft. This reduction in diversions is conserved water under Water Code
section 1011. Under that section,
Natomas’s right to use the amount of water conserved is protected from
forfeiture for non-use. The water saved
may be used as authorized under Natomas’s water rights if needed in the
future. The water may also be
transferable pursuant to other transfer provisions in the Water Code, provided
that the requirements of the particular transfer provision relied upon are
met. As stated above, one requirement
for temporary changes proposed under section 1725 is that the transfer be
limited to the amount by which consumptive use or storage is reduced. Transfers proposed under other provisions
are not subject to this limitation, although it may be necessary to limit the
amount of water transferred in order to ensure that the transfer will not injure
any third party water right holder, or unreasonably affect fish, wildlife, or
other instream beneficial uses.
2.0 FACTUAL AND PROCEDURAL
BACKGROUND
Natomas is a California corporation
owned by 250 shareholders, all of whom are landowners within its service
area. Natomas filed the subject transfer
petition on April 26, 1999, in cooperation with Western Water Company
(WWC). Natomas proposed to transfer the
right to use an amount of water that it claimed to have conserved under Water
Code section 1011. Natomas asserted that it had conserved water as a result of
conservation efforts implemented during the period between 1981 and 1986. Natomas’s claimed conservation efforts
included water recirculation and improved water management, crop shifts, laser
leveling of fields, canal lining, and weed control.
Originally, Natomas proposed to
transfer the right to use 30,000 ac-ft of water, the amount by which Natomas
claimed to have reduced its diversions.
By letters dated June 21, 1999, and July 20, 1999, however, Natomas
revised its proposal to 8,860 ac-ft, the amount by which Natomas claimed to
have reduced its consumptive use. At
the hearing, Natomas again revised its proposal, claiming that in the year of
the transfer its transferable consumptive use savings would be 14,000
ac-ft. Natomas petitioned to transfer
water during 1999 or 2000, depending on the timing of SWRCB action on the
petition. Due to the date of this
order, the transfer will take place in the year 2000.
Natomas holds several licensed
rights, used primarily for irrigation purposes: licenses 1050, 2814, 3109, 3110, 9794, and 9989 (applications
534, 1056, 1203, 1413, 15572, and 22309).
The licenses are for direct diversion from the Sacramento River. The authorized season of diversion under
each license varies. Collectively, the
season of diversion extends from March 1 to October 31. The combined maximum amount that may be
diverted is 137,547 ac‑ft per year.
The permissible rate of diversion under each license varies. The authorized place of use under Natomas’s
licenses is an area of 51,091 acres, which is located in the Natomas
Basin. The Natomas Basin is bounded on
the west by the Sacramento River, on the south by the American River, on the
east by a drain called the East Main Drain, and on the north by a canal called
the Natomas Cross Canal. Attachment 1
is a table summarizing the parameters of Natomas’s licensed rights. In addition to its licensed rights, Natomas
has a contractual right to water under Contract No. 12-06-200-885A with the
United States Bureau of Reclamation (USBR).
The proposed transfer entails an
expansion of the existing place of use under Natomas’s licenses to allow use of
water in Santa Margarita Water District's (District) service area, located in
the southeastern corner of Orange County, California. Natomas has secured a commitment from the District to purchase up
to 10,000 ac-ft of water. In addition,
the transfer entails a change in the existing purposes of use to include
municipal and industrial uses.[1] The new point of diversion is located at the
State Water Project's Harvey O. Banks Pumping Plant.
The SWRCB issued public notice of
Natomas’s petition on May 17, 1999.
Three parties - the State Department of Water Resources (DWR), the USBR,
and the State Water Contractors - filed timely objections to the proposed
transfer. DWR and the USBR own and
operate the State’s two largest water supply projects: the State Water Project and the Central
Valley Project, respectively. The State
Water Contractors represent 27 public agencies that receive water from the
State Water Project.
DWR objected on the grounds that
(1) Natomas did not timely file periodic reports describing the amount of
reductions in water use due to water conservation efforts as required by
section 1011, (2) the requirements of section 1725 had not been met, and (3)
Natomas’s water rights were not adequate to support the transfer. The USBR objected on the grounds that (1)
Natomas had not shown that it had reduced its consumptive use, (2) the transfer
would deplete the water supply available for the Central Valley Project, and
(3) the transfer could affect fish, wildlife or other instream beneficial
uses. The State Water Contractors
objected on the grounds that (1) a transfer of water that had never been
consumptively used could impact State Water Project supplies and therefore
injure the agencies who rely on the State Water Project for their water supply,
(2) Natomas had not met the requirements of section 1011, including the
reporting requirements, and (3) the petition did not separate Natomas’s water
rights from its contractual rights.
Natomas petitioned to transfer
water pursuant to Water Code section 1725.
Section 1725 allows a temporary change in point of diversion, place of
use, or purpose of use, for a period of one year or less, for the transfer of
water that otherwise would have been consumptively used or stored. Water Code section 1727 delineates the
procedure for reviewing a transfer proposed to be made pursuant to section
1725. Under section 1727, the SWRCB
must initially evaluate whether the proposed transfer will injure any legal
user of the water proposed to be transferred, or unreasonably affect fish,
wildlife, or other instream beneficial uses.
(Wat. Code, § 1727, subd. (a).)
If the SWRCB finds that the transfer will not injure other legal users
or unreasonably affect fish, wildlife, or other instream beneficial uses, then
the transfer may be approved. (Wat.
Code, § 1727, subd. (b).) If, on the
other hand, the SWRCB is unable to make those findings, then the matter is to
be set for hearing. (Wat. Code, § 1727,
subd. (c).) A transfer made pursuant to
section 1725 is exempt from the requirements of the California Environmental
Quality Act (CEQA). (Wat. Code, §
1729.)
Upon initial evaluation, the Chief of the Division of Water Rights (Division), acting pursuant to power delegated by the SWRCB, was unable to make the findings required under section 1727. By letter dated July 12, 1999, the Division Chief explained that it appeared that the water conservation efforts undertaken by Natomas resulted in a significant decrease in the amount of water diverted, but did not result in a reduction in consumptive use. Approval of the transfer could therefore lead to an overall increase in consumptive use, which could in turn injure other legal users, or unreasonably affect fish, wildlife, or other instream beneficial uses. Because the Division Chief was unable to make the requisite findings, a hearing before the SWRCB was scheduled on Natomas’s petition. The SWRCB conducted the hearing on August 16, 17, and 25, 1999.
3.0 NATOMAS’S RIGHTS ARE ADEQUATE TO SUPPORT THE TRANSFER
A threshold issue is the adequacy
of Natomas’s water rights to support the transfer.
As set forth above, the maximum
amount that Natomas may divert under its licenses is 137,547 ac-ft per
year. The USBR challenged the adequacy
of Natomas’s rights to the extent that they exceed 98,200 ac-ft, the so-called
base supply quantified in Natomas’s contract with the USBR. (See Natomas Exhibit 5b, Contract Between
the United States and Natomas Central Mutual Water Company, Diverter of Water
from Sacramento River Sources, Providing for Project Water Service and
Agreement on Diversion of Water, Exhibit A.)
The base supply is the amount of water that Natomas may divert under the
contract without charge. Under the
contract, Natomas may purchase an additional 47,800 ac-ft, which is labeled
project water supply, for a combined total of 146,000 ac-ft. (Ibid.)
Although the USBR did not contend
that Natomas’s water rights were necessarily limited to the base supply under
the contract, the USBR did assert that the amount of the base supply was based
on studies, including the 1956 Cooperative Study Program, which estimated the
amount of natural flow available to satisfy Natomas’s water rights. (USBR Exhibit 1, Testimony of
Gale Heffler-Scott, at pp. 6-9.)
In essence, the USBR argued that any water that Natomas diverts in
excess of 98,200 ac-ft might be Central Valley Project water released from
storage, and not natural flows which Natomas may divert under its licensed
rights. (See USBR Exhibit 2b
[chart purporting to show that the proposed transfer would increase
Natomas’s demand over the base supply, thereby increasing Natomas’s demand for
project water].)
