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Temperance Flat Reservoir Update

Supporters of Temperance Flat Reservoir have published a new video promoting this water storage project on the San Joaquin River. In August 2017, the San Joaquin Valley Water Infrastructure Authority filed an application with the California Department of Water Resources (DWR) for $1.3 billion in funding from Proposition 1. DWR is expected to issue a decision in the second quarter of 2018 regarding which water storage projects will receive funding. In the meantime, the video offers a summary of, and advocacy for, the project.

Note: The author of this blog has no opinion on Temperance Flat Reservoir.

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Mutual Water Companies in the California Legislature 2016

I am happy to report that the California Legislature did no harm to mutual water companies in 2016. Given the past few sessions, that should be considered a positive outcome.

The only bill specifically naming mutual water companies that was passed by the Legislature, Senate Bill 1328, was vetoed by Governor Brown on September 24, 2016. That bill would have allowed the State Water Resources Control Board (SWRCB) to provide grants from the Greenhouse Gas Reduction Fund to implement drinking water, wastewater, water reuse and stormwater projects that were intended to decrease demand for fossil fuels needed to pump, transport and treat water. Named beneficiaries were public agencies, nonprofit organizations, public utilities and mutual water companies. It was good that mutuals and public utilities would have qualified for grant funding along with public agencies, and that the Legislature recognized the important role private water companies play in delivering water and wastewater services in California.

Governor Brown’s veto statement referenced a desire to prevent duplicative programs. He directed the Resources Agency to work with the SWRCB to include stormwater projects in the Urban Greening Program. Since SB 1328 was unlikely to provide a significant source of funds for private water companies, the veto can be considered neutral in its effect.

The Legislature did pass a number of bills which will affect the water supplies used by mutual water companies, but since those bills will impact all water organizations and users, I will address them in future posts.

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GAO Report Finds USEPA Violated Law in Promoting Clean Water Rule

The U.S. Government Accountability Office released a report today finding that two social media campaigns operated by the U.S. Environmental Protection Agency violated federal laws against publicity, propaganda and grassroots lobbying by the agency. The violations occurred as part of USEPA’s efforts to adopt the Clean Water Rule defining the scope of “waters of the United States” under the federal Clean Water Act.

For a more detailed analysis of the report, you can see my article contained in the December 2015 issue of Global Water Intelligence, which will be published later this week.

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TWDB Opens New Round of SWIFT Financing

The Texas Water Development Board has opened the application period for the next round of SWIFT financing. The application period started yesterday, December 1, 2015, and will remain open through February 5, 2016. The application webpage can be found here.

In the first round of SWIFT financing in 2015, the Board provided funds to just over $1 billion in water projects in Texas, with future commitments for an additional $2.9 billion. The geographic distribution of funds can be seen in the charts below. As is apparent, North Texas was the recipient of the largest share of 2015 funds, while the Houston area was the largest recipient of future commitments and overall funding. The two largest projects were:

2015 Funding v2

Future Funding v2

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Arizona Supreme Court Clarifies Water Transfer Rules

The Arizona Supreme Court has issued an important decision regarding water transfers and who may participate as an “interested party” in administrative proceedings before the Arizona Department of Water Resources (ADWR). The decision was issued on November 12, 2015 in the case of Arizona Department of Water Resources v. McClennen, No. CV-15-0223-SA, which is a dispute between Freeport Minerals Corporation and officials within Mohave County over water on Planet Ranch. That ranch has been the subject of multiple water transfer proposals since the 1980s, and for a time was owned by the City of Scottsdale for that purpose, before it was sold to Freeport in 2008.

In 2010, Freeport filed applications with ADWR to transfer surface water rights that had historically been used on Planet Ranch in Mohave County for use at the Bagdad Mining Complex in Yavapai County, which is adjacent to Mohave County on the east. A portion of the water rights would also be used within Mohave County to support the Lower Colorado River Multi-Species Conservation Program. Mohave County filed objections with ADWR, alleging that the transfer might negatively affect residents of the County and would be against the public interest.

ADWR rejected the County’s objections, concluding that Mohave County had no standing to participate in the proceeding since it did not hold any water rights or other interest that is protected under the water transfers statute, found in Arizona Revised Statutes § 45-172. The County appealed that ruling, which led to last week’s decision by the Supreme Court.

The court held that § 45-172 allows ADWR to consider a limited set of factors when determining whether to approve a transfer of surface water rights. The statute requires that the water rights proposed for transfer “shall have been lawfully perfected … and shall not have thereafter been forfeited or abandoned,” and “vested or existing rights to the use of water shall not be affected, infringed upon, nor interfered with” by the transfer. Mohave County did not allege any violation of those standards by the proposed transfer from Planet Ranch, and did not hold any vested water rights itself. Therefore, the court held that the County had not raised any arguments that needed to be considered by ADWR, and the agency did not need to allow the County to participate in the proceeding.

Mohave County argued that a water transfer should be subject to a discretionary public interest test, like that imposed on new appropriations of water. Arizona Revised Statutes § 45-153 allows ADWR to reject a proposed appropriation if the use would be “against the interests and welfare of the public.” The Supreme Court held, however, that the public interest test only applies to new appropriations of water and not to water transfers, since that language appears nowhere in § 45-172. That is consistent with the concept that water rights, once formed, are property rights that can be used or transferred by the owner without ongoing oversight from ADWR, as long as the use does not infringe on the rights of other water users.

The Supreme Court used the factors to be considered by ADWR as the basis for interpreting who may be an “interested person” that can file objections against a water transfer. The term is not defined in the statute, so the court looked to the purpose of objections. The court held that in this context, the phrase “interested person” should mean a person who has an interest protected by § 45-172, i.e., an owner of a vested water right that could be affected by the transfer. Since the County did not fall within that definition, the court ruled that the County had no standing to file an objection, and ADWR was correct in rejecting its participation.

In essence, Mojave County objected to the Planet Ranch water transfer based on the general interest of its citizens, rather than any special interest in the water rights at issue. Water in Arizona is owned and allocated by the state through ADWR, and the Supreme Court denied the attempt by Mohave County to insert itself into that process without a demonstrable interest in water rights. The decision is favorable for water rights holders, since it rejected the argument that ADWR should apply a public interest test to all water transfers. Instead, the Supreme Court affirmed that once an initial appropriation has been made, the resulting water rights constitute legal entitlements that can be freely used and transferred by the owner, in the absence of concrete harm to other water users.

Of course, whether opposing the water transfer would actually be in the interest of Mojave County citizens is debatable, but the political process resulted in County elected officials determining that they should object to the transfer. The Supreme Court’s decision represents a victory of water law over politics, at least temporarily in this matter. Water management often comes down to popular opinions and politics in its most base form, so it is refreshing to see a court applying the law objectively, rather than trying to divine the political currents.