[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]




 OVERSIGHT HEARING ON THE CALFED PROGRAM AND CALIFORNIA CENTRAL VALLEY 
                        PROJECT (CVP) OPERATIONS

=======================================================================

                           OVERSIGHT HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                     MARCH 30, 2000, WASHINGTON, DC

                               __________

                           Serial No. 106-88

                               __________

           Printed for the use of the Committee on Resources


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
       Committee address: http://www.resourcescommittee.house.gov

                                 ______

                   U.S. GOVERNMENT PRINTING OFFICE
67-477                     WASHINGTON : 2001


                         COMMITTEE ON RESOURCES

                      DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana       GEORGE MILLER, California
JAMES V. HANSEN, Utah                NICK J. RAHALL II, West Virginia
JIM SAXTON, New Jersey               BRUCE F. VENTO, Minnesota
ELTON GALLEGLY, California           DALE E. KILDEE, Michigan
JOHN J. DUNCAN, Jr., Tennessee       PETER A. DeFAZIO, Oregon
JOEL HEFLEY, Colorado                ENI F.H. FALEOMAVAEGA, American 
JOHN T. DOOLITTLE, California            Samoa
WAYNE T. GILCHREST, Maryland         NEIL ABERCROMBIE, Hawaii
KEN CALVERT, California              SOLOMON P. ORTIZ, Texas
RICHARD W. POMBO, California         OWEN B. PICKETT, Virginia
BARBARA CUBIN, Wyoming               FRANK PALLONE, Jr., New Jersey
HELEN CHENOWETH-HAGE, Idaho          CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California     CARLOS A. ROMERO-BARCELO, Puerto 
WALTER B. JONES, Jr., North              Rico
    Carolina                         ROBERT A. UNDERWOOD, Guam
WILLIAM M. (MAC) THORNBERRY, Texas   PATRICK J. KENNEDY, Rhode Island
CHRIS CANNON, Utah                   ADAM SMITH, Washington
KEVIN BRADY, Texas                   CHRIS JOHN, Louisiana
JOHN PETERSON, Pennsylvania          DONNA MC CHRISTENSEN, Virgin 
RICK HILL, Montana                       Islands
BOB SCHAFFER, Colorado               RON KIND, Wisconsin
JIM GIBBONS, Nevada                  JAY INSLEE, Washington
MARK E. SOUDER, Indiana              GRACE F. NAPOLITANO, California
GREG WALDEN, Oregon                  TOM UDALL, New Mexico
DON SHERWOOD, Pennsylvania           MARK UDALL, Colorado
ROBIN HAYES, North Carolina          JOSEPH CROWLEY, New York
MIKE SIMPSON, Idaho                  RUSH D. HOLT, New Jersey
THOMAS G. TANCREDO, Colorado

                     Lloyd A. Jones, Chief of Staff
                   Elizabeth Megginson, Chief Counsel
              Christine Kennedy, Chief Clerk/Administrator
                John Lawrence, Democratic Staff Director
                                 ------                                

               Subcommittee on Water and Power Resources

                JOHN T. DOOLITTLE, California, Chairman
KEN CALVERT, California              CALVIN M. DOOLEY, California
RICHARD W. POMBO, California         GEORGE MILLER, California
HELEN CHENOWETH-HAGE, Idaho          PETER A. DeFAZIO, Oregon
GEORGE P. RADANOVICH, California     OWEN B. PICKETT, Virginia
WILLIAM M. (MAC) THORNBERRY, Texas   ADAM SMITH, Washington
GREG WALDEN, Oregon                  DONNA MC CHRISTENSEN, Virgin 
MIKE SIMPSON, Idaho                      Islands
                                     GRACE F. NAPOLITANO, California
                  Robert Faber, Staff Director/Counsel
                   Joshua Johnson, Professional Staff
                      Steve Lanich, Minority Staff


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held March 30, 2000......................................     1

Statement of Members:
    Condit, Hon. Gary A., a Representative in Congress from the 
      State of California........................................    72
    Dooley, Hon. Calvin M., a Representative in Congress from the 
      State of California........................................     3
    Doolittle, Hon. John T., a Representative in Congress from 
      the State of California....................................     1
    Herger, Hon. Wally, a Representative in Congress from the 
      State of California........................................    68
        Prepared Statement of....................................    69
    Ose, Hon. Doug, a Representative in Congress from the State 
      of California..............................................    73

Statement of Witnesses:
    Bamert, Edward ``Tom'', Chairman, Regional Council of Rural 
      Counties (RCRC), Jackson, California.......................    18
        Prepared Statement of....................................    21
    Bishop, Wally, General Manager, Contra Costa Water District, 
      Concord, California........................................   137
        Prepared Statement of....................................   140
    Bradley, Justin, Interim Environmental Director, Silicon 
      Valley Manufacturing Group, San Jose, California...........   133
        Prepared Statement of....................................   135
    Davis, Grant, Executive Director, The Bay Institute, San 
      Rafael, California.........................................   153
        Prepared Statement of....................................   155
    Hannigan, Tom, Director, California Department of Water 
      Resources..................................................    43
        Prepared Statement of....................................    45
    Hayes, David, Deputy Secretary, Department of the Interior, 
      Washington, DC.............................................    74
        Prepared Statement of....................................    76
    Moss, Richard M., General Manager, Friant Water Users 
      Authority, Lindsay, California.............................     4
        Prepared Statement of....................................     7
    Nomellini, Dante John, Manager and Co-Counsel, Central Delta 
      Water Agency, Stockton, California.........................    82
        Prepared Statement of....................................    84
    Southwick, Brenda, Associate Counsel, California Farm Bureau 
      Federation, Sacramento, California.........................   102
        Prepared Statement of....................................   104
    Sprague, Stan, General Manager, Orange County Municipal Water 
      District, Fountain Valley, California......................    29
        Prepared Statement of....................................    31
    Tenney, O.L. "Van", General Manager, Glenn-Colusa Irrigation 
      District, Willows, California..............................   122
        Prepared Staement of.....................................   124
    Yardas, David, Senior Scientist, Environmental Defense Fund, 
      Oakland, California........................................    92
        Prepared Statement of....................................    94
    Wilson, Larry, Board of Directors, Santa Clara Valley Water 
      District, San Jose, California.............................   128
        Prepared Statement of....................................   130

 
 OVERSIGHT HEARING ON THE CALFED PROGRAM AND CALIFORNIA CENTRAL VALLEY 
                        PROJECT (CVP) OPERATIONS

                              ----------                                
  


                        THURSDAY, MARCH 30, 2000

                  House of Representatives,
                   Subcommittee on Water and Power,
                                    Committee on Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:06 a.m., in 
room 1334, Longworth House Office Building, Hon. John T. 
Doolittle (chairman of the subcommittee) presiding.
    Mr. Doolittle. The Subcommittee on Water and Power will 
come to order. We are meeting today to hear testimony on the 
CALFED program and the California Central Valley Project 
Operations.
    I know most of our members are familiar with this rule, but 
I just want to reiterate it today that the oral opening 
statements are limited to the chairman and the ranking minority 
member, and this is for the purpose of hearing all the 
testimony and allowing everybody to meet their travel schedules 
at the end of the day. All members' statements will certainly 
be included in full in the written record.
    Let me ask unanimous consent--I have extended an invitation 
today to all of the members representing the Central Valley to 
join us here on the dais--and I see none of them at present, 
but I do believe they will be here. Is there objection to that 
request?
    [No response.]
    Mr. Doolittle. Seeing none, that will be granted.

   STATEMENT OF HON. JOHN T. DOOLITTLE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Doolittle. Water, obviously, is vital for all of 
California, and over the last 5 years we have held a variety of 
hearings in the management of Central Valley Water. This 
hearing today on CALFED and CVP Operations continues the debate 
on how Congress will address these important issues.
    As many of you are aware, since the 1996 authorization for 
CALFED, the Subcommittee on Water and Power has asked for 
specific information regarding the CALFED budget, ecosystem 
standards and criteria and how the future water supply needs of 
California will be met.
    I expect, today, to hear from a diverse group of water 
users in California who will provide their insight on, one, the 
accuracy and comprehensiveness of the cross-cut budget prepared 
by the Department of the Interior and the State of California. 
One of those charts facing the audience displays that, and the 
members will shortly have their own copy; two, how effective 
the CALFED program has been; three, what modifications to the 
CALFED authorization are necessary to support an extension; 
and, four, what steps should be undertaken to improve the 
reliability and water quality of CVP water deliveries.
    Today, I will address four areas of specific interest to 
this subcommittee:
    One, CALFED financing. First, we need to ensure that CALFED 
funding is spent responsibly. As many of you are aware, the 
Federal CALFED funding experiment has allowed hundreds of 
millions of dollars in appropriations without the Congress 
knowing how the money would be spent. We were continually told 
that CALFED could handle such funds, even though it was a 
startup operation.
    The current picture is of a program unable to manage the 
money provided. Of the $430-million authorization, $210 million 
has been appropriated. And as of the Department's last report, 
the expenditures from that appropriation of $210 million are a 
mere $35 million. Specific goals for those expenditures remain 
lacking, and a clear, transparent crosscut budgeting system has 
yet to be developed. The subcommittee is concerned that the 
Federal agencies involved in the CALFED program are not 
coordinating the myriad of activities going on in the 
watersheds under restoration.
    Two, getting better together. Under the Bay-Delta Accord, 
there was a general understanding that the time had come to 
improve the environment, establish reliable water supplies and 
improve water quality. However, since that time, water users 
have actually lost 300,000 acre-feet of water from the system. 
Water quality remains a concern based on the operation of the 
system. And while a great deal of money has been appropriated 
for environmental restoration, we lack the kind of good science 
and coordinated operation which should be a foundation for this 
effort.
    Three, augmentation of our current water supply. Our 
existing water management systems can no longer provide a 
sufficient reliable water supply to meet the needs of both the 
environment and of our current water users. How can we support 
a thriving business community, a growing urban population and 
an agricultural economy worth billions of dollars if we can't 
even meet our current needs? Over the last 3 years, we have had 
to curtail water use in several parts of the State not because 
of a shortage of water, but because of a lack of ability to 
restore water. We are in, currently, our sixth wet year in 
California, and it appears that nobody, on either the Federal 
or State level, is willing to address what will happen during 
the first year of a drought. If we can't make contracted 
deliveries to water users in wet years, I can't imagine what 
will happen in times of merely an average water year or, 
indeed, of a drought.
    Four, regulatory certainty. The Congress and the American 
public are watching the CALFED experiment to determine if the 
CVPIA, ESA and Clean Water Act can be carried out in a way that 
does not play brinkmanship with the water that people need each 
day for drinking, for industry and for agriculture. If those 
laws can't be made to work in this case, they can't work 
anywhere. While it is fine to discuss the need for future water 
projects, there are short-term reforms necessary to sustain 
ecosystem restoration, as well as water development.
    One, there is broad administrative discretion in meeting 
environmental laws. We have seen this discretion exercised in 
ways that have minimal or no benefit on the environment and 
significant negative impacts on water users. Discretion must be 
exercised to increase contract water supplies up to the 
contract amount.
    Two, administrative discretion should be exercised to 
minimize the adverse economic consequences of enforcing the 
CVPIA, ESA and the Clean Water Act.
    Three, the Government needs to make sure that only existing 
peer-reviewed science is used as a basis for administrative 
decisions.
    Four, a commitment must be made that there will be no 
additional loss of water deliveries. Any new water for 
environmental purposes must be provided by the agencies as a 
public benefit paid for by the public.
    Five, if an Environmental Water Account is identified, it 
should be used in lieu of rather than in addition to current 
curtailments of water supplies.
    And, six, the Federal Government should immediately work 
with the State of California to develop a plan for more 
flexible operations that will improve water quality and supply.
    I look forward to hearing the testimony and discussing the 
future of California's water management with the witnesses. And 
I will recognize our ranking member, Mr. Dooley, for his 
opening statement.

    STATEMENT OF HON. CALVIN M. DOOLEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Dooley. Mr. Chairman, I want to thank you for holding 
this hearing today to review the status of the CALFED process 
and the implementation of the CVPIA Act. These two efforts are 
closely interwoven and both will have a profound impact on the 
future of California. I would also like to thank our witnesses 
today for their participation in this important hearing.
    Obviously, my constituents have been deeply impacted by the 
CVPIA and have been active participants in the CALFED process 
because they recognize that resolving the environmental 
problems associated with water project development is a key to 
restoring and ensuring an adequate and reliable water supply 
for the future. They are anxiously awaiting the completion of 
the CALFED report. The prescription for meeting California's 
long-term water needs must balance the interests of municipal, 
industrial, agricultural and environmental stakeholders.
    Any solution will require significantly more water storage 
than what is currently available. A collaborative process, such 
as CALFED, remains the most effective mechanism for developing 
a long-term solution that addresses California's water supply 
and water quality needs while simultaneously protecting and 
restoring the State's unique ecosystems.
    From my perspective, a well-functioning process is a 
balanced one that produces tangible benefits for all 
participating stakeholders. It is clear to me, as I hope it is 
to all of those involved, that this process will not succeed if 
major concerns of key stakeholders remain unaddressed. It is 
also important that we recognize that all policy decisions 
affecting California's water supply have an impact on our 
ability to devise a long-term solution.
    I have been impressed and encouraged by the cooperative 
spirit displayed by the stakeholders with respect to the 
appropriations request. I also greatly appreciate remarks and 
recent intense efforts by Secretary Babbitt which demonstrate 
his continued commitment to a balanced process that addresses 
water supply and quality concerns.
    I look forward to the continued leadership from Secretary 
Babbitt, Secretary Nichols, Governor Davis, the stakeholders 
and the members of this committee as we move together toward a 
balanced, long-lasting response to California's water supply 
and water quality needs.
    Mr. Doolittle. I note that Mr. Condit has joined us, one of 
the very key representatives in the Central Valley who has been 
invited to sit up here. I have always thought you belonged on 
this side of the aisle Gary.
    [Laughter.]
    Mr. Doolittle. Let me call up our first panel out of three 
and invite them to come forward and remain standing. Would you 
please raise your right hands.
    [Witnesses sworn.]
    Mr. Doolittle. Thank you. Let the record reflect each 
answered affirmatively. And, gentlemen, please be seated. We 
are very pleased to have you here.
    We will begin today. I think you are all familiar with the 
5-minute rule, and those lights are provided as a guide. You 
don't have to cutoff in midsentence, but we do have three 
panels, and there is some major testimony and questions to be 
asked, so we are a little bit under the constraint of time. 
Plus, we will have, I might just announce, in approximately 15 
minutes or so, we will have a vote, and then the rest of the 
votes I guess will be rolled until 12:30 or so. So, hopefully, 
we can conduct our business pretty well uninterrupted except 
for those two occasions.
    Our first witness will be Mr. Richard M. Moss, who is the 
general manager of the Friant Water Users Authority. Mr. Moss?