The transfer will entail changes in
point of diversion, place of use, and purposes of use under Natomas’s licenses,
which are for direct diversion from the natural flow of the Sacramento
River. Natomas cannot transfer the
right to use water to the extent that natural flows are not available to
satisfy the right during the period of the transfer. The USBR presented no evidence, however, that showed that natural
flows in the Sacramento River are inadequate to fully satisfy Natomas’s
licensed rights during the transfer period.
The USBR did not introduce into the record in this proceeding the
studies relied upon in calculating Natomas’s base supply, or any other data
concerning the availability of Sacramento River water. (See T. 536:11-25; 537; 538: 1-5.) Although the parties to the contract may
have set the base supply based on their estimates of the natural flows
available for diversion by Natomas, they agreed to a base supply for purposes
of establishing the price of water under the contract. For purposes of water right administration,
the base supply under the contract does not and could not establish the amount
of water that Natomas is entitled to divert under its licenses.
The availability of unappropriated water
is a prerequisite to the issuance of a permit (Wat. Code, § 1375, subd. (d)),
which, in turn, is a prerequisite to the issuance of a license. A finding that unappropriated water is
available, for purposes of issuing a water right permit, does not necessarily
establish that water is available for appropriation in any given year
throughout the season of diversion authorized under the permit. Where it is in the public interest, the
SWRCB may issue a permit that allows water to be diverted during a period of
relative abundance, with appropriate conditions to prevent water from being
diverted during periods when supplies are scarce and unappropriated water is
not available. Nevertheless, the
issuance of permits and licenses to Natomas gives at least some indication that
unappropriated water is available, and nothing in the record indicates that the
natural flows available during the period of the proposed transfer are
insufficient to fully satisfy Natomas’s licensed rights. The SWRCB concludes that Natomas’s rights
are adequate to support the proposed transfer.
This finding is made solely for the purposes of acting on Natomas’s
pending petition. The SWRCB could reach
a different conclusion in a future proceeding, depending on the evidence
presented in that proceeding.[2]
4.0
NATOMAS HAS
CONSERVED WATER IN ACCORDANCE WITH WATER CODE
SECTION 1011
Having considered the adequacy of
Natomas’s rights to support the transfer, the next issue is whether Natomas has
conserved water in accordance with Water Code section 1011. The SWRCB concludes that it has. Section 1011 provides in pertinent part as
follows:
“When any person entitled to the
use of water under an appropriative right fails to use all or any part of the
water because of water conservation efforts,
any cessation or reduction in the use of the appropriated water shall be deemed
equivalent to a reasonable beneficial use of water to the extent of the
cessation or reduction in use. No forfeiture of the appropriative right to
the water conserved shall occur upon the lapse of the forfeiture period
applicable to water appropriated pursuant to the Water Commission Act or this
code or the forfeiture period applicable to water appropriated prior to
December 19, 1914.
“. . .
“For purposes of this section, the term ‘water conservation’ shall mean the use of less water to accomplish the same purpose or purposes of use allowed under the existing appropriative right. Where water appropriated for irrigation purposes is not used by reason of land fallowing or crop rotation, the reduced usage shall be deemed water conservation for purposes of this section.
“Water, or the right to the use of
water, the use of which has ceased or been reduced as the result of water
conservation efforts as described in subdivision (a), may be sold, leased,
exchanged, or otherwise transferred
pursuant to any provision of law relating to the transfer of water or water
rights, including, but not limited to, provisions of law governing any
change in point of diversion, place of use, and purpose of use due to the
transfer.”
(Emphasis added.)
Section 1011 preserves an
appropriative water right when less water is used under the right due to water
conservation efforts. Essentially,
section 1011 requires water to be treated as though it were used, when in
actuality the water is conserved. Any
reduction or cessation in use due to conservation efforts is “deemed equivalent
to a reasonable beneficial use . . . .”
Thus, the right to use the amount of water conserved is not subject to
forfeiture for nonuse. The right
thereby protected from forfeiture may be used later if needed. The right to use the water conserved may
also be transferred pursuant to other provisions of law authorizing transfers.[3]
The purpose of section 1011,
subdivision (a) was to eliminate the disincentive to conserve water that was
created by the forfeiture doctrine, by protecting the portion of an
appropriative right that is not exercised due to conservation efforts from
forfeiture for nonuse. Section 1011,
subdivision (a) was adopted upon the recommendation of the Governor’s
Commission to Review California Water Rights Law. The language of subdivision (a) was taken from proposed
legislation contained in the Commission’s Final Report, dated December
1978. (Exhibit C of the State Water
Contractors, Final Report, Governor’s Commission to Review California Water
Rights Law, pp. 80-81.)[4] The Commission explained the need for
subdivision (a) as follows:
The forfeiture doctrine discourages water conservation because an appropriator who uses less water than his entitlement may lose his right to the extent of the nonuse. The doctrine thus deters conservation by encouraging an appropriator to use the full amount of the right. The Commission suggests modification of the doctrine to allow an appropriator to retain the full amount of the right where he has not used the full amount due to water conservation efforts.
(Final Report, supra, at p. 60.)
Natomas probably has conserved approximately
17,200 ac-ft due to its conservation efforts.
Natomas’s diversions from the Sacramento River have dropped
significantly since it implemented its conservation efforts in the period
1981-1986. The average amount of water
diverted by Natomas per acre during the period 1979-1985 was 4.27 ac-ft, and
the average amount diverted per acre during the period 1986-1998 was 3.54
ac-ft. (Natomas Exhibit 15.) The difference is a reduction in diversions
of 0.73 ac-ft per acre. Natomas
estimated that it would irrigate 23,563 acres in 1999. (Natomas Exhibit 15.) Using that figure for purposes of
comparison, Natomas’s total diversions have been reduced by approximately
17,201 ac-ft. This decrease likely is
the result of Natomas’s recirculation system, which is discussed in greater
detail in section 7.5.1, below. Under
section 1011, this reduction in diversions is conserved water. Natomas’s right to use the amount of water
conserved is protected, and that right may be used as a basis for transfers,
provided that the requirements of applicable transfer provisions are met.
4.1 Reporting Requirements
DWR and the State Water Contractors
argued that Natomas failed to comply with the reporting requirements that are
contained in section 1011. The Report
of Licensee forms originally submitted by Natomas did not report its
conservation. Natomas later amended its
Report of Licensee forms to reflect information concerning its conservation
efforts. The SWRCB finds that, under
the circumstances of this case, the reporting requirement has been satisfied by
the amended reports and the substantial documentation in the record confirming
that Natomas reduced its diversions by approximately 17,200 ac-ft due to
deliberate conservation efforts.
Section 1011 provides:
“The [SWRCB] may require that any
user of water who seeks the benefit of this section file periodic reports
describing the extent and amount of the reduction in water use due to water
conservation efforts. To the maximum extent possible, the reports
shall be made a part of other reports required by the board relating to the use
of water. Failure to file the
reports shall deprive the user of water of the benefits of this section.”
(Emphasis added.)
Since 1980, the SWRCB has required
permittees and licensees to document their conservation efforts. Consistent with the statutory language, the
SWRCB has incorporated the section 1011 reporting requirements into its Report
of Licensee form. Licensees must
complete and submit this form once every three years. (Cal. Code Regs., tit. 23, §§ 847, 848.) The form asks licensees to describe their
conservation efforts, and “[I]f credit toward beneficial use of water . . . for
water not used due to a conservation effort is claimed under Section 1011 . . .
,” to set forth the amount of water conserved in the three years of
record.
Following implementation of its
water conservation efforts in the period 1981-1986, Natomas submitted Report of
Licensee forms with the section concerning conservation left blank. The reports were signed under penalty of
perjury. In 1996, Natomas filed amended
forms that describe its conservation efforts and set forth the amount of water
that Natomas claims to have conserved.
Although it is clear that the
filing of the reports was mandatory, the form did not expressly state that
filling out the section on conservation was mandatory if the filing party
wished to receive the protection of section 1011 for any conserved water. In this instance, Natomas’s failure to do so
may be excused on that basis. Natomas
has maintained excellent records on its water use and conservation
savings. Accordingly, failure to
complete the section on conservation may have been an administrative
oversight. In order to avoid any
question in the future as to whether filling out that section is mandatory, the
Division is directed to amend the Report of Licensee form and the Progress
Report by Permittee form. The forms
shall be amended to make clear that filling out every section of the form is
mandatory, if applicable, and that failure to fill out the section regarding
water conservation will deprive the licensee or permittee of the benefits of
section 1011. The Division is directed
further to create a database containing those permittees and licensees who
report that they have conserved water.
The database should reflect conservation reported beginning in the year
2000. It will be useful to consolidate
this information and make it accessible to SWRCB staff and to the public.
It also merits note that Natomas’s failure to report conservation efforts in a timely manner called into question the credibility of its claim to have conserved water. Late reporting raises the question whether the nonuse of water was in fact due to conservation efforts, or if the water user is attempting to characterize nonuse that occurred for some other reason as water conservation in order to obtain the protections of section 1011. Conversely, reporting water conservation in a timely manner, while insufficient in itself to prove water conservation, would tend to support a claim that the nonuse of water was the result of water conservation efforts. For this reason, it is in every water user’s best interest to report water conservation efforts in a timely manner. In this case, however, Natomas has overcome the credibility problem posed by its failure to timely report its conservation efforts by submitting convincing evidence in a public hearing that it has in fact conserved water due to water conservation efforts.
5.0 THE TRANSFER MUST CONFORM TO THE SUBSTANTIVE REQUIREMENTS OF SECTION 1725
Having established that
Natomas has conserved water in accordance with Water Code section 1011,
the next question is what amount of the water conserved may be transferred pursuant
to Water Code section 1725. Some
parties, including Natomas and the San Joaquin River Group Authority, have
suggested that section 1011, subdivision (b) allows for the transfer of
conserved water without regard to all of the substantive requirements of the
transfer provision that is relied upon by the transferor. The SWRCB disagrees. For the reasons explained more fully below,
the SWRCB concludes that all of the requirements for standard water transfers
apply to conserved water transfers.
Therefore, whether conserved water is transferable depends on the
transfer provision that is relied upon and the circumstances of the case. The SWRCB concludes further that in this
case, section 1725 allows for a transfer of the amount of water that, but for Natomas’s
conservation efforts, would have been consumptively used during the transfer
period.
At the outset, it is important to
recognize the significance of the question whether a conserved water transfer
must conform to the substantive requirements of the transfer provision relied
upon. The question is critical because
the transfer provisions contain protections for third party water right holders
and the environment. All of the
transfer provisions require a finding that the transfer will not injure other
legal users of water, and most of the provisions require a finding that the
transfer will not unreasonably affect fish, wildlife, and other instream
beneficial uses. (See Wat. Code, §
1021, subd. (b)[water leases]; Wat. Code, §§ 1702-1703, 1706 [changes in point
of diversion, place of use, or purpose of use]; Wat. Code, § 1725 [short-term,
or “temporary” transfers]; Wat. Code, § 1736 [long-term transfers]; Wat. Code,
§ 1740 [decreed rights] Wat. Code, § 1745.04 [transfers by water suppliers].)[5]
The requirement that a transfer not
injure other legal users is a codification of the common law “no injury
rule.” The no injury rule, a
fundamental tenet of water rights law, protects a junior right holder from
injury due to a change in the exercise of a senior water right. Thus, for example, the no injury rule
generally would operate to bar a change in place of use that reduces the return
flow relied upon by a downstream user.
As set forth above, the no injury rule applies to water transfers that
involve a change in point of diversion, place of use, or purpose of use under
the transferor’s rights.
The argument that the rules
governing the transfer of the right to use water that has been conserved are
different from the right to transfer a fully exercised right is inconsistent
with the plain meaning of section 1011, subdivision (b). Subdivision (b) expressly provides that
conserved water may be transferred “pursuant to any provision of law relating
to the transfer of water or water rights . . . .” The plain meaning of “pursuant to” is “conforming to; in
accordance with.” (2 The New Shorter
Oxford English Dictionary (1993) p. 2422.)
Accordingly, a conserved water transfer must meet all of the
requirements of the applicable transfer provision.
Legislative history also supports
this interpretation. As explained
earlier, the purpose of section 1011, subdivision (a) was to promote water
conservation by protecting from forfeiture the portion of an appropriative
right that is not exercised due to conservation efforts. The purpose of section 1011, subdivision
(b), which was added to section 1011 in 1982, was to promote water transfers by
clarifying that the right to use water that has been conserved may be
transferred, pursuant to other transfer provisions. Subdivision (b) was based on the recommendations of a report
prepared by the California State Assembly Office of Research (AOR) in response
to a request by Assemblyman Katz. (See
Exhibit B of the State Water Contractors, California State Assembly Office of
Research, A Marketing Approach to Water Allocation, p. 1.) The legislation that became subdivision (b)
originally was proposed by AOR’s report, and later was incorporated into
Section 4 of AB 3491 (Katz). (See AOR
Report, supra, at p. 46; Exhibit C of
the State Water Contractors, AB 3491 (Katz) 3/12/82 version, pp. 6-7.) According to AOR’s report, the legislation
was designed to facilitate transfers by clarifying that under existing law such
transfers could take place. (AOR’s
report, supra, at pp. 4, 46.)
Taken together, the legislative
history for subdivisions (a) and (b) of section 1011 indicates that the
Legislature intended merely to place those who conserve water on a par with
those who continue to fully exercise their rights. Nothing in the legislative history suggests that the Legislature
intended to place those who conserve water in a better position than those who
continue to fully exercise their rights by allowing the wholesale transfer of
conserved water without regard to the provisions that govern water transfers
generally.
In fact, the drafters of
subdivision (b) expressly stated that conserved water transfers would be
subject to the no injury rule, which was then and remains now a critical
component of all transfer provisions.
The AOR report stated at page 49:
“Current law requires findings that no third party will be injured prior
to permitting transfers. The proposed
legislation would have no effect on this policy, and in fact provides
safeguards for maintaining these rights.”
In addition, in a statement made on April 14, 1982, before the Assembly
Water, Parks & Wildlife Committee, Assemblyman Katz said that his bill
“would provide an additional flexibility by allowing for transfers without
jeopardizing the water right, providing there is no harm to other users.”
(Exhibit E of the State Water Contractors, p. 1.) If the Legislature did not intend for subdivision (b) to
supersede the no injury rule, it follows that the Legislature did not intend to
supersede the other components of the various transfer provisions either.
6.0 A CONSUMPTIVE USE SAVINGS MAY BE TRANSFERRED PURSUANT TO SECTION 1725
The transfer provisions under which
Natomas has petitioned to transfer water in this case are the short-term
transfer provisions contained in sections 1725-1732. Section 1725 permits a temporary transfer of water “if the
transfer would only involve the amount of
water that would have been consumptively used or stored by the permittee or
licensee in the absence of the proposed temporary change, would not injure
any legal user of the water, and would not unreasonably affect fish, wildlife,
or other instream beneficial uses.”
(Emphasis added.)
Section 1725 defines ‘consumptively used’ as “the amount of water
which has been consumed through use by evapotranspiration, has percolated
underground, or has been otherwise removed from use in the downstream water
supply as a result of direct diversion.”
By its terms, section 1725 allows
only for the transfer of water that the transferor would consumptively use or
store, but for the transfer. This
language has generated considerable confusion in this proceeding because
presumably Natomas will continue to conserve water whether or not the transfer
is approved. Under section 1011,
however, a reduction or cessation in use due to conservation efforts is deemed
to be the equivalent of reasonable, beneficial use. Thus, for purposes of section 1725, water that would have been
consumptively used but for water conservation efforts pursuant to section 1011
should be deemed to be the equivalent of water that would have been
consumptively used in the absence of the transfer. Accordingly, water may be transferred pursuant to section 1725 if
it would have been consumptively used in the absence of the transfer, but for
the transferor’s conservation efforts.
In short, a consumptive use savings may be transferred pursuant to
section 1725, provided that the other requirements contained in sections 1011
and 1725 are met.
This interpretation finds further
support in recently enacted legislation, SB 970 (Costa), effective January 1,
2000. (Stats. 1999, ch. 938, §
11.) SB 970 replaces Water Code section
1726 with a new section 1726.