  STATEMENT OF RICHARD M. MOSS, GENERAL MANAGER, FRIANT WATER 
              USERS AUTHORITY, LINDSAY, CALIFORNIA

    Mr. Moss. Thank you very much, Mr. Chairman.
    The Friant Water Users Authority consists of 25 member 
agencies that all receive water from the Friant Division of the 
Central Valley Project. The Friant Division diverts from the 
San Joaquin River northeast of Fresno. Our members annually 
deliver about a million-and-a-half acre-feet to some one 
million acres of farmland and some of the most productive 
farmland in the world generating approximately $4 billion in 
agricultural production at the farm gate each year.
    The Friant Division directly diverts water from the San 
Joaquin River, which is otherwise tributary to the Delta. We 
also indirectly are dependent upon export pumping of the 
Central Valley Project from the Delta to meet prior water 
rights obligations that allow us to divert the water at Friant 
Dam. This otherwise is known as the exchange supply. Thus, we 
have great interest in any actions that may affect our ability 
to divert water from the San Joaquin River or that may affect 
our ability to have the Central Valley Project provide that 
exchange supply.
    I should also note that we are working very hard with 
environmental interests and others pursuing restoration of the 
upper main stem of the San Joaquin River from Friant Dam to its 
confluence with the Merced, a project which I believe will have 
significant implications in the future for CALFED. It is, thus, 
for these reasons that my agency and my constituency is 
extremely interested in CALFED and seeing CALFED be a success.
    We, like the committee, are all ears, waiting for Governor 
Davis and Secretary of Interior Babbitt's negotiations to 
culminate and to provide us with their decisions. Given that 
these are closed-door negotiations, all we can do is provide 
the negotiators with a very clear understanding of what we 
believe must be in the final solution. And with this 
committee's help, maybe they will be able to hear our message.
    Let me now focus briefly on three aspects of the CALFED 
situation, the CALFED solution that we believe must be there at 
the end of the day:
    No. 1, and, Mr. Chairman, you mentioned it already, is 
regulatory certainty. We need that now. We don't need that 
years from now. We have witnessed a steady diminishment over 
the past several years of the ability of the State Water 
Project and the Central Valley Project to deliver good quality 
water from the Delta. Virtually all of this has been as a 
result of regulatory actions under the CVPIA or the Endangered 
Species Act. We now hear that more cuts are in the offing, and 
this situation is clearly untenable. There has to be some 
stability from which we and CALFED can build. Without a 
foundation of stability, CALFED will fail. CALFED simply cannot 
build new water supply as fast as they have the ability to take 
it away.
    Let me give you a sense of the magnitude of the problem. We 
could spend three-quarters of a billion dollars on raising 
Friant Dam and maybe generate 150,000 acre-feet of new yield, 
clearly a project that I am in support of. But last year, 
because of the Delta smelt, we saw reductions in Delta export 
pumping and the creation of a 350,000 acre foot hole in San 
Louis reservoir clearly putting San Joaquin Valley agriculture 
at risk, including the Santa Clara Valley and the industry that 
they support as well, from a water quality standpoint.
    Now, we are faced with the potential of Trinity River 
impacts of some 250,000 acre-feet or more, and we hear earlier 
this week that the Fish and Wildlife Service is looking for 
another 400,000 acre-feet of water before they can provide us 
some base of regulatory certainty. CALFED can't meet these new 
demands, much less return the water that was lent to stabilize 
endangered species, supposedly, under the 1994 Bay-Delta 
Accord.
    No. 2 on my list is the need for more storage, in 
particular more surface storage. We need more storage north of 
the Delta, in or adjacent to the Delta, south of the Delta and 
on the San Joaquin River. This new storage must be real. We are 
not interested in storage way off in the future or a list of 
storage sites that is nothing more than a list of things that 
we are going to have to fight over in the future. We are 
particularly interested in seeing new storage on the San 
Joaquin River system that we would hope would generate new 
yield, for Upper San Joaquin River restoration, for new 
freshwater flows into the Delta, for South Delta water quality, 
export water quality, flood control and hopefully to offset our 
chronic groundwater overdraft in the San Joaquin Valley that is 
in excess of a million acre-feet a year.
    Lastly, I want to bring to your attention the fledgling 
restoration effort on the Upper San Joaquin River. CALFED and 
the State and Federal agencies have been very supportive of our 
efforts to date, and for that we are very grateful. They 
provided us $2.5 million last year on very short notice for a 
pilot project that allowed summertime flows on the San Joaquin 
River for riparian habitat. This project facilitated the 
gathering of some very important data and more importantly it 
brought some disparate interests together that had not been 
working together for a long time and actually had been fighting 
and litigating.
    We are now embarking on, in cooperation with our new 
environmental friends, on some studies that will look at what 
it is going to take to restore the river and where that water 
will come from. And we are going to need CALFED's continued 
support and the CALFED agencies' support from a technical and 
financial basis. We ultimately will need to integrate this 
effort in with the CALFED solution to make sure it works for 
everyone on the long term.
    Thank you for your attention. I would be pleased to answer 
any questions.
    [The prepared statement of Mr. Moss follows:]

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    Mr. Doolittle. Thank you. Our next witness will be Mr. Tom 
Bamert, who I am pleased to note is a constituent of mine and 
serves as the chairman of the Regional Council of Rural 
Counties.
    Mr. Bamert?

STATEMENT OF EDWARD ``TOM'' BAMERT, CHAIRMAN, REGIONAL COUNCIL 
         OF RURAL COUNTIES [RCRC], JACKSON, CALIFORNIA

    Mr. Bamert. Thank you, Mr. Chairman and members of the 
subcommittee. I want to thank you for the opportunity to 
provide testimony on behalf of the Regional Council of Rural 
Counties to the subcommittee regarding CALFED.
    As you said, I am Supervisor Tom Bamert, chairman of the 
Regional Council of Rural Counties. We are an organization of 
28 rural Northern California counties. Our membership 
encompasses a broad geographic area, which includes all or 
portions of Congressmen Doolittle, Radanovich, Herger, Pombo, 
Ose, Farr, Condit, Lewis and Thompson's districts. It is from 
our membership area that over 80 percent of the water for the 
Delta comes.
    RCRC has participated in the CALFED Bay-Delta Program since 
early 1996. The CALFED program, when initiated, promised to 
balance this program within objectives for ecosystem 
restoration, water supply reliability, water quality and levee 
system integrity. Based upon our review of the CALFED 
programmatic draft EIS and EIR, RCRC no longer believes that 
the CALFED program can be expected to deliver a workable 
solution for any of those objectives which has any expectation 
of a success.
    Our concerns focus on a domination of the process by the 
Federal Government to the detriment of the State of California 
and its local Governments and people. For example, CALFED 
identifies a number of programs which will adversely affect the 
land and the people of the CALFED solution area.
    This strategy calls for implementation actions which will 
purchase up to 100,000 acre-feet of PG&E reservoir reoperation 
water. This water, in many cases, was proposed to be used by 
our member counties for their own water supplies and not for 
export to the Delta and beyond. In the upland areas, as you 
know, without this reoperation water, and in the absence of new 
on-stream storage, there is no viable water supply for many of 
the people in Mr. Doolittle's, Mr. Herger's or Mr. Radanovich's 
districts. Most of these areas have no reliable groundwater 
sources.
    Another proposal in the same document boldly calls for 
shifting our Sacramento Valley counties' people and farms off 
of surface water and onto groundwater. This is a clear 
indication that CALFED and its member agencies are attempting 
to end-run California law, which provides that counties can 
regulate groundwater extraction and export.
    Both of these programs would use CALFED appropriations to 
purchase assets away from the people in rural California and 
our local economies. Federal reauthorization of appropriations 
for CALFED thus becomes a very real danger to rural 
California's interests.
    A later CALFED implementation strategy is the Madera Ranch 
groundwater storage project in one of our member counties. This 
project is opposed by the Madera County Farm Bureau, the Madera 
Irrigation District and the Friant Water Users Association. In 
addition, the Madera County board of supervisors has expressed 
serious concerns regarding environmental and socioeconomic 
impacts of the proposal on their land and citizens. Regardless 
of these expressions of local concern and outright opposition, 
the CALFED program, working within the Federal budget 
authorization, lists this project for implementation. 
Apparently, local opposition or local conditions have no 
influence on the Federal agencies running the CALFED program.
    CALFED's crosscut budget demonstrates that, for the most 
part, the CALFED appropriation will be used to supplement the 
budget of its member agencies in ways to harm our member 
counties. The funds will be used to acquire land and water, 
study the removal of dams and create river meander zones. The 
land, once acquired, is taken off the tax roles, and the 
Federal Government is soon delinquent in its payments. One of 
Congressman Ose's counties, Colusa, reported last week that the 
Federal Government is nearly $900,000 in arrears on their 
Federal lands.
    The CALFED program is literally buying the ground out from 
under our counties, as well as the water that originates there. 
Even more troubling is that when the water is purchased for 
environmental use or exports south of the Delta, it is forever 
lost, with no replacement for our communities.
    In summary, the CALFED program is using rural California as 
offsite mitigation for environmental problems in the Delta. By 
reauthorizing this program, you folks will be throwing your 
support against your own constituents back home.
    We have been asked by this committee to provide our advice 
as to what modifications should be made to the CALFED program 
if reauthorization is warranted. We wish to go on record as 
stating that we do not believe reauthorization is warranted. 
The program is, we believe, so far out of line with the 
intentions of the local populations and their elected leaders 
that it will face fierce opposition in future implementation.
    RCRC has been actively working with other interests from 
throughout the State to attempt to develop a framework for a 
solution to the State's water and natural resource problems. We 
worked with these parties on Prop 13, which will provide nearly 
$2 billion in funds for projects to be carried out by the State 
and local interests to produce real projects, to produce real 
benefits to the people of California.
    We have been told by Mr. David Hays of the U.S. Department 
of the Interior that there will be a CALFED Record of Decision 
this summer. That action will release an additional $390 
million from a previously passed State bond, Prop 204.
    The question then is: What will we do without CALFED?
    Without CALFED, we will still have nearly $2.3 billion in 
funds to spend on improving our environment and solving water 
resources problems in California.
    Without CALFED, there will be less money available to 
convert our counties into Federal land holdings and water 
projects run by bureaucrats. There will be less money to buy 
the last remaining water resources in our counties for use 
elsewhere.
    None of our real resource problems will go away, but many 
of our governance problems and Federal domination problems will 
be minimized.
    Without CALFED, we will need a strong leadership from 
within our own State to carry this effort forward. We, as 
representatives of 28 counties, look forward to solving these 
problems. We are willing to work with State leadership and any 
others willing to put in the effort back home. We are willing 
to work with those same Federal regulators, those same CALFED 
agencies in a new State-led process without CALFED.
    Thank you for this opportunity.
    [The prepared statement of Mr. Bamert follows:]

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    Mr. Doolittle. Thank you.
    Our next witness will be Mr. Stan Sprague, general manager 
of the Orange County Municipal Water District.
    Mr. Sprague?

   STATEMENT OF STAN SPRAGUE, GENERAL MANAGER, ORANGE COUNTY 
     MUNICIPAL WATER DISTRICT, FOUNTAIN VALLEY, CALIFORNIA

    Mr. Sprague. Thank you, Mr. Chairman and members of the 
committee. I am here today representing the California Urban 
Water Agencies, which is 12 of the larger urban agencies in 
California. They represent about 22 million people or at least 
they provide water to that 22 million people and the economy 
that is associated with that.
    Just to give a little bit of background, what we have seen 
over the last 4 years is the California voters have said that 
they want to ensure a healthy environment and a safe, clean, 
reliable water supply, as evidenced by the passage of Prop 204 
and Prop 13. Combined, that is about $3 billion worth of 
authorization.
    To date, the Federal Government has appropriated a little 
over $200 million for CALFED out of a $400 million-plus 
authorization. They have spent, to this point, about $109 
million toward ecosystem projects and $30 million to 
nonecosystem projects.
    We needed to start with the fish. We need to get recovery 
going. Recovery has happened. Science is showing that recovery 
is happening. We need to now move forward in a more planned way 
and not in a panic mode for the purposes of planning how we 
continue with recovery, but let us move some of those dollars 
now and the activities into a more balanced strategy.
    The package must contain, as we look to the future, contain 
regulatory certainty; meaning Federal agencies need to drop the 
single focus on fish. They need to include water quality and 
supply reliability improvements in a balanced package with the 
environment. Right now, we have actions without science and 
science without actions.
    To respond to some of the questions that the chairman sent 
to me, with regards to the crosscut budget, Congress should be 
concerned about the slow rate of expenditures and the lag time 
between appropriations. However, public works projects of this 
nature do take time. For us in the water community, we are 
concerned about the lack of projects to address water quality 
and supply reliability for the water users of the system. We 
want to see water quality projects and water supply projects 
funded on a par with the ecosystem projects, which right now 
your tables don't show that that's the case.
    With regards to how effective has CALFED been, scientific 
data shows that fish are recovering from their low levels of 
the eighties and nineties. The funding for the ecosystem 
restoration efforts have been effective. Now we have seen what 
CALFED has proposed in their draft EIR/EIS that was released 
last summer, and we have our doubts. I don't know that many 
people in California that provided a great deal of support for 
that strategy and that package.
    However, currently, the State and Federal negotiators are 
our last glimmer of hope for CALFED will develop a package that 
we can support. Again, scientific data is weak to justify the 
notion that the pumps are the problem. Single focus of pump 
restrictions to enhance fishery recovery will not help the 
agencies who have--and I am talking about the Federal 
agencies--who have a goal of doubling the fish population. In 
fact, science shows that they cannot achieve that fish doubling 
by simply dealing with the pumps.
    Modifications to CALFED authorization was your third 
question. I would rephrase it, should we continue with CALFED, 
we are hopeful that the State and Federal negotiations will 
develop a positive package that we can support. So the answer 
is we are in ``wait and see'' mode, and we need to see the 
package. We have heard that State and Federal negotiators are 
talking about an Environmental Water Account that could cost 
water users an additional million acre-feet above the amount 
which the accord took, and we all agreed to.
    If the Environmental Water Account tools are used just for 
the environment, this will squeeze the water users to a point 
where there will be no flexibility in the system to improve 
water quality or supply reliability.
    Mr. Chairman, I would be happy to answer any questions you 
have. Thank you very much.
    [The prepared statement of Mr. Sprague follows:]

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    Mr. Doolittle. Thank you.
    Our final witness in this panel will be the Honorable Tom 
Hannigan, with whom I had the pleasure of serving once in the 
California legislature, and he is now our director of the 
California Department of Water Resources.
    Mr. Hannigan?

 STATEMENT OF TOM HANNIGAN, DIRECTOR, CALIFORNIA DEPARTMENT OF 
                        WATER RESOURCES

    Mr. Hannigan. Thank you, Mr. Chairman. And thank you for 
the opportunity to present information regarding the status of 
water conditions for the State Water Project and the Central 
Valley Project, the current discussions with the Department of 
Interior regarding stabilizing and improving water supply 
reliability for the near future, and the long term and the 
extension of the CALFED program.
    As you may know, Governor Davis has assigned a State team 
to work with Interior Secretary Babbitt on developing more 
specifics for the CALFED program. Meetings began 2 months ago 
and are scheduled to continue for at least two more meetings 
between now and the end of April. In addition to resolving 
ongoing operational issues, the larger goal has been to reach 
conceptual agreement on some of the specifics for 
implementation within the permanent CALFED program. We had a 
productive meeting on Monday of this week, at which we 
discussed Delta conveyance issues and details of a workable 
Environmental Water Account.
    The EWA is a concept whereby the needs of endangered fish 
to ultimately reach recovery can be accomplished by the 
environment acquiring water in a nonregulatory manner. We 
contemplate that the EWA would develop storage and new water 
supplies, participate in a water transfers market and use water 
project operational flexibility tools to provide more stable 
fishery protection without loss of additional water from urban 
and agricultural water users.
    Topics that we expect to discuss at meetings over the next 
month include water storage, the ecosystem restoration program, 
water transfers, water quality, an overall Endangered Species 
Act assurances package, water use efficiency, financing and 
governance, and further details on how we can begin to develop 
the concept of the EWA into a real program. Finally, we need to 
deal with how science and long-term monitoring fit into the 
program, since we all want to be sure that expenditure of 
resources and money is focused on real improvements for the 
environment and water users.
    It is clear from discussions to date that early 
implementation of meaningful programs is essential. The CALFED 
Final Programmatic EIR/EIS and the accompanying record of 
decision this summer will end the 5-year CALFED ``planning'' 
program and begin the ``doing.'' The State-Federal discussions 
are intended to fine-tune what will be in the ROD and provide 
policy guidance for CALFED implementation. Continuing studies 
will be necessary in some areas consistent with making sure we 
implement the program using the best scientific understanding.
    The Department, as well as the Governor, supports extending 
the CALFED funding authorization of $430 million enacted in 
1996. We view this as essential to maintaining the momentum of 
the program. The State has $390 million waiting to fund CALFED 
ecosystem actions upon the certification of the program's 
environmental documents. In addition, as has been stated, 
California voters passed Proposition 13 this month that 
provides $1.97 billion for a variety of key water programs, 
including $250 million to fund projects identified in the EIS/
EIR as CALFED Stage 1 actions. Extension of the Federal 
authorization for CALFED funding is necessary to maintain the 
Federal share of support for the program. And as you know, 
Federal agencies have requested a 3-year extension in the 
President's budget proposal.
    Last year, Secretary Nichols submitted a comprehensive 
reauthorization plan to this subcommittee. The plan proposes to 
extend CALFED for an additional year, through fiscal year 2001. 
The plan also calls for two-thirds of the appropriated funds to 
be directed toward ecosystem restoration projects, and one-
third for other program elements. In addition, the legislative 
language includes a provision requiring CALFED to provide 
quarterly reports to Congress that include information as of 
the list of projects underway, status of each project expressed 
as a percentage of the whole, estimated date of completion and 
local participating agencies and lead Federal agencies. Bottom 
line, our proposal represents a balanced approach to CALFED, 
and we believe it is a good start.
    The 1994 Bay-Delta Accord helped to stabilize the water 
supply reliability of both of California's largest water 
projects while we developed a longer term plan through CALFED. 
As you know, the past 5 years has not proven as stable as we 
hoped. Implementation of (b)(2) of the 1992 CVPIA reallocated 
800,000 acre-feet of water from CVP water uses to environmental 
purposes. ``Take'' restrictions due to conflicts between our 
Delta water diversions and endangered fish species disrupted 
water project operations in an unpredictable manner resulting 
in adverse impacts to both water supplies and quality. The 
bottom line is that we need CALFED to be a success in order for 
us to restore the level of reliability we once enjoyed in our 
developed water supplies.
    Water conditions in California have improved dramatically 
since the end of this year. December 1999 was one of the driest 
on record and prompted all of us to worry about what the future 
held for our supply. Today I am pleased to report that water 
contractors for the State water project are to receive 100 
percent of their requested deliveries this year. Deliveries to 
the CVP contractors have also improved. CVP ag contracts in the 
San Joaquin Valley that are impacted by the implementation of 
(b)(2) were recently told their deliveries have increased from 
50 to 60 percent. This increase was due largely to State water 
project pumping water for the CVP earlier this year. The 
Department of Water Resources continues to work closely with 
the Bureau of Reclamation to coordinate the operation.
    I think, due to time, I will conclude at that and look 
forward to your questions. Thank you.
    [The prepared statement of Mr. Hannigan follows:]

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    Mr. Doolittle. Thank you very much. Mr. Hannigan----
    Mr. Hannigan. Yes?
    Mr. Doolittle. If we were to see next year the beginning of 
a new 5-year drought like we had in the years 1987 through 
1992, and no one knows when that will happen, but what do you 
think, what would happen to us in California if we entered into 
another drought like we had? That was I think one of the worst 
ones in 50 years, but such things have been known to happen. I 
am just wondering, as the director of Water Resources, with the 
expertise available to you, the increase in our population that 
has occurred since then, how do you think our industries would 
fare and our population in such a circumstance?
    Mr. Hannigan. Mr. Chairman, first of all, the experts 
available to me told me that we should not expect a sixth wet 
year. And when it didn't rain in December, I immediately formed 
a, I'll use the ``D'' word, group within the Department to 
start planning for a drought. And lo and behold, we are now 
going to enjoy a sixth wet year. But the fact of the matter is 
there are a couple of things that I think come into play if, in 
fact, we experience a 5-year drought.
    It will be painful because many of the things we are 
discussing in CALFED can't come on line as quickly as a 5-year 
drought. I think we benefit from the experience of the last 
drought. And agencies like Metropolitan in Southern California 
have led the way in developing alternatives and insurance 
against a drought. I think we will see that lessen in some 
degree the impacts of a drought. But there is no question that 
if we don't have additional resources, the ability to offset a 
drought would be severely limited.
    Mr. Doolittle. I think we all know agriculture would be 
severely hit because even in these so-called wet years, they 
have been severely hit.
    Mr. Hannigan. No question.
    Mr. Doolittle. But what would be the impact, say, on 
Silicon Valley, in your estimation, if we go into another big 
drought?
    Mr. Hannigan. Well, Santa Clara Water Agency, who serves 
the Silicon Valley, as I understand their operation, do have 
some flexibility. But they rely heavily on water from San Luis, 
their entitlement in the State Water Project. And as you 
probably know, in 1999, because of the Delta smelt problem 
early in the year, San Luis was drawn down to a dangerously low 
point, which is threatening all of the water users below the 
pumps, Santa Clara the most. So they would have a hard time 
dealing with that 5-year drought. I trust their flexibility in 
their own system would buffer some of the potential impacts, 
but clearly if we can't keep San Luis at a level that meets 
their water demand request, they would experience some negative 
impacts.
    Mr. Doolittle. It is my understanding they have to have a 
certain level of water quality in order to be able to----
    Mr. Hannigan. That is correct. And as the level of San Luis 
drops, the water quality diminishes and that is what impacts 
them.
    Mr. Doolittle. Thank you.
    Mr. Bamert, I hope, ultimately, if we should reauthorize 
CALFED, you won't feel that with the conditions that we impose 
we won't be destroying the rural way of life. That certainly 
wouldn't be our intention. But I do observe that I think Mr. 
Sprague mentioned that $113 million had been obligated. That is 
true it has been obligated, but out of that, even only the 
total of, according to our figures, only $35 million has been 
spent. So you have got millions of dollars out there that even 
if CALFED went away at the Federal level, there is lots of 
money out there already that will be spent eventually.
    So one of the benefits of a reauthorization, from that 
standpoint, would be to gain improved use of the money that has 
already been appropriated, and to get better accountability, 
and hopefully to accomplish something that we are all seeking. 
But I appreciate your forthright testimony. I think you 
conveyed clearly the depth of frustration, the depth of 
sentiment there is out there with reference to what has or 
hasn't already happened.
    You mentioned storage. Would you just comment, representing 
many of those counties, which are Upland areas, sources of much 
of this water, what are your storage needs?
    Mr. Bamert. Well, Mr. Chairman, I am from a small county, 
Amador County, as you know, and the amount of water we need is 
only 10,000 acre-feet. That will carry us on almost to the end 
of this century. But being above the dams, with little 
groundwater, we do not have the opportunity to participate in 
the State Water Project or the Central Valley Project to obtain 
additional water. So we need to retain that water above the 
dams that are now exporting our water to the East Bay and other 
areas.
    You mentioned the money that is in the CALFED process. Part 
of the problem is we are not getting that money up in the water 
shed areas above the dams, which we think will produce 
additional supplies of water for the rest of the State. But our 
main concern is maintaining our area of origin rights so that 
we have water maintained in our counties for the future. That 
is about it, I guess.
    Mr. Doolittle. Mr. Sprague, you represent a major urban 
area, critical to serve them. Are you concerned about the 
immediate future in terms of what you are going to be able to 
produce for your customers in the next year or two?
    Mr. Sprague. Yes. But possibly in a different way. If I am 
looking at it strictly from my own agency in Southern 
California, a member of the Metropolitan Water District, we 
have a little advantage. We have the Colorado River system, and 
assuming that it works, probably through conservation and so 
on, we have the ability to survive. But I can see where other 
portions of the urban community don't have that same looped 
system. Every single local retail water agency is able to get 
water from a variety of sources, even if they just have a 
looped pipeline system.
    And so it is going to be a challenge to some of the other 
areas. We are certainly concerned. There has been a lot of 
effort done, not just in the Metropolitan service area, but 
throughout urban California in the area of water use 
efficiency, and that is going to help us, to some degree. But 
without the certainty, as you continue to add demands on our 
system and we continue to try to improve water-use efficiency, 
the elasticity in the system starts to disappear, and that is 
one of our concerns with the lack of an understanding of what 
this package is going to be able to deliver over the long haul, 
so that we have some certainty to manage or develop our 
planning strategies.
    Mr. Doolittle. Thank you.
    Mr. Moss, do you feel a good deal of the elasticity has 
already disappeared in this system? I mean, by the way, we are 
going to lose some of that Colorado River water here shortly I 
understand.
    Mr. Moss. Certainly the elasticity has been taken. You 
asked about another 5-year drought. The last drought began and 
CVP supplies on the West side were able to be sustained at 100-
percent of deliveries for the first 3 years of the drought. 
That condition no longer exists, obviously. We are in a wet 
year. We are not in a drought. They are getting 50, maybe 60, 
percent of their supplies. And if we had the conditions that we 
are currently under and faced another drought, those water 
supplies would drop to zero. So the elasticity is gone. We 
don't have the flexibility now to find water, to manage water, 
in ways that allowed us to manage a drought.
    Mr. Doolittle. Thank you.
    Mr. Dooley is recognized for his questions.
    Mr. Dooley. Thank you.
    Mr. Hannigan, we have been very pleased with the Governor's 
commitment and participation in the CALFED process. I would 
just like to clarify is the Governor, in your role, approaching 
this with the objective that, through this process, that all of 
the stakeholders can get better, including the environmental 
interests and municipal, agricultural users?
    Mr. Hannigan. That is correct.
    Mr. Dooley. I guess then when we are proceeding with that 
as our objective and really our commitment, Mr. Sprague 
mentioned some concerns about the environmental water count, 
and some of my constituents have also expressed some concerns. 
They think that there might be some merit in concept of what is 
happening there. But when we start talking about an additional 
400,000 acre-feet or whatever the number is to be put into an 
environmental water count, where is that water going to come 
from and how is it not going to have a negative impact on some 
of the existing users, whether they be Mr. Sprague's 
constituents or Mr. Moss's or even Westland's irrigation 
district, which currently, in a very wet year, is receiving 60 
percent of their contracted supply? Where does this water from 
come and how can they have any assurance that this isn't going 
to be a further reduction in their deliveries?
    Mr. Hannigan. The concept of the environmental water count 
is to develop, if you will, a budget for the environment. And 
earlier, one of the witnesses used the figure 400,000 acre-
feet. So let's just use that for a moment because there is some 
accuracy to that number. There is water that will be acquired 
by purchase, in large part State and Federal resources 
purchasing the water and storing, renting initially, ultimately 
benefiting from additional storage facilities, in part. We 
envision that if a new storage facility is constructed, that a 
portion of its capacity would be purchased by the environmental 
water budget, if you will.
    So in the short term, we are trying to figure out how to 
put together an environmental water count in the range of 
400,000 acre-feet of water through purchase and then store, you 
know, wet year water moved into storage, available in less than 
wet years, and then sustain that number over a period of time. 
In return for that, water users would be given assurances that 
not any of their supplies would be diminished as a result of 
environmental actions.
    Mr. Dooley. And how could you provide those assurances when 
we still have existing Federal and State environmental laws, be 
they ESA, Clean Water Act?
    Mr. Hannigan. Well, there are, and here again that is a 
topic of these discussions. There are, in law, environmental 
``takes,'' if you will. The Delta Accord that was referred to 
has a water value to it for the environment, the CVPIA, your 
Federal legislation, has a figure of 800,000 acre-feet per year 
of water attached to it, and then there are some existing 
biological opinions, under the ESA, that are in place. And we 
are recognizing, trying to recognize, those existing 
environmental water sources and adding to that, but not taking 
it from the water users. We are trying to give them assurances 
that they will be able to count on, subject to hydrology, count 
on a water budget that exists today, and hopefully is improved 
upon through CALFED over a long period of time.
    Mr. Dooley. I guess, Mr. Moss, I would like you to perhaps 
respond. As Mr. Hannigan lays this out, that there appears that 
this might have some benefit, what are your concerns related to 
this proposal?
    Mr. Moss. Think of the size, 400,000 acre-feet. Let me give 
you a little real-time experience. This past summer, as part of 
a pilot project for the San Joaquin River, I had the task of 
that project of going out and finding 15,000 acre-feet in the 
San Joaquin Valley to cover losses that were generated as a 
result of that project, losses that could not be otherwise 
returned to Friant water users. It took me all summer.
    I am still, right now, trying to get all of that water 
back, if you will. The thought of 400,000 acre-feet coming out 
of this same area and trying to meet these environmental needs 
is outlandish. It is crazy. It will never be found. And so if 
that is the tenet, from which we begin regulatory certainty, we 
will not get there. We cannot get there.
    Mr. Dooley. Mr. Sprague, you have commented in your 
testimony about some concerns from the municipal side of things 
on this. I would just like you to respond to the issue.
    Mr. Sprague. The difficulty, or at least the way we 
perceive the moving forward of this Environmental Water 
Account, and so I am kind of going from rumor, if you will, is 
that the focus is so much on fish that that water quality is 
being lost in the calculation. We, in fact, I think it was the 
urban community that came forward with this original idea 
because we saw that here is an opportunity to predeliver water 
in a way that helps you to balance the water quality issues and 
still protect the fisheries. So at times when you have to shut 
off the pumps or at times where you have to move water where 
the water is not as good a quality, that we have the ability to 
still protect water quality needs.
    And so that is our need. If it gets there, fine, but my 
concern is how this Environmental Water Account is structured. 
Are all of the tools designed for fisheries or are they 
designed to meet more than one leg of a stool in a fashion that 
ultimately the water in the Environmental Water Account 
probably does go to the environment. However, how it is managed 
can help resolve a variety of other issues, and that is what we 
have not seen. And I am very hopeful that some negotiations can 
happen to where we have some regulatory certainty so, in fact, 
that water account can be used in that fashion.
    Thank you.
    Mr. Dooley. Thank you.
    Mr. Doolittle. Well, at this point, we have two votes. Do 
you want to go, Mr. Pombo?
    Mr. Pombo. No.
    Mr. Doolittle. OK. Mr. Pombo is recognized for his 
questions.
    Mr. Pombo. I thank the chairman for yielding.
    Mr. Hannigan, can you tell me what is the estimated 
shortfall of water for the State of California in the year 
2020?
    Mr. Hannigan. I should know that number, and I am going to 
try. But as I think I mentioned to one of you who I visited 
yesterday, maybe you, Mr. Pombo, that the State, every 5 years, 
produces a document. It is called----
    Mr. Pombo. Yes, we talked about it.
    Mr. Hannigan. --Bulletin 160. And I believe the figure is 
in excess of 1 million acre-feet of water, but I can't give you 
a specific number. It is not on my----
    Mr. Pombo. Can you provide that, for the record, to the 
committee?
    Mr. Hannigan. I certainly can.
    Mr. Pombo. How are we going to use the CALFED process to 
meet California's shortfall in terms of urban, rural, 
agricultural and environmental needs?
    Mr. Hannigan. I am sorry. Could you----
    Mr. Pombo. How are we going to use the CALFED process to 
meet that shortfall?
    Mr. Hannigan. Well, that is part of the way to meet the 
shortfall. I mean, in addition to the CALFED process, the 
passage of Proposition 13, the carryover of the money from 
Proposition 204, the further investment on the part of many 
water agencies up and down the State, again, I will mention 
MWD. They just completed a storage facility that will hold 
800,000 acre-feet of water. We are hopeful that we will address 
and meet that need over the next 15 years or so. And that 
includes conservation, it includes new technologies. 
Desalinization is one that we sort of look at with askance at 
the moment, but who knows, in 10 or 15 years, that process 
might be such that our coastal regions, which are the most 
populated, could be primarily served by that. And if that were 
the case, we would have a substantial breakthrough in water 
supply in this State.
    Mr. Pombo. Let me ask you about something you didn't 
mention. Do you support on-stream storage as an option?
    Mr. Hannigan. No. I don't see on-stream storage as a viable 
option in today's environment, except raising Shasta, which is 
being considered, by 6.5 feet, and the possibility of raising 
Friant and Los Vacaros. Well, Los Vacaros isn't online, but----
    Mr. Pombo. We have a shortfall, and at this time you don't 
support new on-stream storage. A lot of the proposals that have 
been put forth, including a number of the ones you have 
mentioned, create no new water. They do give us greater 
flexibility. They do give us the ability to store water in 
areas that we currently do not store water. But in terms of 
capturing new water supplies, in terms of providing that 
million-plus acre-feet that you talk about, they do not do 
that. The option of doing new on-stream storage facilities is 
one of the only ways of creating new water.
    Mr. Hannigan. Well, it may be one of the ways of creating 
new water, but if you talk in terms of on time or timely, I do 
not consider it to be one of the timely options to providing 
water, even possibly in a 20-year timeframe.
    Mr. Pombo. Why?
    Mr. Hannigan. Finding appropriate locations, facing the 
difficulty in permitting such a facility and then financing. If 
you presume that it is going to be financed by those who 
benefit from the water, it may be difficult to produce that 
kind of a facility in that timeframe.
    Mr. Pombo. So do you propose that we exclude on-stream 
storage from the possibilities for the future?
    Mr. Hannigan. I don't propose that we exclude anything. I 
think when you are looking, you look at every possibility. But 
when you come to a decision making time, and you have to accept 
some things and reject others, it is quite possible that on-
stream facilities will not make the cut.
    Mr. Pombo. I know my time has expired. But it appears to me 
that you have made up your mind in terms of on-stream storage.
    Mr. Hannigan. No, I haven't made up my mind. You asked me 
how I felt about it, and what I see and what I have to deal 
with, I don't see it as a viable option.
    Mr. Pombo. I thank the chairman.
    Mr. Doolittle. We will recess, and at the conclusion of the 
votes resume with Mr. Miller being recognized.
    [Recess.]
    Mr. Doolittle. The committee will reconvene. Let's assemble 
ourselves and quiet down as soon as possible here.
    In case I didn't mention it, and I don't think I did this 
time, that when you sit before those mikes, which are live all 
of the time, you are engaging in a worldwide broadcast on the 
Internet.
    With that, Mr. Miller is recognized for his questions.
    Mr. Miller. Thank you, and thank you, Mr. Chairman, for 
holding this hearing. I think it is rather timely. I would like 
to pick up a little bit, where we might have left off, if I 
might, with Mr. Hannigan, the director.
    There is a lot of discussion, Tom, about what do we do when 
we enter another 5-year drought, and obviously that is a very 
important question in California. And when we look at what 
happened in the previous drought, obviously we learned a lot 
from the seventies in the droughts where there was a conscious 
decision that everybody was going to get, in the first year of 
the drought, everybody was going to get full delivery and the 
second year of the drought everybody got full--and all of a 
sudden somebody said, ``Jesus Christ, you know, Shasta Dam is 
pretty low here.''
    And so today, when you are confronted with the prospect of 
a dry year, you start to think how are you going to start 
building carryover into this system, as I understand it. 
Because since then we have obviously added 15 million 
additional people to the States, so the concerns are heightened 
in terms of what happens to urban populations and the rest.
    So I appreciate when people run around saying, as you said 
early on when it looked like maybe this was going to be 
potentially a dry year, we didn't know we were going to get 21 
out of 29 days of rain in February, and snow and all of the 
rest that, you start to say, well, you better start 
anticipating 50 percent or what have you, and then those are 
adjusted. That is because we learned something from the 
previous regimes that ran us right into the ground, where all 
of a sudden we found ourselves in years four and five with 
essentially no flexibility in the system. If you will remember, 
we were stringing pipes across the San Rafael bridge so we 
could send water over there because their reservoirs were down 
because people acted in the first couple of years as if nothing 
was happening. And now we act in a very cautious fashion. Some 
would argue, I guess, too cautious.
    But the point is that you can't speculate about the drought 
and then insist that nothing change when you find out that you 
have got a dry year on your hands or potentially dry years. 
Those are management tools, it seems to me, that have to be 
incorporated in these regimes as you start to figure out how 
would we allocate, what would we do if this has happened. 
Obviously, again, we sacrificed a lot of people's orchards 
because we treated all crops the same. And so in the fourth and 
fifth year all of a sudden people found out that they lost some 
of the permanent crops.
    And I think that that has got to be kept in perspective 
because I think there is a tendency to somehow suggest that we 
haven't learned anything, that if there is another drought, it 
would be treated the same, that we have the same old management 
tools we had then, which is not true. And yet that becomes the 
driving force to suggest that, therefore, you know, billions 
and billions of dollars may have to be spent in one fashion or 
another. You are at the eye of the storm of sorting this out, 
and I respect you for staying there.
    It seems to me that, and others have mentioned it, I want 
to commend the Governor and the secretary for being directly 
involved, and yourself, and Mary Nichols and others, Gary 
Condit and others, who were involved in that. Because I think 
CALFED has sort of gone about as far as it can go without 
policy makers, people with authority, being directly involved. 
I think CALFED did a hell of a job, but I think that group has 
taken it about as far--now policy makers have got to start to 
make some decisions, and that is what makes everybody else in 
the room nervous.
    But I think also, in the characterization of this system, 
is the struggle here is to bring a system that is back into 
balance. This, in many instances, certainly the Federal system 
was run as a single-purpose system. That is why we ended up 
passing CVPIA was to bring it back into balance. We know you 
can lament the Trinity water decision, except that you have a 
constitutional obligation there, and you effectively stole the 
water in the middle of the night. Good politics at the time, 
but now you have got to bring it back. I mean, you know, water 
that was headed rapidly west now runs uphill and east. But what 
the hell, that is what money can make water do.
    And I think that people have got to appreciate that that is 
what the struggle is here, and what the policy makers are now, 
when you deal with an environmental water count, you deal with 
surface storage, you deal with the Delta, with groundwater 
management, these are all efforts to try to bring this thing 
back into balance that wasn't in balance for 35 or 40 years. 
And I just want to make sure that we don't assume that there 
are not legitimate claims in these meetings by people who, in 
the past, have not necessarily been represented.
    So now I would like to know, to the extent that you are 
comfortable speaking publicly, because one of the values of 
these meetings is, to some extent, that they are private. 
Obviously, one of my concerns is there are a lot of proposals 
on replumbing the Delta, whether it is a peripheral canal, 
whether it is a Hood diversion, whether it is gates and 
barriers and all of the rest, and I just wondered if you have 
any indication yet of what the time table would be there and 
how that plays into it because it is obviously key to a number 
of constituencies in the State.
    Mr. Hannigan. Well, as somebody pointed out to me sometime 
in this last whirlwind year of trying to learn the water world, 
the Delta fundamentally is ebb and flow of tide moving east and 
west and water moving north and south. And they cross, and they 
create all kinds of challenges for us, as policymakers, or you 
as policy makers and us as implementers and stakeholder groups 
alike.
    There is discussion of fixes to the Delta in trying to 
protect the interest in the Delta from levies to water supply, 
to the fish, and I guess it came to a head, if you will, last 
November and December, when the Delta cross channel, which as 
you know is a facility there now to deal with water quality and 
fish actions, closed. It allows fish to stay in the mainstem of 
the Sacramento River and move south and out or I should say 
move west and out.
    When it is open, it provides some water quality benefits to 
other parts of the Delta. And when it closed in November and 
December, we were still pumping at Banks and at Tracy, it 
created a water quality, a water shortage problem in those 
portions of the Delta, while it was allowing questionably a 
number of fish to stay in the main stem.
    And we finally, through operational conferring and trying 
to develop better decisions, we finally decided on a course of 
action that had it open on certain hours of a 24-hour period, 
allowed us to then pump, it allowed the water quality in those 
areas of the Delta that were threatened to improve, and it 
opened our eyes to the need to do something about this 
mechanical dysfunction of the plumbing.
    And so we are talking about Hood, and we are talking about 
a diversion to be studied at Hood, not to be implemented. And 
in the first phase, this study will commence, consistent with 
other fixes to the Delta, and of course it will focus on a 
number of things, including the level of CFS that might be 
appropriate if it were to be constructed. What happens to the 
fish if you put in a diversion at Hood? There are those who 
would suggest that the fish get trapped, among other things, 
and can't get out, and it would have a negative impact. So we 
are going to look at all of those factors in a Hood diversion, 
as well as further study how we might better operate the Delta 
cross-channel, and maybe better operation there would preclude 
Hood, but we are not making that conclusion in the Phase 1.
    Mr. Miller. Is it fair to say, and then I will stop, is it 
fair to say that this 4,000 CFS figure that showed up without 
parenthood in the interim report, you are not locked in on 
studying just that. You are studying a range of----
    Mr. Hannigan. That is right. I think that is fair to say.
    Mr. Miller. --in that particular case.
    Mr. Hannigan. Right.
    Mr. Miller. Thank you.
    Mr. Doolittle. Mr. Radanovich is recognized.
    Mr. Radanovich. Thank you very much and thank you, Mr. 
Chairman, for putting this hearing together, and I welcome all 
of the guests on the panel.
    I do want to, and appreciate the statements of my former 
colleagues, I will disagree with the other gentleman from 
California, the other George from California, in the statement 
that things have been brought into balance. I think part of the 
reason why we are having this hearing is that although 
priorities for California water may have shifted more in areas 
of your preference, they have been brought out of balance in my 
areas of the State. And in what I view as in the agricultural 
and urban areas of the State are right now at an imbalance, and 
that imbalance can only be corrected by increased water 
storage. We will never be in a balanced situation between 
environment, agriculture and urban interests until there is 
increased water storage in the State. And I believe that that 
is what really has caused the problems.
    The only way to, in my view, alleviate any short-term or, 
excuse me, any imbalance and, therefore, some water need in 
agriculture and urban areas, are to, one, alleviate the 
regulatory constraints on a short-term basis, and No. 2 is to 
move forward quickly with some long-term storage.
    I do have a question, if I may. And, Mr. Hannigan, it was 
great to meet you yesterday, and I appreciate your being in the 
office. I wish that you would clarify a little bit something 
for me on the issue of the short-term or, excuse me, the 
400,000 acre-feet and the, what did you call it, the----
    Mr. Hannigan. EWA, the Environmental Water Account.
    Mr. Radanovich. Is that in addition to the water that is 
being taken currently--I believe it is about 1.1 million acre-
feet--under ESA and CVPIA or would that effectively cut what is 
currently being taken and reducing it down to 400,000 acre-
feet?
    Mr. Hannigan. It is not the latter.
    Mr. Radanovich. Pardon me?
    Mr. Hannigan. It is not the latter. It is not to replace 
all of that which is, by regulation or by law, in the case of 
CVPIA, there. It is not exactly--there is the discussion of a 
baseline, and the baseline would include CVPIA with possibly 
some modifications of how that is implemented, the tools that 
are given under the law to Interior. It is some of the 
biological opinion that governs the Delta, and it is the, for 
the moment, the accord, that whatever is in the accord. That is 
part of the debate. We are trying to define the baseline. And 
then the 400,000 acre-feet is in addition, and I am just using 
that number now--I hope we are inclined to land on that, and 
that takes on a life of its own--but that is a number that is 
being discussed, and it is added to whatever the baseline 
finally becomes and given, with that, assurances that there 
will be no additional ESA or other ``takes'' of that nature.
    Mr. Radanovich. So from what I am understanding, unless 
this thing is exactly clarified, it could very well be that the 
400,000 acre-feet would be a ``take'' in addition to what is 
already being taken now under ESA and CVPIA.
    Mr. Hannigan. I would not describe it as a ``take.'' The 
concept is to acquire it.
    Mr. Radanovich. Mr. Moss would describe it as a ``take.''
    Mr. Hannigan. Well, we can differ, but----
    Mr. Radanovich. Mr. Sprague would as well.
    Mr. Hannigan. The intent is to not harm the water community 
any more than it has by the existing, however it is defined, 
base. And the 400,000 acre-feet would be acquired by money and 
other resources on top of that not from the water users.
    Mr. Radanovich. Which leads me to another problem that I 
have with the CALFED process, and I have been one of its 
biggest proponents and supporters. And that is the lack of 
clarity or the perceived lack of clarity under what the 
original agreement said in the first place back in December 
1994 when it was signed.
    I got, I believe, and after discussions with you, knowing 
that not only agriculture, but urban users and the 
environmentalists all walked away with perhaps an unclear idea 
as to how they, what they signed and how this was going to work 
out. And after 5 years, it has led to a great deal of 
disappointment on all sides because everybody thought it was 
something that it never turned out. And essentially everybody 
signed on to an agreement that wasn't specific enough. And so 
at this point, everybody is sorely disappointed in this entire 
process, which leads me to the concerns of my constituents, 
which I take to be both urban and agriculture users. And that 
is that we are at a point now where we are still reviewing this 
process. We have signed an agreement that was not specific, and 
so therefore the regulatory agencies have been administering 
CVPIA and ESA in contrary ways to what the urban and ag users 
thought would be, and now we are looking to go forward, still 
trusting that what we are all agreeing to today is going to be 
administered as fairly as it was these last 5 years or 
unfairly, as many, many people believed.
    So I guess in my view, CALFED gets a big fat ``F'' in that. 
And that the agreement was not, everybody came together to work 
together, the stakeholders, to solve the State's water problem. 
It was very admirable. They signed a blurry agreement that got 
screwed up along the way. And my thought is that any future 
move with CALFED or any future direction in solving the State's 
water problem should not be conducted in the same way. In fact, 
we might want to go back and fix what created the problem in 
the first place, and that is nobody had a clear idea of what 
their expectations were on the short term, while we were 