Subdivision (e) of the new section 1726 specifies that the SWRCB is to
investigate whether a proposed short-term transfer would involve water that
“would have been consumptively used or stored . . . in the absence of the
proposed transfer or conserved pursuant
to Section 1011.” (Emphasis
added.) This language expressly
recognizes that conserved water may be the subject of a short-term transfer
pursuant to sections 1725-1732, provided that the water involved would have
been consumptively used or stored had it not been conserved.[6]
Sections 1725-1732 provide for the
expedited review of temporary transfers.
The benefits of a transfer under these provisions include an exemption
from the requirements of the California Environmental Quality Act. (See Wat. Code, § 1729.) Several of the parties have pointed out that
this expedited review procedure is justified because the transfer of water that
otherwise would be consumptively used or stored is unlikely to injure other
legal users of the water, or unreasonably affect fish, wildlife, or other
instream beneficial uses. On the other
hand, the transfer of water that historically has been conserved could have a
real-world impact on the stream system.
If such a conserved water transfer is approved, water that had been left
in the stream system due to conservation efforts would be diverted by the
transferee.
The impact must be measured,
however, relative to the transferor’s water use prior to undertaking water
conservation efforts. Section 1011
specifies that a reduction in use as a result of conservation efforts shall be
deemed equivalent to the use of the water.
If water that has been conserved were not treated as though it were
actually used, the protections afforded to the transferor by section 1011 would
be eviscerated. Just as section 1011
preserved Natomas's right to use the amount of water that it has conserved,
section 1011 has preserved Natomas’s right to transfer the amount of water that
it has conserved. Even though the
stream system would be impacted, no legal user could claim injury if Natomas
were to resume using the amount of water that it has conserved. (Natomas underscored this point by
threatening to cease its conservation efforts and resume its historic water use
if its transfer petition is not approved.
(Natomas Exhibit 5a, Written Testimony of Peter J. Hughes, pp. 4,
7.).) Similarly, no legal user can
claim injury if Natomas transfers water that would have been consumptively used
in the absence of the transfer, but for conservation efforts. Of course, prior to undertaking water
conservation efforts, Natomas could not effectuate a transfer that would injure
another legal user of the water, and Natomas cannot do so after having
undertaken such efforts. Thus, for
example, Natomas could not transfer a savings in the quantity of its diversions
to the extent that historic return flows would be reduced in a manner that
would injure another legal user of those flows.
7.0 NATOMAS HAS BEEN REDUCED ITS CONSYMPTIVE USE BY 1,996 ACRE-FEET
Natomas has demonstrated that for the
last eight to ten years, it has reduced its consumptive use by 1,995 ac-ft by
controlling weed growth along the canals within its service area. This savings will be discussed in greater
detail below. First, Natomas’s claim to
have reduced its consumptive use by more than 14,000 ac-ft is addressed.
7.1 Natomas’s
Water Balance Approach
Natomas’s method of calculating
consumptive use savings was to perform a water balance. For the reasons explained below, however,
Natomas’s analysis based on its water balance did not establish that Natomas’s
water conservation efforts have lead to a consumptive use savings.
Natomas’s water balance entailed
subtracting total outflow from the Natomas Basin from total inflow. (Natomas
Exhibit 1a, Written Testimony of Marc Van Camp, at p. 4.) The result of the water balance analysis was
a total consumptive use value in ac-ft for each of the years from 1979 to
1998. Natomas asserted that its
calculation of consumptive use included water that had been consumed through use
by crop evapotranspiration (ET), that had percolated underground, or that had
otherwise been removed from use in the downstream water supply. (Id. at p. 8.)
In order to measure the consumptive
use savings that resulted from its conservation efforts, Natomas used as a
baseline the average of the three highest years of consumptive use from the
period 1979 (the year when Water Code section 1011 was enacted) to 1985 (the
year when Natomas completed implementation of its conservation efforts). The average of the three highest years
(1979, 1981 and 1984) was 104,328 ac-ft.
Natomas compared this average to a performance standard of 89,000
ac-ft. The performance standard is roughly
equivalent to its average consumptive use, as measured by its water balance,
for the period 1986-1998. The
difference between 104,328 ac-ft and 89,000 ac-ft is 15,328 ac-ft. Based on this difference, Natomas increased
the amount of its proposed transfer from 8,860 to 14,000 ac-ft.[7]
7.2
The Average of the Three Highest Years is Not the
Proper Baseline
Comparing the average consumptive
use for the three highest years before implementation of conservation efforts
to the average year after implementing conservation efforts is not a valid way
to measure the water savings due to those efforts. By definition, there will always be a difference between the
highest years and the average, regardless whether any conservation efforts were
made. To make a fair comparison,
average consumptive use for the period prior to implementation of conservation
efforts should be compared to average consumptive use for the period following
implementation of conservation efforts.
In support of its approach, Natomas
argued that the proper baseline for measuring a consumptive use savings could
be the year of highest consumptive use.
Natomas reasoned that an entire water right is potentially transferable,
and the year of highest use is used to measure a water right for licensing
purposes. This argument does not take
into account the fundamental difference between determining the maximum amount
that Natomas may divert under its licenses, and measuring Natomas’s consumptive
use savings for purposes of a transfer pursuant to Water Code section
1725. For purposes of measuring the
extent to which Natomas’s conservation efforts have reduced its consumptive
use, a fair comparison must be made between Natomas’s water use prior to
undertaking conservation efforts, and its water use after having undertaken
conservation efforts. Measuring a
three-year high against an average does not result in an accurate measurement
of consumptive use savings.[8]
7.3 Natomas’s
Water Balance Does Not Demonstrate That Natomas’s Conservation Efforts Have
Reduced Its Comsumptive Use
Using Natomas’s consumptive use
figures. The difference between Natomas’s average consumptive use for the
period 1979 to 1985, and Natomas’s average consumptive use for the
period 1986 to 1998, is 7,456 ac-ft (96,619 - 89,163 = 7,456). (1983 was eliminated from this calculation
because it was a clear anomaly. In
1983, the Payment-In-Kind (PIK) program was implemented. Essentially, the program paid farmers not to
grow rice. Due to the program,
Natomas’s water use dropped dramatically in 1983.) The 7,456 acre-foot reduction is attributable to a corresponding
reduction in irrigated acreage, however, and, as discussed below, Natomas did
not claim to have reduced its irrigated acreage in order to conserve water.
Natomas’s average annual irrigated
acreage fell from 25,600 acres for the period 1979-85 (again, excluding 1983),
to 23,100 acres for the period 1986 to 1998; a reduction of 2,500 acres. In order to determine whether Natomas’s
reduction in consumptive use is attributable to the reduction in acreage, the
average consumptive use per irrigated acre was calculated for each period by
dividing the average annual consumptive use by the average annual number of
irrigated acres. The resulting average
consumptive use per acre for the period 1979-1985 (excluding 1983) was 3.77
ac-ft per acre. The average consumptive
use per acre for the period 1986-1998 was 3.85 ac-ft per acre.[9] This indicates that the reduction in
consumptive use between the two periods is attributable to a reduction in total
irrigated acreage. For example, 3.85
ac-ft per acre multiplied by 2,500, the number of acres that have been reduced
between the two periods, equals 9,625 ac-ft.
This figure is in excess of the drop in average consumptive use between
the two periods of 7,456 ac-ft.[10]
Any reduction in Natomas’s water
use attributable to a reduction in irrigated acreage, however, was not the
result of any conservation action undertaken by Natomas, and therefore cannot
be counted as part of Natomas’s consumptive use savings. Section 1011, subdivision (a) protects a
right to use water to the extent of a reduction in use “because of water
conservation efforts.” Section 1011,
subdivision (b) provides further that water conserved “as a result of water
conservation efforts” may be transferred.
The purpose of section 1011 is to encourage water users to conserve
water. Therefore, the SWRCB concludes
that a water user who claims to have conserved water must present some evidence
of a deliberate effort to save water.
In this case, Natomas has expressly
disavowed that it did anything to cause acres to be removed from production in
order to conserve water. In response to
the question whether Natomas had any program during the period between 1988 and
1998 that encouraged farmers to take land out of production, Natomas’s general
manager, Peter J. Hughes replied, “Absolutely not.” (T 204:21-25; 205:1-16.)
According to Natomas, whether to take land out of production is a
decision that is made by the farmers within its service area. (T 204:21-25; 205; 206:1-13.) The record contains no evidence concerning
the reason or reasons why the farmers themselves took land out of production.
Natomas has taken the position that
any activity that happens to reduce water use constitutes a “water conservation
effort,” irrespective of the water user’s intent. This interpretation is inconsistent with the plain language of
section 1011, as it effectively deletes the words “water conservation” from the
phrase “water conservation efforts.” In
addition, to reward those who reduce their water use for reasons other than
saving water would do nothing to further the purpose of section 1011, which is
to encourage water conservation.
Finally, as the State Water Contractors correctly noted, Natomas’s
interpretation would effectively repeal the forfeiture statute, Water Code
section 1241, as any reduction in water use would be considered conservation,
and therefore would be protected from forfeiture for nonuse.
In the context of a conserved water transfer, another reason why it is important that water conservation be deliberate is that it provides assurance that the effort will be made and the water conserved in the year of the transfer. If Natomas and its farmers have never deliberately reduced irrigated acreage in order to conserve water, and do not propose to do so in the year of the transfer, then there is no guarantee that any consumptive use savings in previous years that was attributable to a reduction in irrigated acreage will be realized in the year of the transfer. In summary, absent any evidence that land was taken out of production in order to save water, the SWRCB cannot find that any savings associated with a reduction in irrigated acreage constitutes conservation within the meaning of Water Code section 1011.[11] [12]
7.4
The 89,000 Acre-Feet Performance Standard
Natomas’s initial plans on a staff level do not adequately establish that the performance standard will be met. Natomas has not quantified the water savings associated with “intensifying” its current conservation efforts. Similarly, Natomas has not given adequate assurance that Mr. Barandas’s proposed price incentive program will have the intended result. This is a particular concern given that, throughout this proceeding, Natomas has consistently stressed that its shareholders, the farmers within its service area, are the ones who make the decisions regarding both the numbers of acres to farm, and the types of crops to grow. (T 204:21-25; 205; 206:1-13.)
Given that Natomas pledged to meet
a performance standard equivalent to its current average consumptive use, it appears
that Natomas has attempted to establish a historic consumptive use
savings. Another approach would have
been to identify the conservation efforts to be implemented in the year of the
transfer, and calculate the associated consumptive use savings. A savings due to crop shifts could have been
calculated by specifying what changes in the anticipated cropping pattern would
be made in order to save water. The
consumptive use savings associated with the changes would have been
transferable, provided that the cropping pattern against which the changes were
measured was consistent with historic patterns, and was not inflated in order
to exaggerate the savings. With the
exception of Natomas’s weed control program, however, it is difficult to
ascertain, based on the record in this proceeding, what conservation efforts
will be made in the year of the transfer, whether they will in fact be
implemented, or what the water savings associated with those efforts will be.
7.5 Analysis of
Natomas’s Conservation Efforts
In support of its water
balance, Natomas provided limited information on the specific conservation
efforts that it has undertaken in an attempt to reduce consumptive use. As stated earlier, Natomas has pledged to
continue these efforts in the year of the transfer. With the exception of its weed control efforts, however, Natomas
did not present sufficient evidence that its various conservation efforts have
reduced its consumptive use. The
information contained in the hearing record on Natomas’s various efforts is
examined below.
7.5.1
Recirculation System and Improved Water Management
During the mid-1980s, Natomas
implemented a number of water conservation measures. Perhaps the most significant measure was a recirculation
system. Natomas recaptures water it
accumulates in the southern part of its service area and pumps it back north,
approximately 20 miles, and releases it to flow south again. Natomas utilizes 84 pumps in 44 locations.
Natomas installed the recirculation
system in order to save water and reduce expenses. (Natomas Exhibit 5a, p. 3.)
Another reason for installing the recirculation system was complaints
about odors in the drinking water diverted from the Sacramento River. Those who complained surmised that the odors
were a result of agricultural chemicals in the tailwater being released by
Natomas. (Id. at p. 3.) Natomas may
also maintain the recirculation system in order to comply with water quality
requirements imposed by the Regional Water Quality Control Board. (T 206:19-25, 207:1-3.) Since completion of the recirculation system
in 1986, Natomas’s diversions from the river have decreased significantly. Its discharges back into the river have
decreased significantly as well.
(Natomas Exhibit 1a, Attachment 6.)
Natomas claimed that the recirculation system has also stabilized water
levels in ditches and canals, which allows Natomas to supply water to its
farmers on demand. Accordingly,
incidental losses to groundwater percolation and evapotranspiration may have
been reduced. (Natomas Exhibit 1a, at
pp. 12-13.)
Natomas has also made changes to
policies and water payment requirements.
Natomas adopted a policy in the mid-1980s that addressed excessive
spillage or dumping of water into the drains to avoid drain level fluctuations.
(Natomas Exhibit 6a, at p. 3.) In 1985,
Natomas adopted a policy of charging its shareholders per water order, in an
effort to reduce unnecessary water use.
(Natomas Exhibit 6a, at p. 3.)
Natomas has reduced its diversions
from the Sacramento River by recycling its tailwater, and the SWRCB commends
Natomas for its efforts. However,
Natomas did not demonstrate what reductions in consumptive use, if any, have
occurred as a result of its recirculation system or other improved water
management practices. In the words of
Natomas’s expert witness Marc Van Camp, “[I]t is difficult to quantify the
reductions in consumptive use that have occurred in Natomas as a result of
[Natomas’s] improved water management activities.” (Natomas Exhibit 1a, p. 12.)
In addition, Assistant Chief of the Division of Water Rights,
Gerald E. Johns, who testified at the hearing, questioned whether
implementation of a recirculation system or simply recycling tailwater would
lead to a reduction in consumptive use.
(T 246:13-20.)
7.5.2 Changing
Varieties of Rice and Other Crop Shifts
Natomas argued that a shift in rice
varieties from an older long stature variety to a newer short stature variety
has taken place which resulted in a reduction in consumptive water use. The long stature rice takes 165 days to
reach maturity, whereas the short stature variety takes 140 days to reach
maturity. On an annual basis, the shift
in varieties may save 0.3 ac-ft per acre. (Natomas Exhibit 1a, p. 11.) Based on the assumption that 5,000 to 10,000
acres were shifted from long to short stature rice, Natomas estimated a
consumptive use savings ranging from 1,500 to 3,000 ac‑ft. (Natomas Exhibit 1a, at p. 11; T 62:16-17.)
Natomas did not provide any
concrete evidence, however, in support of its assumption that 5,000 to 10,000
acres were converted from the old to the new variety of rice after 1979, the
year when section 1011 was enacted.
Natomas based its assumption on conversations with rice growers that
indicated that some unspecified amount of acres was planted with the old
variety in the mid‑1980s. (T
158:7-25; 159:1-4.) Mr. Van Camp
admitted that at least some farmers may have changed varieties in the early
1970s. (T 159:5-9.) Thus, while Natomas’s consumptive use may
have been reduced due to a shift in rice varieties, the SWRCB cannot quantify
what Natomas’s consumptive use savings might have been without firmer evidence
of the number of acres that were converted to the new variety of rice, and when
the conversion took place.
As for other types of crops grown
within Natomas’s service area, the data submitted by Natomas show that the
percentage of the total irrigated acreage that has been planted with each type
of crop has not changed significantly since 1979. (Natomas Exhibit 15 [California Irrigated Information Management
System data submitted on diskette].)
(The data submitted by Natomas do not distinguish between the different
varieties of rice, and therefore do not reflect any changes from the older to
the newer variety.)
Finally, as was the case with the
reduction in irrigated acreage, Natomas did not submit any evidence that any
past changes in rice varieties or other crops were part of a deliberate effort
to conserve water. Both Mr. Hughes and
Mr. Van Camp admitted that any past decision to switch to less water intensive
crops was made by the farmers, and was not encouraged by Natomas. (T 159:10-13; 167:6-11; 205:17-25;
206:1-13.) No evidence was submitted
concerning the farmers’ reason or reasons for changing crops.
7.5.3 Laser
Leveling of Fields
Over the last fifteen years,
the farmers within Natomas’s service area have undertaken extensive laser
leveling of their fields. Natomas
estimated that over ninety-percent of the rice acreage within the Natomas Basin
has been laser leveled during this time.