solving all of these long-term problems.
    And so I guess this leads me to my next question because I, 
in my right mind, would never advise urban or agriculture 
people to pass on any or have any expectation of any future 
discussions of CALFED and State Water unless they know exactly 
what they are getting, and it is in law. Would you support 
then, assuming that the stakeholders could get together again, 
get something specific that they can all agree on, would you 
support bringing that bill to Congress and getting it in the 
law so that we have the backing of the law, which has been 
another problem, as you know, of CALFED. Its standing in the 
law has always been kind of questioned. Would you support 
codifying any agreement like that and making it into law, so 
that we all know what our expectations are and we all know that 
we can operate, at least on the short term, with a certain 
degree of reliability?
    Mr. Hannigan. The whole discussion about the--first of all, 
I agree with what you have said.
    Mr. Radanovich. Yes, and I realize----
    Mr. Hannigan. It has been my own experience, when last 
April we had to drop pumping at Banks from April 15th to May 
15th, you know, the staff, the people, the technical people 
advised me this is what we have to do, and we did it. Then, 
after May 15th, when we were presumably to ramp back up, we 
continued to stay at the low levels, and people are saying to 
me, you know, we have got these smelt around the pumps. We 
can't go back up because the count has gotten to a threshold 
where a red light goes on and all hell breaks loose. And so we 
stayed with the low pumping. I started getting phone calls from 
the project contractors, and they are saying, ``You know, I 
hope we are covering the lost water as a result of this 
continued pumping,'' which is what happens under the accord.
    So I tell people, ``Give me a copy of the accord.'' Now, I 
am not an attorney, but I get it, I read it, and I find there 
is nothing that enforceable in the accord.
    Mr. Radanovich. Tom, I don't have a lot of time. I was just 
wondering if I could get your idea on whether you support a 
law----
    Mr. Hannigan. Well, if, in fact, we get an agreement as a 
result of this CALFED process that does what we are all happy 
with, I see no reason why it can't be codified.
    Mr. Radanovich. OK. I appreciate that.
    Do I have more time? Can I run on or shall I wait?
    Mr. Doolittle. You have run on 4.5 minutes beyond the time.
    Mr. Hannigan. I apologize for----
    Mr. Doolittle. We will come back. We will give you a second 
shot at it.
    Mr. Herger is recognized.
    Mr. Miller. Mr. Chairman?
    Mr. Doolittle. Yes, Mr. Miller?
    [Mr. Doolittle and Mr. Miller conferred.]
    Mr. Doolittle. Well, I suppose that would be appropriate. 
In that event, it is back to me.
    Mr. Hannigan, I feel very strongly, It is so interesting to 
me, when CALFED was conceived, they took on-stream storage out 
of the equation to begin with, and that made it immediately 
suspect in my mind. And now to hear you say that you do not 
think that is viable, and then you cited, what do we call this 
thing down there that used to be Domenigoni [ph.], is it 
Diamond Reservoir? Is that what they call it now?
    Mr. Hannigan. Right.
    Mr. Doolittle. Where they bought a valley and put dams at 
both ends, a need I believe when the dust has settled, that is 
going to cost right around $3 billion or so----
    Mr. Hannigan. That is right.
    Mr. Doolittle. --for the capacity to store 800,000 acre-
feet of existing water, not new water, simply moving it around 
so that it is there.
    Now the State is talking about coming up with 400,000 acre-
feet. I am just wondering, I mean, that is a lot of acre-feet. 
Where are you going to put all of that?
    Mr. Hannigan. Let me just respond first to the Diamond 
whatever they called it. It was East Side--well, it is Diamond 
something now. Diamond Valley. Diamond Valley. Thank you.
    That water is water that is otherwise not used by MWD in 
any given year. It is a combination of Colorado and State Water 
Project so it creates a yield, and it is like new water. It is 
water that otherwise would not be used in the system. And I 
wanted to clarify that from the earlier discussion with 
Congressman Pombo. It is not a zero sum game. That is water 
that in the case of the Colorado would flow on down and 
probably flow into Mexico.
    Mr. Doolittle. But things are so bad and so unstable in 
this State that the Met decided they would impose on their 
ratepayers a $3 billion charge to gain the certainty of having 
the water there if they needed it. That is a pretty sad 
commentary on the state of affairs.
    Mr. Hannigan. Well, I agree with you. I think that is a 
debate that ought to occur amongst the constituencies of MWD. 
They had a project. I don't know what its original estimate 
was, but it ran over that, and it's now where it is.
    Mr. Doolittle. I think it was supposed to be around a 
billion, so, you know, just a couple of extra.
    Mr. Hannigan. Well, as somebody said, it is only money.
    Mr. Doolittle. But I make this point: I mean, they did all 
of that to store water they already had a right to. It is not 
like building a dam and creating new water in that sense. And I 
just find amazing, and frankly I think a majority of this 
committee strongly supports adding on-stream storage, and there 
is the most obvious side of all at Auburn, and you people act 
like that is talking about building some 22nd Century 
transportation system or something.
    Mr. Hannigan. No, but----
    Mr. Doolittle. Something that is so costly and out of the 
realm of reality that that is just a pipedream. Why do you have 
that feeling?
    Mr. Hannigan. I don't have that feeling. But I would argue 
that is the best case for why on-stream new constructed storage 
is not a viable alternative. How long has it been since 
Congress authorized Auburn?
    Mr. Doolittle. Well, let me just ask you this.
    Mr. Hannigan. I don't know. When was it--in the late 
seventies?
    Mr. Doolittle. It was 1965.
    Mr. Hannigan. 1965.
    Mr. Doolittle. Even George wasn't here when that happened.
    [Laughter.]
    Mr. Hannigan. He came right after. But any rate, no, Mr. 
Chairman, that is my point. It is not whether or not whether or 
not for me, whether or not it is a viable project. As I look 
into the year 2000 at how to deal with California's water 
problems, that doesn't look like a viable alternative.
    Mr. Doolittle. Well, may I just suggest to you a couple of 
points of why I think you ought to at least reassess it.
    Mr. Hannigan. OK.
    Mr. Doolittle. Yes, our friends who proclaim themselves 
environmentalists definitely are opposed to the dam, even 
though it adds new sources of water and does a great deal for 
water quality and water quantity. But you have the entire 
foundation of the dam there for approximately a billion 
dollars. You would get not 800,000 acre-feet of storage, but 
2.3 million acre-feet of storage. Most of the land has already 
been acquired and sits there.
    The permits you were talking about have been acquired. I am 
sure they will be fought over again in court. But the point is 
a lot has been done. The city of Sacramento gets the flood 
protection it needs to stop the flood that the experts predict 
will occur. That qualifies it for Federal flood control money. 
I mean, there is a whole bunch of advantages to this site, plus 
it makes the water available for Mr. Bamert, well, indirectly. 
He wouldn't directly get it from there, but I mean it adds to 
the supply. It certainly helps El Dorado and Placer Counties, 
the local people, Sacramento County, and first and foremost San 
Joaquin County, which is the greatest probably single 
beneficiary of building an Auburn Dam in terms of water supply.
    So when you look at the figure, I mean, Met spent $3 
billion to get 800,000 acre-feet of moving its water around, 
you could spend about a billion and get 2.3 million acre-feet, 
plus protect all of the money the State has at risk in the 
flood plain down in Sacramento. Will you assess these criteria 
and perhaps reevaluate?
    Mr. Hannigan. We will review, reassess and perhaps 
reevaluate. But, you know, the truth of the matter is I don't 
think that is where California is going. They are not going to 
the Auburn Dam.
    Mr. Doolittle. Well, California will go where we tell it to 
go, won't it, as the policymakers?
    Mr. Hannigan. Well, I don't know. I don't have any control 
over who goes into court and files a suit----
    Mr. Doolittle. No, but we can fight those suits.
    Mr. Hannigan. I don't have any control over a court who 
rules in favor of those who file. I mean----
    Mr. Doolittle. I mean, anything we do that is a new project 
is probably going to be subject to a suit. I mean, so Auburn is 
not unique in that sense.
    Mr. Hannigan. Well, we are trying to find projects that are 
viable, that are timely and that provide a solution. If Auburn 
does that, we will certainly consider it.
    Mr. Doolittle. Well, Auburn does that. A majority of this 
subcommittee supports that. So I would urge you to consider and 
will constantly be looking to encourage that as a solution 
because it is the most obvious solution. Why would you spend so 
much more money someplace else to get less? And that is not 
going to be easy, as you well know. You are still going to have 
your lawsuits coming up there, and you probably need to do 
everything that has been mentioned and Auburn and will be lucky 
to stay ahead of it.
    All right. Mr. Miller gets his second round.
    Mr. Miller. Mr. Dooley.
    Mr. Doolittle. Oh, Mr. Dooley. All right. OK.
    Mr. Dooley. No, thank you.
    Mr. Miller. Thank you.
    Mr. Moss, in your testimony in the beginning you talked 
quite a bit about certainty, and I would like to return to a 
point here; that it is very hard, I mean, obviously we are in a 
transitional period here, where we had a water system that was 
conceived and run by rules according to 1950, and we have a 
much different State today in the year 2000 than our 
anticipated growth to the year 2030/2020. And so as I said, we 
are trying to bring this system into some equilibrium, and yes, 
equilibrium means that water will flow out of some areas into 
other areas and those changes will be made. But it is hard for 
me to see how you bring the system into equilibrium until you 
measure out what all the requirements are to do that.
    And obviously ESA is a huge part of that component, a huge 
part of that component. I mean, CALFED exists because we are 
trying to put off ESA coming down full force and effect. The 
Environmental Water Account is something people are thinking 
about trying to put off so they can get the full 404 
protections and all of the rest of that. Trinity River, you can 
keep putting off the decision, but everybody knows that that 
water, some amount of water is going to be put back into that 
river as a matter of treaty, a matter of rights there.
    Colorado River is changing. The questions of what happens 
with groundwater, what management yields can be done, the 
things we see going on in terms of water reuse and management 
down in Orange County and in L.A. So I don't know quite how you 
get that certainty. If people want to continue to pretend, as 
if somehow if we could just get these players out of the room, 
we could solve this problem. Because those players aren't going 
to leave the room. As Mr. Hannigan pointed out, they will just 
end up in the courtroom because they have very strong standing 
in the law. So I don't get where people think by throwing out 
CALFED or something that this is going to lead to some level of 
certainty.
    Mr. Moss. Well, the water users always will move in the 
direction of certainty. And that is kind of an axiom that I 
think you will find very consistent. So if they find more 
certainty in the courts, they will move in that direction. If 
they find more certainty in working through CALFED, they will 
move in that direction.
    Let me more directly answer your question in terms of, in 
terms of this regulatory baseline and the concepts therein. 
When the Accord was signed, people thought they had attained a 
certain level of stability. The biological opinions as a result 
of the Accord said that they were nonjeopardy, that we had 
attained a level of stability with the Endangered Species. 
While it didn't say it was in a recovery path, it was a level 
of stability that would keep them from going extinct.
    And I think what we are talking about now is moving into 
the realm of recovery of these endangered species. And so we 
start with a level of stability for the species. And now the 
question is will the Federal Government exercise its discretion 
that exists within the law to have recovery at this angle, that 
quickly, or will it be at this angle, that quickly? There is a 
lot of discretion in how quickly the species will recover. And 
I think what we are asking for, as water users, is to take a 
reasonable level of--use that discretion to get a reasonable 
level of recovery when balanced against the obvious impacts 
that are occurring to water users, both in terms of water 
quality and water supply.
    So we think there is a tremendous amount of discretion 
within the way the laws are being applied. And that is the 
balance that we are seeking at this point. Let me also clarify 
my previous remarks.
    Mr. Miller. Let me just point out, you know, that is an 
interesting argument because the suggestion is there is only 
water in building dams. You suggested there is water in 
discretion.
    Mr. Moss. Absolutely.
    Mr. Miller. One is a hell of a lot cheaper than the other.
    Mr. Moss. Absolutely. I mean, if you can manipulate, for 
example, the export/import ratio in terms of how much can be 
pumped out of the Delta at various times, you can generate huge 
amounts of water.
    Mr. Miller. Again, going back to your argument----
    Mr. Moss. Again, that is a discretionary point that is 
under the control of primarily the Fish and Wildlife Service.
    Mr. Miller. Back to your argument about certainty, I mean, 
it seems to me that some people want to condemn, and I guess 
they are condemning the process by which a group of 
policymakers are trying to arrive at that. And some people may 
get some bad news and other people may get good news, and some 
people get no news. But you have these competing claims that 
are now well-recognized, that were never recognized. We didn't 
even know about them, in some cases, when we designed these 
systems. And I think that is the struggle that is going on 
here.
    Mr. Moss. Absolutely.
    Mr. Miller. And I think what I hear Director Hannigan 
saying is we are looking at a range of tools here to see how we 
can better manage this very complex system. And to the extent 
that we can, diminish what may view as losers when it is all 
put together. And yet we see people come in and blasting 
because we have to, in that consideration, we have to meet 
treaty obligations, we have to meet ESA, we have to meet Delta 
protections, we have to do all of these other things. I 
appreciate people don't like that. And discretion will play a 
role in that. There are determinations that the secretary can 
make about various aspects of that.
    Mr. Moss. Absolutely.
    Mr. Miller. But somehow blowing up this process, as Mr. 
Bamert suggests, Bamert suggested that we would all be better 
off with this. I would like to know how. He may think he's--he 
is better off, but in terms of a State of 30 million people, 
does anybody really believe that this would be a step forward, 
just to walk away from CALFED or the follow-on policy 
considerations that are now being made by the Governor and the 
Secretary of the Interior? Where would you then get them 
reengaged in this process? Start out in the courts?
    Mr. Moss. As I stated in my remarks, CALFED has to be a 
success. We have no choice. Again we have watched with great 
angst, as you noted, the deliberations between the State and 
the Federal Government, and quite frankly view this process 
here today as an opportunity to provide the negotiators with 
some standards that we think need to be the outcome of CALFED.
    Let me clarify my remarks relative to the Environmental 
Water Account. The Environmental Water Account is a good idea. 
We support it. We think there is a lot of merit there. I guess 
what I am real concerned about at this point, and I heard Mr. 
Hannigan say it again a short while ago, that without having a 
threshold of 400,000 acre-feet in this Environmental Water 
Account that we are not going to get any kind of regulatory 
certainty. We have to have a threshold of an additional 400,000 
acre-feet in this account, otherwise we are not going to get 
certainty. And that, because of the volume, because of the 
size, is not realistic. So if that is the threshold, then the 
environmental water account will fail, and then we are back to 
pure regulatory regime which, for the water users in the CVP, 
is one of additional shortages.
    We support the idea of an Environmental Water Account. We 
think it's a great idea and look forward to helping----
    Mr. Moss. I would just respond I appreciate that. And it 
may be that if people really want the full regulatory relief 
that they think they can envision with an environmental water 
account, there clearly, just, you know, when you match it 
against the wall, it is going to have to be very real. It can't 
be a phony account. It can't be paper water, it can't be this, 
it can't be that. That is why Mr. Hannigan is going to go out 
and others are going to go out and scour the State to see 
whether or not it can be assembled. And that is not necessarily 
good news for everybody in the State. But the fact of the 
matter is that is what they have to create, a real account. 
Whether it can rise to 400,000, whether that is sufficient or 
insufficient or what have you will obviously clearly be tested. 
But the hope is that that removes both of these systems from 
the kind of piecemeal, regulatory impact lawsuits that you can 
get into that so far we have been able to avoid because we have 
had agreement about moving this process forward. And now the 
process is stalled out at one level and now the Governor and 
others are trying to move it forward. It is a high-risk thing 
for them to do. I admire that they are doing it. But it is very 
high risk. But if they didn't do that, we would be stalled 
here, and we would get a record of decision that nobody 
supports, and then we would be back in all of our old problems, 
and at some point, somebody is going to go ask EPA to do their 
job.
    Mr. Miller. I would suggest to you the place to find the 
water is going to be in new storage, and that is the conclusion 
that I have come to and my constituents have.
    Mr. Miller. But understand, if I just might, Mr. Secretary, 
I mean, Mr. Chairman----
    [Laughter.]
    Mr. Miller. George Bush wouldn't make you secretary, would 
he?
    [Laughter.]
    Mr. Miller. Rumor, rumor, rumor.
    [Laughter.]
    Mr. Miller. We just had a discussion here about what 
Metropolitan Water District did. They now are spending what 
looks like $3 billion because somebody there made a decision. 
And at one point people agreed, and I don't know if everybody 
agrees now, but this was a way that they could provide some 
operational flexibility to their system.
    Contra Costa Water District did the same thing to provide 
operational flexibility, not in terms of yield, but just in 
terms of water quality. Now we are talking about surface 
storage, and you talk about surface storage for multiple 
reasons: A community believes they are going to get yield out 
of that. Most economists and others that look at that say 
nobody could buy that water if you were going to get yield. 
Some people say, well, this storage is really about the 
environmental account because it gives us flexibility in moving 
water through the Delta and elsewhere, that there are some 
components of that.
    So when we talk about surface storage, there is something 
in the eye of the beholder here, depending where they reside in 
the State, and some of it may be affordable and some of it 
isn't again affordable. I mean, we have an agriculture 
community that very soon or currently is engaged in 
negotiations and is going to have to figure out how they 
amortize the remaining cost of the CVP between now and 2030. 
That is a lot of money. That is a lot of price and water. And 
now you want to take on the additional burden of storage?
    Well, what I have heard from the agriculture community is 
that they are not going to pay for that. Well, we started out 
operating here the beneficiary pays. Now, I appreciate we can 
make more and more look like flood control and more and more 
look like environmental water, but at some point if somebody 
has expectations of yield, they have got to belly up to the bar 
and pay the money. And that turns out to be real expensive 
water.
    Mr. Moss. I think a lot of this goes back to the definition 
of baseline, and that is one of the reasons why it makes it so 
important as to know where it is we are building from. Because 
you are absolutely right.
    Mr. Miller. Where you are building from is you want relief 
from the regulatory operations. And so the baseline is 
interesting and the running out the 1994 Accord is interesting, 
it is just not relevant very much to what the burdens of the 
system are.
    Mr. Moss. Well, it is relative to who shares the cost. 
Because if we are getting back the water to the CVP that was 
leant for environmental restoration and stabilization of 
endangered species, then that cost of developing that water 
should be a broad spread cost that goes to the community----
    Mr. Miller. Well, then the cheapest way to do that would be 
in contract negotiations, just act like a banker and say, 
``Here's the new terms and conditions.'' Because that water 
belongs to the Federal taxpayer, and before we ask them to put 
up a couple of billion dollars, many billions of dollars, maybe 
we ought to just renegotiate the contracts and they can put the 
water that way.
    Mr. Moss. Well, we are in the middle of that right now. And 
certainly water costs are something that we are all very 
cognizant of as part of those negotiations and are on track to 
meet the demands of Congress of having the CVP fully repaid by 
the year 2030. I mean, that is something that everyone has 
accepted.
    Mr. Doolittle. Mr. Pombo is recognized.
    Mr. Pombo. Mr. Hannigan, I think it is important that I 
clarify--and I intended on going into a different line of 
questioning, but I think it is important that I clarify what my 
concerns are in terms of offstream, onstream groundwater 
storage. Every project that has come along in the time that I 
have been here, there has been opposition to it, regardless of 
what it was. I had a very small groundwater recharge project in 
my district that the environmental community opposed, and one 
of my state senators opposed doing that, and it had severe 
environmental concerns because of the saltwater intrusion into 
my district.
    It does not matter what we propose, there is going to be 
opposition to it. And as we have gone through all the billions 
and billions of dollars that we have talked about and spent, 
there is always this promise that we are going to do this stuff 
now, but we are going to take care of storage in the future. We 
are not ruling out storage, offstream, onstream, groundwater 
recharge, we are not ruling it out, but we are going to do it 
in the future. But every time we bring up a storage project, 
there is opposition to it. ``Well, you can't do it. You can't 
do it now. It is too tough. You can't do it now.'' But when you 
talk to a lot of people--and I am not going to put you in this 
basket, but a lot of people say, ``Well, we just need to do 
more conservation.'' We have got our farmers operating on about 
half the amount of water they had before. How much more 
conservation are you going to get out of them?
    We have got, at least in the northern part of the state, 
every time there is a reduction in water, our city has gone to 
water rationing. I had the good fortune of sitting on a city 
counsel when we had to tell people that they can only use half 
as much water, and at the same time that other parts of the 
state didn't know what water rationing was.
    But if we are going to solve this problem, storage is going 
to have to be part of it, and at some point somebody is going 
to have to stand up and say, ``Yeah, we are going to have to do 
storage.'' And it just seems like every time it is brought up, 
there is a reason why we can't do it, and that is a big concern 
to me.
    But the question I wanted to ask you had to do with 
accountability of spending money. I think that Congress is 
abdicating its responsibility in oversight of how US taxpayer 
money is being funded when it comes to CALFED, because we have 
no control, no say-so over how that money is being spent, and 
we are putting up tens of millions of dollars a year into the 
CALFED process, and as of yet, I have been unable to receive 
any kind of a list of projects that say this is what--we want 
money, and this is what we are going to spend it on. When I ask 
for a list of projects that this money is going to be spent on, 
I get a list from 2 years ago, ``This is what we spent the 
money on'', and I get a list of potential projects. And when I 
ask, ``Will the projects that we are going to spend money on 
come from this list?'' And the answer is, ``No, not 
necessarily. It may come from another list, but these are the 
ones that we have got right now.''
    And my question for you is would you with the Governor 
support a reauthorization proposal that actually puts it back 
on the policymakers in terms of these are the lists of projects 
that we are requesting and this is the amount of Federal money 
we want to fund those projects?
    Mr. Hannigan. Yes.
    Mr. Pombo. Because I believe that if CALFED is 
reauthorized, at least in my mind, it would have to have that 
component within it.
    Mr. Hannigan. I outlined in my initial statement that 
Secretary Nichols presented a proposal with the extension of 
the CALFED authorization that would include a process that gave 
Congress, the legislature, who would have and does have the 
same interest, a method, an ability to measure the 
accountability of those resources. Let me----
    Mr. Pombo. Let me stop you there. It is my understanding 
that the proposal that was put forth was a quarterly report on 
it.
    Mr. Hannigan. Correct.
    Mr. Pombo. And that is better than what we are getting. I 
will grant you that is better than what we are getting, but I 
can't think of any other projects where a state comes to 
Congress and says, ``Give us this money, and trust us, we will 
spend it right.'' And there has to be a list of projects when 
you are asking for the appropriation.
    Mr. Hannigan. I don't see any problem with Congress having 
as much review, accountability type review of what CALFED does. 
That's up to you to decide in the course of your work here on 
the subcommittee.
    Let me just touch base on the storage, because when we had 
this conversation earlier, I failed to mention the number of 
short-term--we consider short-term to be the 5, 7 years, the 
first phase of CALFED's record of decision, and we're 
discussing storage possibilities, storage projects that would 
come online in the short-term, things like Los Vacaros, things 
like groundwater storage in a variety of locations, things 
like--I don't know if Shasta would come online in 5 to 7 years, 
but raising the Shasta 6 and a half feet, or Friant, and those 
are not going to be without opposition, they're not going to be 
without the possibility of lawsuits. It's not like we're 
measuring those projects on whether or not there's going to be 
opposition. I don't want to leave you with that impression. We 
recognize that everybody is not going to be happy. In fact, my 
personal opinion is, is that the first 4 to 5 years of CALFED's 
existence has depended on everybody being too happy to really 
get any hard decisions.
    Mr. Pombo. As you are well aware, there is no project that 
is not going to be with opposition, and none of the ones that 
you have mentioned so far is opposition free, but I think that 
the chairman's point in regards to Auburn Dam, was if you are 
looking at cost and return, it is his opinion and my opinion 
that for the cost, we get a greater return from Auburn than all 
of these other projects that we are talking about doing, and 
that is why it doesn't make sense to put all of these others in 
front of what may be a better return on the cost. And because 
there is opposition, organized opposition to Auburn, it does 
not mean that we shouldn't do it, because there are--every one 
of these projects there is opposition to and there will be 
lawsuits to, and just as there was with Los Vacaros.
    Thank you, Mr. Chairman.
    Mr. Doolittle. Thank you. Mr. Radanovich is recognized.
    Mr. Radanovich. Thank you. Before I get into my comments, 
the only thing that I would say is that I agree with the two 
previous speakers, that in all the best, I think, most 
efficient water solutions to California's water problems like, 
I believe to be Auburn Dam and also the Peripheral Canal--I 
know that is words that we shouldn't mention--are both cost 
effective and are really the best solutions to California's 
water problems. But the problem is that they are not 
politically expedient, and that is what--maybe we need some 
leadership in facing up to these realities.
    But I guess my main comments that I wanted to make were 
though that I believe--and I think a lot of people would--was 
that the new shift, the relatively new shift in priorities for 
California water away from urban and ag. and beginning to 
include environmental uses, I believe, and again, most people 
believe, should never have been into effect or taken their form 
in the CVPIA and increased regulatory aspects of the ESA until 
there was increased water storage online. And I think because 
that did not happen at the same time, it has caused us a lot of 
short-term problems and has created this issue and this need 
for regulatory relief.
    What somewhat concerns me about this process, where it is 
right now, is that I think, or I would caution the 
decisionmakers not to do this, to try to think that the promise 
of specifically identifying increased storage sites is going to 
alleviate the problem of short-term relief, because that is an 
issue that needs to be dealt with separately, and I think I can 
speak for urban and ag. users by saying that the promise of 
quickly arriving at new storage sites is not going to solve the 
problem. And so I hope that those that are making these 
decisions are not intending that to be--the solution for that 
problem without specifically addressing the urgent need for 
short-term relief. I think it should be widely accepted that 
those administrators that are administrating the current law, 
can't be trusted with this wide discretion of legal 
implementation of this thing. And so I guess it goes back to 
my--the main statement that I believe, and that is that this 
project would not--will not and should not go forward until 
there is specific agreement on what we can expect from now for 
the next 5 to 7 years when Shasta is raised or Friant's raised 
or something else, unless it is specific, it is in law, and 
everybody has an expectation as to what it would be.
    And I don't really need a response. I just wanted to make 
sure that you all knew where I was coming from. And I used less 
time.
    Mr. Doolittle. Thank you.
    Mr. Radanovich. You are welcome.
    [Laughter.]
    Mr. Doolittle. Do you reserve or yield back the balance of 
your time?
    Mr. Radanovich. I will yield it to the chair.
    Mr. Doolittle. Thank you. I will keep it in reserve.
    Mr. Herger is recognized.
    Mr. Herger. Thank you, Mr. Chairman, and I would like to 
begin with requesting consent of the committee to have a 
statement put into the record.
    Mr. Doolittle. Yes, that has already been approved, so your 
full statement will be included.