Laser leveling can reduce the amount of water required to irrigate a
field. (Natomas Exhibit 6a, at p. 4) Mr. Johns testified that laser leveling of
fields could also reduce consumptive use through improved distribution
uniformity. (T 313:16-25;
314:1-19.) According to Mr. Johns,
improved distribution uniformity can reduce deep groundwater percolation, which
can be a consumptive use savings “[d]epending on where you are in the state . .
. .” (T 313:16-20.) John Renning, a witness for the USBR
testified, however, that improved distribution uniformity can actually increase
consumptive use. (T 553:11-23.) Mr. Renning explained that improved
distribution uniformity can lead to a better crop that uses more water. (T 553:15-23.)
In summary, Natomas presented
evidence that laser-leveling fields can in theory reduce consumptive use, but
submitted insufficient evidence to determine whether and to what extent laser
leveling has created any consumptive use savings in this case.[14]
7.5.4 Canal Lining
and Bank Compaction
Since 1990, Natomas has concrete
lined 5,276 linear feet of its canals located in sandy soils to reduce
seepage. (Natomas Exhibit 6a, at p.
4.) When possible, Natomas has lined
canals in soil types where greater than normal losses occur. (Natomas Exhibit 5a, at p. 5.) Natomas provided no evidence, however,
concerning the amount of water that has been saved by these activities. (T 148:1-10.)
7.5.5 Reductions
in Deep Percolation
A number of the conservation
efforts identified by Natomas, including laser leveling of fields, and canal
lining and bank compaction, could reduce deep percolation past the plant root
zone and into the groundwater. A
reduction in irrigated acreage could also account for reductions in deep
percolation (T 131:13-25; 131:1-4), although Natomas has not identified a
reduction in irrigated acreage as one of its conservation efforts. Natomas took the position that any reduction
in deep percolation constituted a consumptive use savings. The record does not indicate, however, to
what extent, if any, deep percolation has been reduced. Moreover, any reduction in deep percolation
may have been offset by increased groundwater recharge from the Sacramento
River.
Mr. Van Camp testified that, based
on his review of groundwater elevations, the Sacramento River is a losing
stream in the reach of the Natomas Basin, meaning the river is recharging the
groundwater. (Natomas Exhibit 1a, at p.
8.) The groundwater gradient in the
Natomas Basin slopes away from the river towards a depression near McClellan
Air Force Base, which is useable groundwater.
Joseph C. Scalmanini, a witness for Natomas, concluded that when the
groundwater enters the subsurface after being applied for irrigation or otherwise
distributed within Natomas’s service area, the water deep percolates through an
unsaturated zone to the groundwater system and cannot re-enter the surface
system. (T 71:8-25.)
The record suggests that any
reduction in deep percolation due to Natomas’s conservation efforts has been
inappreciable. The groundwater
elevations have remained essentially constant throughout the Natomas area. (Natomas Exhibit 2a, at p. 4; T 129:4-8.) (One possible exception is the southeast
portion of Natomas, where there has been a recent decline in groundwater
elevations over the last 20 years, most likely influenced by the pumping
depression to the east. (T
69:11-18.)) Moreover, it is possible
that any reduction in deep percolation has been offset by increased seepage losses
from the Sacramento River. (T
130:13-25; 131:1-25; 131:1-11.) If this
were the case, any reduction in deep percolation does not result in a net
savings to the surface water system. In
summary, Natomas has not demonstrated a consumptive use savings in the form of
a reduction in deep percolation.
Therefore, the SWRCB need not address the question whether a reduction
in losses to a usable groundwater basin constitutes a savings in consumptive
use, as defined in Water Code section 1725.
7.5.6 Weed Control
To improve water management
and conserve water, Natomas commenced a weed control program in 1984. Natomas currently kills weeds by spraying
approximately 567,000 linear feet of canal banks and roadways. (Natomas Exhibit 6a, at p. 2.) Natomas estimated that approximately 665
acres of lands within its boundaries utilize weed control. Natomas assumed those weeds would otherwise
consume through evapotranspiration between 1-3 ac-ft per acre, which results in
a reduction in consumptive use of 665 to 1,995 ac-ft per year. (Natomas Exhibit 1a, at p. 12.) Mr. Van Camp testified that a report by the
Food and Agriculture Organization supports the higher number, 1,995 ac-ft. (T 163:11-15.)
Mr. Van Camp’s testimony was not
refuted and is sufficient to conclude that Natomas has reduced its consumptive
use by 1,995 ac-ft through weed control.
Provided that Natomas continues its weed control efforts in the year of
the transfer, this savings may be transferred pursuant to Water Code section
1725.
8.0 TIMING OF THE
TRANSFER
The transfer must be carried out in
a manner consistent with Natomas’s water rights. The amount of water diverted by Natomas and the amount of water
transferred cannot exceed the maximum amount that Natomas may divert under its
licenses. The transfer should also be
carried out after the savings have been realized, at a rate that is consistent
with the rate at which the water would have been consumptively used, but for
Natomas’s conservation efforts, and within Natomas’s diversion season. Otherwise, the transfer could result in a
change in Natomas’s consumptive use pattern, which could injure other legal
water users, or unreasonably affect fish, wildlife, or other instream
beneficial uses. For example, the
transfer of 1,995 ac-ft at the beginning of the diversion season, or the
transfer of the entire amount instantaneously, would constitute marked changes
from the consumptive use pattern that Natomas would follow in the absence of
the transfer.
The rate at which weeds would otherwise
consume the water to be transferred would be spread out over the course of the
season. Accordingly, the transfer
should be carried out during the course of Natomas’s diversion season between
March 1 and October 31, and at a rate that is consistent with the rate at which
the water would have been consumed by weeds.
The SWRCB recognizes that limiting
the transfer in this manner may render the transfer impractical. Moreover, given the amount of water
involved, it is unlikely that the instantaneous transfer of the entire 1,995
ac-ft would have a significant impact on the operations of the State Water
Project or the Central Valley Project, or unreasonably affect instream
beneficial uses. Therefore, with the
written consent of DWR and the USBR, Natomas may carry out the transfer at a
time and rate that deviate from the time when and the rate at which the savings
accrue, provided that the transfer is completed within one year from the date
of this order.
9.0 POLICY
IMPLICATIONS
Natomas and other parties to
this proceeding argued that approval of Natomas’s petition would create an
incentive to conserve water, and that denial of its petition would create an
incentive to use water inefficiently.
To the extent that the parties would have the SWRCB approve the transfer
without regard to the requirements of Water Code section 1725 or the no injury
rule, the parties would place a premium on water conservation beyond that
envisioned by the Legislature when it enacted Water Code section 1011. The purpose of section 1011 was to eliminate
a disincentive to conserve water that was created by the forfeiture doctrine,
not to reward those who conserve water at the expense of third party water
right holders or the environment.
It should also be noted that,
unlike transfers pursuant to section 1725, transfers pursuant to other
provisions of law are not limited to water that otherwise would be
consumptively used. (See, e.g.,
Wat. Code, §§ 1700-1705 [changes in point of diversion, place of use, or
purpose of use]; §§ 1735-1737 [long-term transfers]; §§ 1745-1745.11 [transfers
by water suppliers].) Of course, in
order to transfer water pursuant to another provision, it would still be
necessary to demonstrate compliance with the no injury rule and other applicable
requirements. Limiting a transfer to
water that otherwise would be consumptively used would help make that
demonstration, but doing so would not necessarily be required.
In addition, other incentives to
conserve water exist besides the prospect of a transfer. For instance, Natomas’s recirculation system
allows Natomas to reduce its diversions of fresh water from the Sacramento
River and so reduce the amount of polluted tailwater that returns to the river. (See Natomas Exhibit 5a, at p. 3.) The resulting benefits to water quality
likely assist Natomas in complying with water quality requirements. (T 206:19-25; 207:1-3.)
By conserving water under section
1011, a water user also can preserve the right to the water saved. If additional water is needed for uses
consistent with Natomas’s licensed rights, Natomas may increase its diversions,
up to an amount that includes the right that it has preserved by conserving
water, without obtaining SWRCB approval.
Finally, by reducing its diversions Natomas may reduce the amount it
must pay the USBR for water deliveries under its contract.