 STATEMENT OF HON. WALLY HERGER, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Herger. Thank you very much, and I thank you, Mr. 
Chairman, and members for allowing me to sit on the panel 
today. And it is good to see you again, Mr. Hannigan from our 
former life back in the State Assembly some years back. Thank 
you very much for working with us on this issue, which is so 
incredibly important, and I say that. So often as I hear what 
seems to be taking place with CALFED, it seems like--which we 
need to be doing, spending a tremendous amount of time on the 
environment, which we have to do. But my concern is we seem to 
be overlooking the fact that we have live people, families, 
men, women and children that are involved in this as well, in 
this process, and I am speaking as an individual who was born 
and raised in Northern California in a ranching background, 
grew up where my father grew up and where my grandfather lived.
    And my memories of growing up, No. 1, when I was 5-years-
old, of having our area flooded, our home flooded. Five years 
later, 1955, I have seen all of Yuba City, the town of Yuba 
City flooded; 37 people drowned. All the area from Yuba City 
all the way to Sacramento basically, Feather River at that 
time, all flooded, just flooded just below where I lived at 
that time. Again, just a couple of years ago in 1997, a levy 
break again there. Three people drowned, lost their lives again 
here.
    And we seen to have feasts or famines in our area as far as 
water is concerned. It is either too much or not enough. I also 
recall on our ranch, going through the drought times, the times 
before our onstream storages, thank goodness, that we were able 
to put in, when we would sink our wells down every year. It is, 
you know, which farmer would have his well the deepest? Because 
the ones who didn't would be the ones that would run out of 
water. We have, for the most part, water until we get into the 
4 and 5-year droughts which we have seen also here just in the 
last decade, so it is incredibly crucial, life-taking type of 
issues that we are talking about in addition to the economy 
that we are talking about.
    And as undoubtedly you sense here, is that there is a 
tremendous amount of frustration from those of us who live in 
this area. We had high hopes to begin with. CALFED was 
something we were going to come together and work something out 
to say--we put men on the moon; we can surely take care of 
these problems, but yet again, it seems that the extremists 
within the environmental movement seem to have one way of doing 
things, and that is, just take our water, those of us in the 
north, remove it from the farmers, and, you know, it doesn't 
matter if three people drown or so on--I hate to put it that 
way, but I don't know any other way how you can look at it than 
that way, from those of us who live there.
    [The prepared statement of Mr. Herger follows:]

      STATEMENT OF HON. WALLY HERGER FROM THE STATE OF CALIFORNIA

    In November of 1998 the California Department of Water 
Resources issued a Water Plan Update known as Bulletin 160-98. 
I would like to begin my comments by citing a passage from the 
executive summary of this document.
    ``Bulletin 160-98 estimates that California's water 
shortages at a 1995 level of development are 1.6 million acre 
feet in average water years, and 5.1 million acre feet in 
drought years . . . Bulletin 16098 forecasts increased 
shortages by 2020--2.4 million acre feet in an average water 
year and 6.2 million acre feet in drought years.'' (Executive 
Summary, California Water Plan Update, Bulletin 160-98 at ES 1-
2.)
    California's increasing population is the driving force 
behind these increasing water demands. Projections indicate 
that an additional 15 million people will move to California by 
the year 2020--equivalent to the populations of 8 western 
states: Arizona, Nevada, Oregon, Idaho, Montana, Wyoming, New 
Mexico and Utah.
    These figures are cause for grave concern. While CALFED is 
primarily tasked with addressing the critical needs of the Bay-
Delta, it is clear that when it comes to water, everything is 
connected to everything else. We cannot address the very real 
and critical environmental needs of the Bay-Delta without 
taking a comprehensive approach.
    CALFED representatives have often stated that there is no 
single ``magic bullet solution'' to California's water woes. I 
agree with this assessment. The problems are complex, and the 
solutions will be varied and complex. However, CALFED also 
maintains that it is ``Premature'' to make any hard and firm 
plans for storage. I profoundly disagree. Given the scope of 
the projected water shortages, it is glaringly obvious that we 
must put more water into the system if we are going to have any 
hope of avoiding chronic and potentially debilitating water 
shortages. Issues of ``process'' should not be used to paper 
over the extremely obvious reality that California needs 
additional water now, and that this water deficit will only be 
exacerbated as the state gains a projected 15 million new 
residents by 2020.
    Bulletin 160-98 notes that ``water management options 
identified as likely to be implemented could reduce those 
shortages to 200,000 acre feet in average water years and 2.7 
million acre feet in drought years.'' (Executive Summary at ES 
1-2.)
    But the questions remain, how and when, exactly?
    DWR states that ``new storage facilities are an important 
part of the mix of options needed to meet California's future 
needs.'' (Executive Summary at ES5-13.) But where will this 
storage come from if CALFED is going to wait until the effect 
of stage I actions is determined? In fact, Bulletin 160-98 
states, ``Given the long lead time required for implementing 
large storage projects, no CALFED facilities may be in service 
within the Bulletin's 2020 planning horizon.'' (Executive 
Summary at ES5-9.)
    This storage will not materialize out of thin air. Are we 
to presume that private parties or local agencies are going to 
somehow create this body of stored water? How can this phantom 
storage be counted as ``likely'' for planning purposes? This is 
akin to a college student presuming it is ``likely'' that he 
will win the lottery to finance his education. Misplaced 
optimism is no virtue.
    While CALFED representatives have consistently stated that 
increased storage must be part of the equation, I have seen no 
meaningful evidence that storage is being vigorously and 
actively pursued as a pressing and urgent goal. Indeed, 
Bulletin 160-98 leads me to believe that, rather than the 
``likely'' development of storage, CALFED's current direction 
virtually guarantees that storage is highly unlikely for 
another two decades.
    I am frankly exasperated by this continuous foot-dragging, 
dithering, and paralysis. As a native of Northern California, I 
know the question is not a matter of if we are going to have 
another drought, but when.
    While I support prudent water conservation, we must face 
the fact that we are quickly reaching the practical limits of 
water conservation strategies, many of which have been in 
effect for decades. Looking to conservation as the solution to 
each of our legitimate water needs--as is often the mantra of 
the extreme environmental community--is shortsighted and 
irresponsible. And we cannot just ``take the water from 
agriculture.'' Unfortunately, there is no way to grow food 
without water. As such, taking water from agriculture would 
severely impact California's $30 billion agriculture economy. 
Destroying California's agriculture industry, which provides 
nearly one out of every ten jobs in our state, is not a 
reasonable solution to our water problems.
    Further dividing the already inadequate water supply is a 
non-solution. We must have additional water storage in order to 
meet our needs in a responsible, realistic, and comprehensive 
fashion. This Congress should be extremely reluctant to 
continue supporting CALFED unless we see an unambiguous and 
immediate commitment to significant water storage--in the 
millions of acre-feet. Indeed, precisely because DWR is correct 
in identifying the ``long lead time required for implementing 
large storage projects,'' the time to act is now, not some year 
in the distant future.
    It is my understanding that negotiations are ongoing 
between the Secretary of the Interior and the Governor of 
California to develop a solution for long-term implementation 
of the CALFED program. Given the shortages that face us, 
however, any proposed CALFED Agreement that does not provide 
for genuine increases in total water storage for the future 
will not be acceptable. Moreover, any Agreement that does not 
improve water supplies in the short term, and that does not 
provide regulatory certainty, is also not acceptable.

                                ------                                

    Mr. Herger. And so just looking, some of the frustration 
with this CALFED process, if I could ask you to begin with, Mr. 
Bamert, someone who is representing the counties in our area, 
could you tell me, on this CALFED project, which as Mr. Pombo 
pointed out, we are not just spending tens of millions; we are 
spending potentially hundreds of millions of dollars, and we 
have a right as taxpayers, as representatives, to demand a 
little result, I would guess. That is our fundamental 
responsibility. And if I could ask you, to what extent has 
there been input from our local governments there in our 
northern areas on our Bay-Delta programs that we have come up, 
just in general?
    Mr. Bamert. Well, we have had some input on the BDAC 
Committee. Robert Meacher from Plumas County has been on that 
committee for a number of years. We have had input from John 
Mills, our consultant for RCRC on the Ecosystem Restoration 
Round Table. And we've been feeling pretty good about the input 
from our counties for quite a while, but in recent months, it 
seems like the decisions and the discussions have gone out of 
the public eye, and we're sitting out here wondering what's 
going on, so that does concern us quite a bit.
    Mr. Herger. And you are being very kind. I mean, talking to 
these same counties that I represent, what I hear is tremendous 
frustration.
    Mr. Bamert. Yes.
    Mr. Herger. Input being put in, but now that we are 
beginning to come down with the plan, it seems like this input 
has virtually been ignored to a very major extent. Tremendous 
amount of concern in that area.
    Now, Mr. Hannigan, if I could, from this, the California 
Water Plan Update, which is the latest, came out in 1998 by the 
California Department of Water Resources, Bulletin 160-98. In 
it they talk about the water shortages that are coming up.
    Mr. Hannigan. Right.
    Mr. Herger. As a matter of fact, quoting from it, it 
mentioned that they are predicting the equivalent population 
growth over the next couple decades. They mention the 
equivalent of eight western States, and they mention Arizona, 
Nevada, Oregon, Idaho, Montana, Wyoming, New Mexico and Utah, 
the equivalent of the populations of those states moving into 
California over the next 20 years by 2020. So think about the 
water problems we are having now, what we are going to have in 
2020.
    Mr. Hannigan. Or being born there. I don't think they were 
all coming in from other states, but you're right.
    Mr. Herger. I didn't word that properly. The increase in 
the population in the State of California, being born there or 
however.
    Mr. Hannigan. Right.
    Mr. Herger. And they went on to mention in your agency's 
report, that they were predicting, your----
    Mr. Hannigan. We are.
    Mr. Herger. Is predicting a 2.4 million acre-feet average 
deficit on an average year, water year, and a shortfall that 
could mushroom to 6.2 million acre-feet in a drought year, 
incredibly huge numbers.
    Mr. Hannigan. Right.
    Mr. Herger. That your department is projecting. And I would 
like to ask, is that under the full implementation of this 
CALFED preferred alternative, what would be the magnitude of 
these shortfalls under an average year and under a dry-year 
condition with these hundreds of millions of dollars that we 
are currently projecting to put into this program.
    Mr. Hannigan. Right. Thank you for answering my question, 
the question that was asked of me by Mr. Pombo, about how much 
was the shortage. It's in that range of up to--I think it's 2 
to 4 million, depending on the hydrology. That document, that 
report does not reflect a CALFED decision. So anything that 
occurs as a result of the record of decision and implementation 
will lessen the impact of that shortage.
    Mr. Herger. And my question is: how much will it lessen? 
That is my question.
    Mr. Hannigan. Well, in excess of a million acre-feet of new 
water will be produced, developed as a result of a record of 
decision.
    Mr. Herger. So we are spending in the hundreds of millions 
of dollars, I think right now about half a billion dollars 
right now. They are projecting on an average water year, we are 
going to be short 2.4 million--that is not a drought year, that 
is an average year. So you are saying then minus 1, minus 2.4, 
we are still going to be almost 1-1.2 million acre-feet short 
even on an average year by what we are doing?
    Mr. Hannigan. Well, that--I don't think you can quantify 
it----
    Mr. Herger. These are the numbers in your report.
    Mr. Hannigan. I understand, I understand, but I don't think 
you can quantify it given a CALFED decision by those numbers, 
because in addition to the new water supply, there will be new 
methods of better using the water that we already have. So that 
further lessens the gap between what we have and what we need. 
So I don't--you know, unfortunately, that document does not 
reflect what a CALFED decision----
    Mr. Herger. Right. Well, with everything that has been 
proposed then, and I believe there is a limit--and as a matter 
of fact, let me quote another part, read from here on page EF5-
13. Clearly, conservation--I think you are alluding to other 
things such as conservation, another thing we can do----
    Mr. Hannigan. Well, conservation and better management----
    Mr. Herger. Recycling.
    Mr. Hannigan. --of existing flows and----
    Mr. Herger. Right. But reading from your document here, 
``Clearly, conservation and recycling alone are not sufficient 
to meet California's future needs. New storage facilities are 
an important part of the mix and options needed to meet 
California future needs.''
    Mr. Hannigan. Right.
    Mr. Herger. Specifically, what are these new projects, and 
how much will they hold and----
    Mr. Hannigan. I can cite--you know, the department is in 
the process of undergoing a study as part of CALFED called the 
Integrated Storage Investigation, ISI, and we are charged with 
a significant portion of that study. CALFED itself is doing 
some of the work. But for example, we're expending a 
significant amount of money up in your area studying sites. And 
we are looking at in-delta potential. We are looking at below 
the pumps, below the delta ground storage, conjunctive use kind 
of storage. I think in total it's a process that started with 
about 50 or more possibilities, if you will, and it's winnowed 
down now to less than a dozen.
    Mr. Herger. And you did mention the raising of Shasta.
    Mr. Hannigan. Shasta, that's correct.
    Mr. Herger. Which is in my district, and sites is in our 
area, but in Mr. Ose's district. I hope we are not also 
forgetting about the--and these are multiple use too. It helps 
us on flooding, Oroville raising perhaps----
    Mr. Hannigan. Right.
    Mr. Herger. --and also Bullage Bar [ph].
    Mr. Hannigan. Right.
    Mr. Herger. Which are also in a hurry.
    Thank you very much.
    Mr. Doolittle. Thank you. Mr. Condit is recognized.

STATEMENT OF HON. GARY A. CONDIT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Condit. Thank you, Mr. Chairman. I will be brief. I 
know we have a time problem, but I do want to thank you, Mr. 
Chairman, for allowing us to sit in on the hearing today. That 
was very kind of you, and for the committee members to share 
their time with us.
    I also want to just speak up--which he needs no one to 
speak up for him, but Mr. Hannigan, who has a distinguished 
career in the California legislature, has been a strong 
advocate for developing a fair and balanced approach to a total 
water policy for California, and he is absolutely correct. I 
believe that the state team that the Governor has put together 
has been productive, and has helped clarify some of the issues 
that we need to resolve, so I think there is some hope there 
that we can come together.
    All of us share frustration with the CALFED process, and 
coming up with a water policy, a total policy for California. 
It is an under statement to say that we are not a bit stressed 
by doing that, but any of us who have served any time in 
Congress knows any time that you develop comprehensive policy, 
along with that comes frustration.
    But the way you get there is stick to the task, and the 
only thing that I would say is that we ought to stick to the 
task of CALFED no matter how frustrated we are, because if we 
don't, there is a road map to nowhere if we let CALFED crumble, 
and we will have no water policy. What we will end up having is 
finger pointing and blaming, and everyone staking out a 
position that they know ultimately won't work.
    What I think we need to do is stick to the task, understand 
in the end we probably aren't going to get everything that we 
want, but we will get is a good deal for the total of the State 
of California.
    So that is really all I have to say. I am committed to do 
that. I am committed to work with the state and the feds to see 
that that happens, and my colleagues sitting here, and once 
again, Mr. Chairman, I thank you and Mr. Dooley for allowing me 
to be here today.
    Mr. Doolittle. Thank you. Mr. Ose is recognized.