As for any disincentive to conserve
water, while Natomas’s conservation efforts may not have resulted in a
consumptive use savings that may be transferred pursuant to section 1725, it
bears emphasis that Natomas is not in a worse position than it would be in if
it had not conserved water. The SWRCB
has not adopted DWR’s position that water that has been conserved due to past
conservation efforts is not transferable pursuant to section 1725 because the
water would not be consumptively used in the absence of the transfer. This approach would create a disincentive to
conserve water in years prior to the year of a proposed temporary transfer
pursuant to section 1725, or to invest in a conservation effort that takes
more than a year to implement. The
SWRCB has avoided such a disincentive by recognizing that, under section 1011,
a reduction in use due to conservation efforts is deemed to be the equivalent
of reasonable, beneficial use.
Therefore, water that would have been consumptively used but for the
transferor’s conservation efforts may be transferred pursuant to section 1725.
10.0
NATOMAS’S TRANSFER IN 1995 TO THE MOJAVE WATER AGENCY
In support of its petition, Natomas
pointed out that the Division, acting pursuant to authority delegated by the
SWRCB, approved its 1995 petition to transfer conserved water to the
Mojave Water Agency. The previous
transfer involved the same conservation efforts identified in the present
petition. (Natomas Exhibit 1f, Order
Approving Temporary Changes, dated August 30, 1996, at p. 3.) Although the earlier transfer involved only
2,000 ac-ft, approximately the same amount approved by this order, the Division
found in its order that Natomas may have established a consumptive use savings
in excess of that amount. (Id. At p. 4.)
The Division’s previous order was
not adopted by the SWRCB at a public meeting, and therefore cannot be relied on
as a precedent. (SWRCB Order WR 96-1 at
p. 17, fn. 11; Gov. Code, § 11425.60, subd. (a).) It also merits note that Natomas’s previous
petition involved less water than the present petition, and, although the USBR
did submit comments on the earlier petition, no party objected to it. The SWRCB has reviewed the present petition
much more thoroughly, in light of the fact that parties have objected to the
present petition, an evidentiary hearing has been held, and a substantial
record has been developed.
11.0 THE TRANSFER WILL
NOT INJURE ANY LEGAL WATER USER OR UNREASONABLY AFFECT FISH, WILDLIFE, OR OTHER
INSTREAM BENEFICIAL USES
The transfer of 1,995 ac-ft, with
the conditions specified in this order, will not injure any legal user of the
water, or unreasonably affect fish, wildlife, or other instream beneficial
uses. As measured against Natomas’s
water use prior to implementing its weed control program, the transfer of 1,995
ac-ft will have no affect on the amount of water in the Sacramento River. DWR stated that the transfer should be
subject to the so-called Special Delta Term.
The Special Delta Term was developed in another water right proceeding
in order to protect DWR and the USBR, as operators of the State Water Project
and Central Valley Project, respectively, from injury due to changes in the
flow regime of the Sacramento–San Joaquin Delta. The Special Delta Term is unnecessary in this case, however,
because the transfer of Natomas’s consumptive use savings will not affect the
flow regime of either the Sacramento River or the Delta.
DWR also argued that the SWRCB
could not find that the transfer would not unreasonably affect fish, wildlife,
and other instream beneficial uses because Natomas had not adequately
identified the intended place and purpose of use. DWR’s concern appears to stem at least in part from Natomas’s
failure to identify a transferee in its original petition. By letter dated June 21, 1999,
however, Natomas confirmed that it proposes to deliver the water, using DWR’s
existing conveyance facilities, to Santa Margarita Water District for municipal
and industrial purposes of use within the District’s service area. The transfer will be conditioned
accordingly. The record contains no
evidence that the use of 1,995 ac-ft of water within the District’s service
area for the purposes specified will unreasonably affect fish, wildlife, or
other instream beneficial uses.
Finally, in order to ensure that
fish, wildlife, or other instream beneficial uses are not unreasonably affected
by the timing of the transfer, or the use of the Harvey O. Banks Pumping Plant,
the transfer will be conditioned on compliance with the California and federal
endangered species acts. The transfer
will also be conditioned on compliance with requirements designed to protect
beneficial uses in the Delta, including, but not limited to, the requirements
contained in SWRCB Decision 1485, SWRCB Order WR 98-9, and the SWRCB’s 1995
water quality control plan for the San Francisco Bay/Sacramento-San Joaquin
Delta Estuary.
12.0 CONVEYANCE
CAPACITY AND CARRIAGE LOSSES
DWR questioned whether there would
be sufficient capacity in DWR’s conveyance facilities to accommodate the
transfer. DWR’s witness, Larry Gage,
testified that, although he did not know for certain, he expected that sufficient
capacity would not be available from April 15 to November 15. (T 590:4-22.) DWR also questioned whether the use of DWR’s facilities to
effectuate the transfer could impact DWR’s compliance with the federal and
state endangered species acts.
The SWRCB is not required to make a
finding on the issue of available conveyance capacity prior to approving a
transfer. In addition, the record
contains little or no evidence that bears on the question of conveyance capacity
or the possibility of an impact to DWR’s ability to comply with endangered
species act requirements. These issues
are best resolved between DWR and Natomas in the form of a wheeling agreement
developed in accordance with Water Code sections 1810-1814. Presumably, a wheeling agreement would also
address reasonable carriage losses and the permissible timing of the
transfer. Accordingly, prior to
transferring water in accordance with this order, Natomas must enter into a
wheeling agreement with DWR and submit a copy of the agreement to the Chief of
the Division of Water Rights.
13.0 CONTRACTUAL
ISSUES
The USBR also raised several issues
concerning Natomas’s contractual obligations.
The USBR argued that, under the contract between the USBR and Natomas,
Natomas must obtain the USBR’s permission to transfer any water. This is a purely contractual issue, not a
question of state water rights law. As
such, this issue is best resolved between the USBR and Natomas, not by the
SWRCB.
The USBR also argued that the
proposed transfer would impair the USBR’s contractual right to Natomas’s return
flows. (See USBR Exhibit 1, at pp.
9-10.) Again, whether and to what
extent the transfer may be effectuated consistent with Natomas’s contract with
the USBR are issues that should be resolved between the USBR and Natomas.[15]
14.0 CONCLUSION
Natomas has conserved a
considerable amount of water since the mid-1980s. By reducing its diversions from the Sacramento River, Natomas has
benefited its shareholders, and it probably has benefited downstream water quality
as well. Not all of the water conserved
by Natomas, however, reflects a reduction in consumptive use, and therefore not
all of the water conserved may be transferred pursuant to Water Code section
1725.
Natomas’s water balance did not
demonstrate that Natomas’s conservation efforts have resulted in a consumptive
use savings. In addition, Natomas did
not quantify the savings associated with each of the conservation efforts that
it had identified, with the exception of its weed control program. As a result of its weed control program,
Natomas has reduced its consumptive use by 1,995 ac‑ft per year. Provided that Natomas continues to implement
this program in the year of the transfer, the right to use this amount of water
is transferable pursuant to Water Code section 1725. The transfer of Natomas’s consumptive use
savings will not injure any legal user of water, or unreasonably affect fish,
wildlife, or other instream beneficial uses.
The transfer is to be carried out
during Natomas’s season of diversion, at a rate that is consistent with the
rate at which Natomas’s water savings due to weed control accrue, unless DWR
and the USBR agree in writing to a deviation from these limitations. Prior to effectuating the transfer, Natomas
must enter into a wheeling agreement with DWR.
In order to ensure that the transfer is carried out in accordance with
this order, after the transfer is completed Natomas will be required to submit
a report to the Chief of the Division that describes the amount of water that
was transferred, the timing of the transfer, and the weed control program that
Natomas implemented during the year of the transfer.
ORDER
IT IS HEREBY ORDERED:
3110, 9794, and 9989 (applications
534, 1056, 1203, 1413, 15572, and 22309) is approved to the extent of 1,995
acre-feet. Natomas’s petition to
transfer the remaining amount is denied.
The transfer must be completed within one year of the date of this
order.
2.
For purposes of this transfer, Natomas’s licenses are changed
temporarily to include (1) the State Water Project’s Harvey O. Banks
Pumping Plant as a point of diversion, (2) municipal and industrial
purposes of use, and (3) the Santa Margarita Water District’s service area as
an authorized place of use.