 STATEMENT BY HON. DOUG OSE, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF CALIFORNIA

    Mr. Ose. Thank you, Mr. Chairman. I also want to recognize 
the time constraints that we are working under, and express my 
appreciation to you for including us from off the committee in 
this hearing. I feel a little bit like the guy at the end of 
the canal here, with time being the equivalent of water, I 
guess.
    I want to reiterate my understanding that we are here to 
talk about CALFED. We are in a situation, as we talked, that 
the issues of water go beyond just CALFED and its immediate 
charge, and that is probably what you hear reflected in many of 
the comments up here.
    If I could, Mr. Chairman, I would prefer, given the time 
constraints, to submit whatever questions I have in writing, 
for a response by the witnesses, and with that, I yield back.
    Mr. Doolittle. Thank you. And, please, submit whatever you 
would like to in writing, and I am sure that we will get an 
expeditious response.
    Mr. Doolittle. Well, the first panel has taken about 2 
hours and 45 minutes. At this rate it will be nearly 6 o'clock 
before we are done, which is after our flights leave, so we are 
going to have to--we have done it to ourselves, but it has been 
an important, a very important issue. Many of our members have 
had extensive questions to ask, great interest in this, and so 
we appreciate the members of this panel, and you will not be 
excused and asked to reply expeditiously to the supplementary 
question that we tender to you in writing. Thank you very much.
    Mr. Doolittle. We will continue going until the votes 
interrupt us, and with that, I would encourage the members of 
panel No. 2 to come forward, if you would remain standing for 
the oath. Raise your right hands, please.
    Do you solemnly swear or affirm under the penalty of 
perjury that the statements made and responses given will be 
the whole truth and nothing but the truth?
    Mr. Nomellini. I do.
    Mr. Yardas. I do.
    Ms. Southwick. I do.
    Mr. Hayes. I do.
    Mr. Doolittle. Thank you. Let the record reflect that each 
answered in the affirmative.
    Ladies and gentlemen, please have a seat. This is the 
second time that Mr. Hayes has had to rearrange his personal 
plans because of the committee's schedule, for which I 
apologize. Out of accommodation to him, at least of some small 
measure, we are going to go with you first, Mr. Hayes.

 STATEMENT OF DAVID HAYES, DEPUTY SECRETARY, DEPARTMENT OF THE 
 INTERIOR, WASHINGTON, D.C.; DANTE JOHN NOMELLINI, MANAGER AND 
 CO-COUNSEL, CENTRAL DELTA WATER AGENCY, STOCKTON, CALIFORNIA; 
  DAVID YARDAS, SENIOR SCIENTIST, ENVIRONMENTAL DEFENSE FUND, 
 OAKLAND, CALIFORNIA; AND BRENDA SOUTHWICK, ASSOCIATE COUNSEL, 
   CALIFORNIA FARM BUREAU FEDERATION, SACRAMENTO, CALIFORNIA

                    STATEMENT OF DAVID HAYES

    Mr. Hayes. Thank you, Mr. Chairman.
    Mr. Doolittle. Mr. Hayes is obviously our Deputy Secretary 
of the Department of the Interior.
    Mr. Hayes. Thank you. My wife will be sending a note, Mr. 
Chairman.
    [Laughter.]
    Mr. Hayes. I have submitted written testimony for the 
record and I ask that it be admitted.
    Mr. Doolittle. Yes, it will be.
    Mr. Hayes. Thank you. With that, I will be brief. I would 
like to just make a few points about the CALFED process that I 
hope are responsive to the committee's interest.
    First of all, the Secretary, Secretary Babbitt, and I are 
very engaged in CALFED. This is certainly among the 
Department's top three priorities at this time. We are putting 
an extraordinary amount of time into it. It is a signature 
project, I think, for water management for the country in terms 
of stakeholder involvement. The incredible effort that has gone 
into this process over the last 5 years is truly remarkable. 
There has been an enormous progress made, we think, under the 
accord in terms of studying the water future for California, 
evaluating the need for environmental restoration, in fact, 
kicking off in a very meaningful way some of those restoration 
activities.
    And in that respect, the environmental restoration project 
aspect of the CALFED process is remarkable in that stakeholders 
have had the key decisionmaking authority, essentially, to 
steer money toward appropriate projects, and, in fact, the 
great bulk of money that has been authorized has already been 
committed to specific projects that have come through the 
stakeholder process. That money is being put to use 
productively. It is not being spent willy-nilly. Many of the 
projects are long-term projects, which is why the dollars are 
not all out the door yet, but the vast majority of them are 
committed, as discussed in my testimony.
    We are entering a very critical stage in CALFED, Mr. 
Chairman and members of the committee. As has been referenced 
before, Secretary Babbitt and I are meeting with members of the 
State team to see if the two major water purveyors, if you 
will, in the State involved in CALFED can reach some common 
understandings. We understand that nothing we do can happen 
without the full involvement of stakeholders and we are 
committed to have stakeholder involvement.
    I can report to you, Mr. Chairman, I have heard no 
surprises here today. We are meeting with all these 
stakeholders on a regular basis. We are aware of all of these 
issues and we recognize the importance of taking into account 
stakeholder concerns in any solution that is proposed.
    What Secretary Babbitt and I want and what I think the 
Governor wants is not a record of decision that is not going to 
be a meaningful record of decision. We could go that way. We 
could have a programmatic EIS and a record of decision that 
talks in broad, unspecific terms that really do not come to 
grips with the problems of California that they are faced. We 
are not inclined to do that. We want to make some of the hard 
decisions, and that is why we are engaged in the discussions 
with the Governor and his people now and why we hope to soon go 
forward and talk to more stakeholders about concepts that are 
being discussed now with the Governor.
    We think that we are on a schedule to work toward a record 
of decision this summer and a final environmental impact 
statement that will accompany the record of decision. We look 
forward to a solution that will provide long-term stability for 
the environment and for water users, both urban and ag. We 
understand the importance of solving all of those issues as 
part of any comprehensive solution.
    In that regard, we are requesting and recommending and 
hopeful that Congress will look toward continued authorization 
of CALFED, not for authorizing new money--we have got an 
appropriate amount of money already authorized--but to continue 
the funding beyond the current fiscal year.
    I will close there, Mr. Chairman, in view of the time. 
Thank you.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Hayes follows:]

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    Mr. Doolittle. Our next witness will be Mr. Dante John 
Nomellini, Manager and Co-Counsel of Central Delta Water Agency 
from Stockton. I would just observe parenthetically, years ago, 
on a cold, foggy morning in the early 1980's, Mr. Nomellini 
gave me my first tour of the delta. Mr. Nomellini?

               STATEMENT OF DANTE JOHN NOMELLINI

    Mr. Nomellini. Unfortunately, Mr. Chairman, too many years 
have passed with this involvement in water and I have been 
accused of being very clear in my positions on the subject and 
there is no misunderstanding.
    In any event, for those of you that do not know me, I am an 
attorney for the Central Delta Water Agency. Our agency has 
120,000 acres of primarily agricultural land in San Joaquin 
County in the central part of the delta. We were not part of 
the stakeholder process on the delta accord. We have serious 
structural concerns with CALFED, the most important of which is 
the involvement of the State Water Resource Control Board, 
which is our judge in water rights. We think there has been a 
serious violation of fair play and due process by including a 
judge-type agency as a part of a negotiating body that 
negotiates in many cases in private.
    We also see a problem--in our view, the State of California 
and the Bureau of Reclamation are carrying the hod for 
exporters from the delta. They run the projects that export 
from the delta. So when we have a confrontation, we are 
fighting our own government, both State and Federal. Along with 
that comes a certain amount of conflict of interest, because 
people who propose things tend to defend them and support them.
    The basic underpinnings for both the Central Valley Project 
and the State Water Project are, in our opinion, clearly set 
forth in law, and that is that only surplus water should be 
exported. These projects are not supposed to take water away 
from the people in Northern California. They were supposed to 
take extra water. Now, there have been a lot of changes that 
have occurred, even since Mr. Doolittle and I went out in the 
boat. There is a great deal of environmental concern that was 
not there before. We have endangered species. Some, I would 
argue, are based on flaky facts, but there are numerous 
endangered species that have to be contended with.
    We think the principle of protecting the areas of origin 
and coming up with a plan to develop the supplies for all of 
California is the right way to go. The current thrust of CALFED 
is the same as it was back at the time of the accord, and that 
is to try and say, OK, there is no net loss to exporters. That 
is the deal. We are going to get the water for the environment 
somewhere else. Where are you going to get it? You get it out 
of the watersheds of origin. That burden does not go away. The 
regulatory burdens stay and they fall on the areas of origin 
and we think that is wrong.
    We hear figures that we have given up, from the water 
contractors, we have given up a million acre-feet. In our view, 
that million acre-feet was not theirs. It is not theirs. The 
pecking order had been established. There is an attempt to 
overturn that pecking order, and in the case of the delta 
accord, they actually made a deal that the water would be taken 
out of the watershed, and, in fact, we have got water that was 
taken away from Stockton East and Central San Joaquin and San 
Joaquin County for fish flow purposes on the San Joaquin and we 
are many, many years away from knowing what the impacts are on 
fish in order to set some kind of a threshold of no surprises. 
There is not an adequate evidentiary base.
    So we are eager to help. We are not negative, but we think 
we are going in the wrong direction. We think we have to figure 
out how to protect the future of Northern California and at the 
same time meet the supplies.
    We like what Metropolitan has done. We think the future of 
getting the water supply that we need--now, I think six million 
acre-feet is what we are talking about. You build a dam like 
Auburn, which our people support, it does not have a firm yield 
during a drought of more than a couple hundred thousand acre-
feet. So if you are looking at dry year water, we have got to 
come up with some better ideas in addition.
    We think the thrust ought to be to get the urban importing 
areas with their gray water systems, their inner connections 
that were talked about, a lot of which had been done by people 
in Southern California voluntarily, desalt brackish water, if 
we have to, we desalt ocean water, but we have to get the 
redundancy in the system and our focus to think that a 
peripheral canal or some greater development in the Sacramento-
San Joaquin watershed is going to solve this problem is just 
not consistent with the facts. You could take all the water 
directly across, and instead of being six million acre-feet 
short we are going to be 5,250,000 acre-feet short. We have got 
to change direction.
    Thank you for the time. I submitted my written comments. I 
would be happy to answer questions.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Nomellini follows:]

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    Mr. Doolittle. Our next witness will be Mr. David Yardas, 
Senior Scientist with Environmental Defense. Mr. Yardas?

                   STATEMENT OF DAVID YARDAS

    Mr. Yardas. Thank you, Mr. Chairman and members of the 
subcommittee. I appreciate the opportunity to testify today. I 
will briefly try and touch on a few key points from my prepared 
statement and then leave the rest for questions.
    I want to start by thanking the chairman, in particular, 
for the request that he made of the Department of the Interior 
that finally elicited a cross-cut budget that began to shed 
light on the magnitude of the more comprehensive context in 
which the CALFED discussion takes place. In my statement I have 
provided some highlights of an analysis that is ongoing at 
Environmental Defense, which may be helpful in answering your 
initial question about the accuracy and the comprehensiveness 
of the DOI budget. Our analysis does this by expanding the 
geographic range of interest (to include a greater share of the 
Colorado River, Southern California Colorado River service 
area), by incorporating the funds enacted under the recent 
state water bond, and by taking a multi-year dimension, 
specifically looking at the time since enactment of the CVPIA 
in 1992.
    The conclusions from our analysis are many and can be 
stated in many ways, but the overwhelming impression goes to 
the issue of ``balance'' that we have been talking about today. 
We tend to focus on the ecosystem authorization under the Bay-
Delta Act that is now expired and the subject of your third 
question, but, in fact, there are a great number of 
expenditures for a lot of the things that we have been talking 
about--virtually for every area that CALFED is involved in--
where, in fact, the majority of expenditures, however you count 
it, however you slice it, have gone for those other non-
ecosystem areas.
    That has not all been under the formal CALFED 
decisionmaking process as it has evolved, of course, but as we 
reach the point of a programmatic conclusion and the launching 
of the long-term program, I think it is critical to take a 
broader view, to roll in the Army Corps of Engineers, to look 
at the upstream hydro system and really to look at all of these 
things as they interrelated to one another, and our budgetary 
analysis attempts to do just that.
    With regard to effectiveness, as I told Mr. Faber, there 
are probably about a jillion things one could say about that in 
a variety of different topic areas. My comments in the prepared 
statement focus on the area I know best, which is the 
appropriation and oversight and allocation of ecosystem 
funding, as it is called, and the financial issues associated 
with the program's so-called financial strategy.
    I am also a member of the Ecosystem Roundtable, which 
CALFED appointed in order to provide stakeholder oversight, one 
of many such members. And while I have been a strong critic 
where appropriate of that [the roundtable] process as it has 
unfolded, I think there have been dramatic and very important 
improvements as we have gone and I think there are a great 
number of accomplishments to show for what has been done in the 
short space of 3 years, while a massive planning process goes 
forward, significantly resulting in benefits that go well 
beyond the ecosystem.
    By our calculations, roughly half of the funds expended 
under the combined CVPIA and CALFED programs have gone into 
projects that involve benefits for everyone, be they fish 
screens or temperature control devices or mitigation 
responsibilities for project development and so on. So we 
believe that, yes, that has been quite effective.
    On the finance side, the program still has some work to do. 
The so-called financial strategy does not yet exist as far as I 
know. It is largely a number of questions about what ought to 
happen, rather than a well-articulated plan after 5 years of 
work for a program that has a ``stage one'' projected capital 
cost of something in excess of $5 billion. There is no way we 
will have accountability in what happens without hammering out 
some of those details and soon.
    Finally, with regard to extension of the Bay Delta Act 
authorization, for a variety of reasons--most important, 
perhaps, the pendency of the record of decision as well as the 
joint benefits that result from the program--we believe that a 
clean extension of the Bay-Delta Act for the purposes 
originally authorized makes sense. There is ample funding in 
other areas to proceed in virtually all of the areas. What is 
potentially at risk is the problem solving collaborative 
stakeholder initiatives under the Ecosystem Roundtable process 
and so that is where we believe the appropriate incremental 
funding authorization should.
    I will stop there. There is lots more to say, but I will 
leave the rest for questions. Thank you.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Yardas follows:]

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    Mr. Doolittle. Our final witness on this panel will be Ms. 
Brenda Southwick, Associate Counsel of the California State 
Farm Bureau Federation. Ms. Southwick?