3. The right to transfer water in accordance with this order is subject to Natomas’s continued implementation of its weed
control program, as that program is
described in this order.
4. The transfer shall be carried out between March 1 and October 31, at a rate that is consistent with the rate at which
Natomas’s savings due to weed
control accrue. With the written
consent of DWR and the USBR, Natomas may transfer the savings at a time and
rate that deviate from the time when and the rate at which the savings accrue,
provided that the transfer is completed within one year of the date of this
order.
5.
Prior to transferring the right to use water in accordance with this
order, Natomas shall enter into a wheeling agreement with DWR, and submit a
copy of the agreement to the Chief of the Division of Water Rights.
6.
Within 90 days of completing a transfer in accordance with this order,
Natomas shall submit a report to the Chief of the Division of Water
Rights. The report shall document the
amount of water that was transferred, and the timing of the transfer. The report shall also describe the weed
control program that Natomas implemented during the year of the transfer.
7.
Pursuant to Water Code sections 100 and 275 and the common law public
trust doctrine, the right to transfer water in accordance with this order is
subject to the continuing authority of the SWRCB to protect public trust uses
and prevent the waste, unreasonable use, unreasonable method of use, or
unreasonable method of diversion of water.
8
The right to transfer water in accordance with this order is conditioned
on compliance with requirements designed to protect beneficial uses in the
Delta, including, but not limited to, the requirements contained in SWRCB
Decision 1485, SWRCB Order WR 98-9, and the SWRCB’s 1995 water quality control
plan for the San Francisco Bay/Sacramento-San Joaquin Delta Estuary.
9.
This order does not authorize any act which results in the taking of a
threatened or endangered species or any act which is now prohibited, or becomes
prohibited in the future, under either the California Endangered Species Act
(Fish & Game Code, §§ 2050-2116) or the federal Endangered Species Act (16
U.S.C.A. §§ 1531-1544). If a “take”
will result from the transfer authorized by this order, Natomas shall obtain an
incidental take permit prior to carrying out the transfer.
CERTIFICATION
The undersigned, Administrative Assistant to the Board, does hereby certify that the foregoing is a full, true, and correct copy of an order duly and regularly adopted at a meeting of the State Water Resources Control Board held on December 15, 1999.
AYE:
NO:
ABSENT:
ABSTAIN:
Maureen
Marché
Administrative
Assistant to the Board
NOTE: Attachment No. 1 “Summary of Water Rights
Involved in Proposed Temporary Transfer” is not available electronically. For a copy contact: Pat Meroney at (916) 657-1868
[1] Most of Natomas’s licenses include these purposes of use, but only for use within the Sacramento International Airport. Accordingly, the transfer requires a change in Natomas’s licenses to allow for the use of water for municipal and industrial purposes within Santa Margarita Water District’s service area.
[2] In an ongoing proceeding, the SWRCB is addressing the issue of the obligations of existing water right holders in the Central Valley to bypass natural flows needed to meet water quality standards in the San Francisco Bay and Sacramento-San Joaquin Delta Estuary. The outcome of this proceeding could affect water availability under Natomas’s licensed rights.
[3] DWR questioned the constitutionality of section 1011 to the extent that it preserves the right to use conserved water indefinitely, and does not require conserved water to be reapplied eventually to beneficial use. A requirement that the right to use conserved water be exercised at some point cannot be read into section 1011. Pursuant to article III, section 3.5 of the California Constitution, the SWRCB has no authority to declare section 1011 to be unconstitutional, or to refuse to give the section full effect on that basis.
[4] The State Water Contractors have asked the SWRCB to take official notice of this report, along with several other documents, all of which were submitted as Exhibits A-E of the State Water Contractors. The SWRCB hereby takes official notice of Exhibits A-E. Official notice is taken pursuant to California Code of Regulations, title 23, section 648.2 (authorizing the SWRCB to take official notice of matters that may be judicially noticed), and pursuant to Evidence Code section 452 subdivision (c) (authorizing judicial notice of the official acts of the legislative, executive, and judicial branches of the State).
[5] A finding that instream beneficial uses will not be unreasonably affected may be required even when the applicable Water Code sections do not expressly state such a requirement. (See SWRCB Order WR 95-9 at p. 29.)
[6] Although SB 970 will not be effective until January 1, 2000, it merits note that the SWRCB’s disposition of Natomas’s petition would not be different if the SWRCB were to render this decision after SB 970’s effective date. SB 970 did not repeal section 1725, so the substantive requirements for a transfer pursuant to that section remain unchanged. SB 970 also amended section 1011, but only to add an elaboration on the definitions of “land fallowing” and “crop rotation.” SB 970 does contain a number of new procedural requirements, mainly concerning the notice to be given of a short-term transfer petition, and the opportunity to comment on such a petition. Those requirements likely would not apply to Natomas’s petition, however, consistent with the general rule that legislation operates prospectively, absent clear legislative intent to apply the legislation retroactively. (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1207-1209 [753 P.2d 585, 596-598, 246 Cal. Rptr. 629, 639-642].)
[7] Natomas subtracted 800 ac-ft from 15,328 ac-ft to account for the fact that its current consumptive use might be reduced due to urbanization, and an additional 528 ac-ft so that the proposed transfer would not exceed its water rights. (T 59:3-25; 60:1-5.)
Although the increase in Natomas’s proposed transfer amount is unimportant in light of our decision in this case, we note that the approval of a transfer involving more than 8,860 acre-feet would raise significant due process concerns. The SWRCB hearing notice in this proceeding stated that Natomas proposed to transfer the right to use 8,860 acre-feet of water. Some parties may have opted not to participate in this proceeding because it involved a transfer of 8,860, not 14,000.
[8] In addition, although an entire water right is potentially transferable, it might not be possible to divert the maximum amount that may be diverted under the right, depending on the hydrologic conditions in the year of the transfer.
[9] This slight increase in consumptive use per acre is not significant. (SWRCB Staff Exhibit A, July 22, 1999 Memorandum from Gerald A. Johns, Assistant Division Chief, to Harry M. Schueller, Division Chief, at p. 3; Figures 1 & 2.)
[10] In support of its water balance, Natomas submitted an analysis of evapotranspiration of applied water (ETAW). ETAW is a way of measuring the applied water needs of crops. Natomas claimed that the majority of the consumptive use savings shown by its water balance was due to reductions in ETAW. As might be expected, however, the reduction in ETAW is attributable to the reduction in irrigated acreage.
Natomas estimated what its ETAW would be in 1999, and compared this figure to the average of the three years with the highest ETAW values (1979, 1981, and 1984). The result is an apparent reduction in ETAW of 6,100 acre‑feet. (Natomas Exhibit 14, Attachment 12.) The corresponding reduction in acreage between the average of the three high years and 1999 was 2,184 acres. The average ETAW per acre for the three highest years was 2.85 acre-feet. This indicates that the apparent savings of 6,100 acre-feet is attributable to a reduction in acreage. (2,184 x 2.85 = 6,224.4.)
[11] An additional problem with considering Natomas to have conserved water by reducing irrigated acreage is that, over the long-term, Natomas’s irrigated acreage has not changed. (SWRCB Staff Exhibit A, Figure 9 [graph viewed comparing average irrigated acreage for the period 1965-1982 to average irrigated acreage for the period 1983-1998].)
[12] In light of the SWRCB’s finding that Natomas’s water balance does not demonstrate that Natomas’s conservation efforts have reduced its consumptive use, the SWRCB need not address the USBR’s criticism of some of the assumptions underlying the water balance.
[13] The State Water Contractors expressed a similar concern with regard to Natomas’s comparison of pre- and post-conservation averages. The State Water Contractors pointed out that the difference between averages might not reflect the savings to be realized in the year of the transfer if the transferor’s consumptive use in the year of the transfer is greater than average.
[14] Like reduced acreage and crop shifts, laser leveling was undertaken by the farmers, not Natomas, and Natomas presented no evidence that the fields were laser leveled as part of a deliberate effort to conserve water.
[15] Of course, the question of the USBR’s rights under the contract is distinct from the question of the USBR’s right, as another legal water user, to be protected under state law from injury due to the transfer.