                 STATEMENT OF BRENDA SOUTHWICK

    Ms. Southwick. Thank you, Mr. Chairman and members. Thank 
you very much for inviting us here today. We have an extensive 
written statement that we have submitted for the record and we 
would like that incorporated.
    I will be very brief. First, let me say by way of 
background that I have represented the California Farm Bureau 
for just over a year now, and before that, long before that, I 
spent 4 years at the Interior Department's Solicitor's Office 
here in Washington, DC., and 5 years with the Bureau of 
Reclamation. So in representing the Farm Bureau, we have some 
understanding of how bureaucracies work and we are very pleased 
that Governor Davis and Secretary Babbitt are trying to make 
some of the hard decisions that need to be made before CALFED 
can be seen by our membership as something that is actually 
going to work in the implementation stage of the thing.
    So far, we have seen a lot of process and a lot of public 
meetings all over the place, and for the most part, our 
membership is very skeptical of what the practical results of 
the CALFED process are going to be. The jury is still out, but 
if you asked most of our members today if reauthorizing CALFED 
was a good idea and giving CALFED additional money was a good 
idea, probably the answer would be a resounding no, and the 
reason for that is because while it is all well and good to 
talk about bringing balance back into the process, and we can 
all agree that certainly the environment has to be taken care 
of, there is a strong feeling among our members who are the 
people out there on the ground, they are the farmers and the 
farm workers and they are the ones with the land and the water 
is at stake, to the extent that CALFED has made acquisitions of 
land and water, those acquisitions have been made in the 
communities and among people who are members of the Farm 
Bureau.
    When we talk about accountability, we are talking about 
knowing that there is somebody that we can call in one of these 
government agencies that represents CALFED and say, this is 
what is happening. This is what I am being asked to do. I 
cannot bring a crop to market unless something is worked out as 
a practical matter to be able to do this. Who do I talk to? How 
do we work this out?
    That is the level of accountability we are talking about, 
in addition to knowing what is the basis of undertaking some of 
these actions that CALFED wants to undertake on behalf of the 
environment. Is it good credible science? Does it make sense 
when you look at some of the other things that are being done? 
Does it have other consequences if you do it this way, and has 
that been thought out?
    You have people among our members who want to see that that 
is the case. We are not seeing that right now. There is not 
that level of confidence in the decisionmaking. There is not 
that level of confidence in the CALFED participating agencies' 
understanding of what is needed. We hope to see some of that 
come out of the discussions with Secretary Babbitt and Governor 
Davis.
    Congressman Miller asked earlier as far as the--I mean, not 
Congressman Miller, Congressman Dooley asked with respect to 
the environmental water account, where is that water coming 
from? There is strong feeling among our members that the water 
is going to come from the farmers and when we talk about 
developing storage and the means of conveying that storage 
where it needs to go, in addition to conjunctive use and 
surface storage, however that is configured, that all has 
consequences for the people who own the land where those 
projects go in, who own the land where the groundwater sits 
underneath, and who have the water rights that will be 
affected.
    And what they are asking is that CALFED get grassroots 
level buy-in into these decisions about where these projects 
are going to go and how they are going to work, because nobody 
likes to feel like their life is out of control and people are 
going to come in and change their communities and take things 
from them that are critical to their existence. You cannot farm 
without the land and the water. They want to be a part of that 
decisionmaking process. We do not hear that from CALFED when 
they talk about governance. It is a big concern of ours.
    I see I am running out of time, so I will leave things at 
that and be open to questions.
    Mr. Doolittle. Thank you.
    [The prepared statement of Ms. Southwick follows:]

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    Mr. Doolittle. Mr. Hayes, we have heard it suggested that 
Interior is thinking of issuing a record of decision prior to 
completion of the environmental documentation, which I believe 
would be very troublesome. Can you commit that Interior would 
not pursue that course of action?
    Mr. Hayes. I can, Mr. Chairman. That is not a correct 
assumption. We think the environmental impact statement should 
have, obviously, a close relationship with the record of 
decision.
    Mr. Doolittle. Thank you. You have heard the discussion 
about the environmental water account. Where do you think the 
400,000 acre-feet of water would come from?
    Mr. Hayes. Well, I would like to start, if I can, Mr. 
Chairman, with expressing a bit of caution about numbers being 
bandied about, but let me talk about the concept, as Mr. 
Hannigan did.
    The concept is to build a long-term solution for the 
Central Valley, in particular, that takes the uncertainty out 
of the process for all parties, for the environmental 
interests, for the water users, ag and urban, north and south, 
and the concept of an environmental water account, which has 
been studied extensively in the CALFED process and been the 
subject of a lot of discussions, is viewed as a tool to do 
that.
    The concept of an environmental water account is not a 
static one. The notion is that water be acquired through any 
number of means, potentially through new storage, surface and/
or groundwater, potentially through new water transfers, 
potentially through water purchases, and the concept is to get 
an additional amount of water that will not come out of the 
hide of current water users but that will be available for 
environmental purposes and that will hopefully settle the 
issues of the conflicts that we are now seeing with a water 
system that is much more tightly wound.
    Mr. Doolittle. Well, you say it would not come out of the 
hide of existing water users, and I guess this gets to the 
question of baseline, but in my opinion, in a wet year when the 
people south of the delta are only getting 60 percent of what 
they are entitled to by contract, I would not want to talk 
about establishing an environmental water account until they 
were at 100 percent and then that water account would be used, 
rather than making them give up 40 percent of their water in a 
wet year. That is how I would understand that it could make 
sense. Is that how you would understand it?
    Mr. Hayes. Well, not necessarily, Mr. Chairman. The issue 
of water delivery south of the delta is a serious issue that we 
are very interested in working through. Part of the problem is 
that the water districts, some of them, at least, south of the 
delta, are the last in line of the Central Valley Project. So 
while we are providing 100 percent of water deliveries to other 
water users throughout the Central Valley Project, the 
Westlands District, in particular, being last in line, does not 
get 100 percent. But currently, by far, the great majority of 
CVP contractors are getting 100 percent of their deliveries.
    South of the delta, the issue of 60, 70 percent of 
deliveries against the contract, that is the historic delivery. 
It is extremely rare that there is 100 percent deliveries. If 
you were to look historically at the Westlands Water District's 
use of water, it is, in terms of CVP providing water, at 60, 
70, 75 percent of the contract amount. The contract amount does 
not bear a relationship to the amount of water that typically 
has been delivered.
    But we understand the importance of that issue. We are 
working very closely with Westlands. We are in discussions with 
them now. They are well represented in the Congress and we want 
to work through those issues as part of the solution.
    Mr. Doolittle. Mr. Hayes, let me go back, though. We are 
talking about 60 percent in a wet year. If they had ever 
completed the thing the way it was intended and designed, there 
is a vast additional amount of water that would have been in 
the system and I presume they would have gotten their 100 
percent historically. But in a wet year, how can we tolerate 
that they can only get 60 percent?
    Mr. Hayes. I think it is likely, Mr. Chairman, that 
Westlands will get all the water they need this year. These are 
projections through the spring that the Bureau of Reclamation 
makes every year. They are conservative projections. They went 
up 10 percent in the last month alone. It is a wet year. I do 
not think there are going to be any problems in terms of 
deliveries to Westlands.
    Mr. Doolittle. Well, do I not recall that in the previous 
wet years that they have suffered with dramatic reductions 
below what they were supposed to get?
    Mr. Hayes. There are difficulties, and that is what CALFED 
is all about. The problem is, we do not have a good 
transportation system for getting water through the delta. That 
is why the northern CVP contractors typically have no delivery 
problems whatsoever. The problem is getting the water through 
the delta and doing it in a way that is consistent with the 
fishery resource, and that is exactly what we are focusing on 
and the cycle has been focusing on through the CALFED process.
    Mr. Doolittle. Well, I do have other questions, but in the 
interest of staying on track, I am going to go to Mr. Pombo.
    Mr. Pombo. Thank you, Mr. Chairman.
    Mr. Hayes, I just want to followup on a question the 
chairman was just asking so that I can understand what your 
answer is.
    Mr. Hayes. Sure.
    Mr. Pombo. If in a wet year the south-of-the-delta 
contractors are being told that they are going to get less than 
100 percent, whether it is 50, 60, 70 percent, where is the 
400,000 acre-feet going to come from, or whatever the magic 
number is? Where is that going to come from if it is not going 
to come out of the hide of the current users?
    Mr. Hayes. Congressman Pombo, it will need to come out of 
some other water supplies, and there are lots of possibilities 
there.
    Mr. Pombo. Give me an idea.
    Mr. Hayes. For example, currently, water is being purchased 
through the CALFED process from the Kern County water bank of 
up to 75,000 acre-feet of water for operational flexibility 
that we have the potential to use for an environmental water 
account, we have the potential to use for Santa Clara Valley 
Water District if there are problems with water quality this 
summer. That is an example. The Kern County water bank is a 
tremendous innovation that provides potential flexibility to 
the system. That is one example.
    Also, it is no secret that the CALFED process is looking at 
potential new storage, conjunctive groundwater storage, 
potential surface storage. If there is new storage as part of 
the CALFED process, there is a potential that some of that 
would be used for environmental water.
    Mr. Pombo. Let me ask you, do you support looking at new 
on-stream water storage possibilities as part of this process?
    Mr. Hayes. As I am sure you are aware, Congressman, CALFED 
has done an extensive study of storage that Mr. Hannigan talked 
about. They looked at, I think, at over 50 sites to try to find 
sites that are practicable and the number of sites has been 
narrowed to about ten or 12, I believe. None of them are on-
stream storage, with the exception of potential raising of 
Shasta that has been talked about and also Millerton, I believe 
is on that list.
    But in terms of new storage potential, the process that has 
been gone through over the last several years has not 
identified a new on-stream storage as a viable possibility. 
But, of course, it does not matter if it is on-stream or off-
stream or groundwater as long as it is storage and it makes 
sense, and the CALFED process is identifying potential areas of 
storage that make sense. The key questions are going to be, how 
practicable are they and what are they being used for? Are they 
being used for operational flexibility and water quality or for 
new yield, et cetera. All that is part of discussions that are 
going to have to be had with the stakeholders in the coming 
months.
    Mr. Pombo. Mr. Nomellini, Mr. Hayes talked about the 
stakeholders being involved with the decisionmaking processes 
to how the money has been spent up to this point. Can you share 
with the committee what your involvement, the irrigation 
districts that you represent, San Joaquin County in general, 
what has their involvement been in this process?
    Mr. Nomellini. Your constituents in San Joaquin County have 
not been part of the stakeholder process in formulating the big 
deals that are always made. We have been left out of that 
process.
    However, we have been able to go to the public meetings of 
CALFED. We have Alex Hildebrand that is on the advisory 
committee, and whatever happens to get referred to the advisory 
committee, he has some input on that. Tom Zuckerman, co-counsel 
with me, has been on the reviewing the expenditures for the 
ecosystem restoration work and he reports very similarly to Mr. 
Yardas that the process has been improved so that that body 
does have some input. Prior to that time, it was a staff-level 
decisionmaking process to allocate money, most of which was 
allocated to their own agencies and those kinds of things, 
which we were unhappy about. But it has been reported to me 
that there have been changes in that regard.
    Mr. Pombo. If the CALFED process were to be reauthorized, 
what recommended changes in terms of process would you 
recommend?
    Mr. Nomellini. Well, we would ask that the composition of 
CALFED exclude adjudicatory bodies, such as the State Water 
Resource Control Board. They have no business being in the 
planning and development of projects over which they have to 
exercise their judgment as independent judges. So we think they 
have to be eliminated.
    The process that has the regulators and the Bureau and the 
Department of Water Resources, who we view as the exporters, 
making decisions in secret meetings is something that we do not 
think is good. Now, if you people take the oversight and 
approve every project, well, then there is a public forum that 
does it. But that process is not a healthy one to have, and 
what happens to us is that the regulatory assurance extends to 
the exporters but does not extend to the areas of origin, so we 
get shorted in that process. So structure is not good in our 
opinion and should be changed.
    Mr. Pombo. As you know, going through this process, we do 
not always make good decisions. We do not always win. But at 
least it is a public process and those that are elected to have 
accountability have to stand for whatever decisions are made, 
and that is one of the reasons, as I have told you before, that 
I feel like it has to go through some type of Congressional 
oversight. Thank you, Mr. Chairman.
    Mr. Doolittle. Thank you. There are three votes pending, I 
gather, so we have 15 minutes. I recognize Mr. Herger for his 
questions. Actually, Mr. Dooley was out when we went. It is Mr. 
Dooley's right to ask questions.
    Mr. Dooley. I would just like to maybe go back to this 
environmental water count. The 400,000 acre-feet, now, is that 
water that would be in addition to the water that is currently 
required for B2 plus other regulatory demands?
    Mr. Hayes. I want to caution, if I can, Mr. Congressman, 
the assumption of 400,000.
    Mr. Dooley. Let us just say whatever amount that is being 
considered for the environmental water account then.
    Mr. Hayes. I hope the hope--the interest--my sense, Mr. 
Congressman, the interest of all the stakeholders is to have a 
long-term CALFED solution that identifies a water block, if you 
will, for the environment and that is it and that provides 
assurances that that is it, and there is a tolerance level that 
is being felt here of how much water essentially can come out 
of the hides, if you will, of current water users. And the 
accord and B2 process has essentially, I think, or arguably 
represents that tolerance level.
    However, what we are finding is the system has very little 
operational flexibility and that has been a key part of the 
problems that we have been having over the last year or two. If 
we are going to have a long-term solution, we may need some 
more water for the environment so we do not have these 
frictions, at the same time, have more operational flexibility 
and water quality for the urban users and water supply 
reliability for the ag users. That is what CALFED is all about.
    So in that context, yes, the additional water we are 
talking about for the environmental piece is over and above the 
accord and the B2 water.
    Mr. Dooley. So, then, is there a consensus among the 
stakeholders that all the water that is currently being used, 
the 800,000 or whatever was dedicated in the accords, is being 
used in the most efficient manner in order to achieve the 
environmental outcome? I guess that is what a little bit of 
concern is----
    Mr. Hayes. Right. Sure.
    Mr. Dooley. --is that if you go down this path and you 
designate, let us just say theoretically, 400,000 acre-feet----
    Mr. Hayes. Right.
    Mr. Dooley. --are we basing that on any type of science? 
Are we then also assuming that the 800,000 that was part of the 
CVPIA is being used in a manner which is maximizing the 
environmental benefit in order to minimize obligations or 
further shortages of contractors?
    Mr. Hayes. Well, I think that is a very good question, 
Congressman. I actually think, perhaps I am a pollyanna here, 
but I think the experience of the last year has been a plus for 
the CALFED process. The difficulties that we had with the smelt 
problem last May, with the problems with the early return of 
the winter run chinook salmon in November and December, because 
they have raised in a very visible way the potential conflicts 
between environment, water quality, and water supply.
    What has come out of that process, and Mr. Hannigan's 
written testimony discusses it, is a new operational process 
that we think will enhance the ability of the right balance to 
be met. But that is certainly one of the challenges of the 
CALFED process and that is going to be part of our, I am sure, 
the record of decision, is how to make sure the right decisions 
are made in a real-time basis so that there is good science and 
there is consideration of all the appropriate factors.
    Mr. Dooley. Is there a recognition by the, I guess the 
Department, that when Westlands Irrigation District that on an 
average year the Bureau of Reclamation is saying, I think 
everyone is in agreement now, it is 45 percent allocation, give 
or take maybe a little bit, if anything more on the downside, 
is there recognition that if you do go out and you create 
another 400,000 acre-feet in the environmental water count that 
that most likely further reduces the allocations to Westlands 
Irrigation District?
    Mr. Hayes. No. No, Congressman. I do not think that is the 
solution.
    Mr. Dooley. We obviously do not look at it as a solution, 
but I wonder if that is the effect, I guess, is what we----
    Mr. Hayes. No. No. I think if that were the effect, we 
would not be able to reach a CALFED agreement.
    Mr. Dooley. So if it is then demonstrated that it is 
impossible to identify where this 400,000 acre-feet can come 
without having an adverse impact to the Westlands, then you are 
not going to go down that path?
    Mr. Hayes. Well, I think Congressman Condit said it well. I 
think that everyone is not going to be as happy if they might 
be if only their own interests were at stake. We have got lots 
of interests here and they are not always coincident. We have 
heard the concerns about in-delta farmers versus exporting to 
Southern California. We have got issues in the Sacramento 
Valley that are very different than the issues in the San 
Joaquin. We have got the urban water districts in the north 
that are very different from the south.
    What we are trying to do, I think, in the record of 
decision is come up with a package that is going to work 
adequately for everybody. That is the tremendous challenge of 
this. But we start with a proposition that if all of this 
burden is going to end on one water community, like Westlands, 
for example, that is not going to work. To some extent, we have 
got to find a solution that works adequately for everybody.
    Mr. Dooley. Is that the same approach that is being 
utilized with whatever water might be required to satisfy the 
Trinity decision?
    Mr. Hayes. Certainly. Certainly. I mean, Trinity is a 
reality that we feel the Secretary has an obligation to do a 
decision this year, as he has talked about publicly for the 
last couple of years because of those statutory 
responsibilities that he has, and all of the CALFED evaluation 
of the last couple years has assumed a hit for Trinity. So all 
of the work that is going in in terms of projections are not 
based on an unreal situation which would not assume a Trinity 
to the hit, and to the contrary, they are assuming a Trinity 
hit. OK, given that, how are we going to deal with the water 
needs of the various water users, urban, ag, and environmental?
    Mr. Doolittle. We are going to recess at this point and 
have the votes and we will--no, Mr. Herger, if you want to ask 
Mr. Hayes, you had better do it now because he is going to 
leave at 1. He will not be here after we come back, so you are 
recognized.
    Mr. Herger. Thank you, Mr. Chairman. I thank you for being 
here, and I did hear the sad situation that I know you are in a 
bad position with your wife on where you should be now, but 
anyway, thank you for being there.
    Mr. Hayes. Thank you for those kind words.
    [Laughter.]
    Mr. Herger. Having a wife, I can empathize with you, and 
being in that same position myself on several occasions.
    But the magnitude of our problem, as we have been 
mentioning, and the reason why Ms. Southwick representing the 
California Farm Bureau and farmers not only in my district but 
throughout the State, an additional concern we have is that 
thinking of the history of the Owens Valley, where Los Angeles 
went in and secured their water rights, bought them, many of us 
can see that type of scenario perhaps developing in our 
agricultural area, agriculture being our No. 1 industry, of 
people coming in, the need. We get into the drought years. 
Again, right now, we are in an oversupply rainy time, and if we 
are talking about 45 percent cutbacks on some agriculture now, 
what do we get with the State growing and what do we get later 
on?
    In light of that, in light of Mr. Nomellini's comments on 
concern of what we do, if I could ask, and Mr. Hannigan talked 
about a CALFED list of about a dozen possible storage sites, 
Mr. Hayes, how long would it take us to realize the benefits 
from these sites?
    Mr. Hayes. Well, I think each site is different, 
Congressman, but certainly there is some startup time because 
in the case of, say, raising Shasta Dam, if that decision were 
made, there would be some construction time, that sort of 
thing. So it is going to take--there is certainly a period. 
There would be a ramp-up period for any new storage.
    Mr. Herger. What is your projection on that? Of course, 
they are talking about the sites in Colusa County or out in 
that area.
    Mr. Hayes. Yes. I am not that close to it in terms of the 
timeframe. The next CALFED decision is to try to put in place a 
stable, long-term water plan that the first 7 years or so are 
the critical years. Hopefully, if there is infrastructure, it 
could be implemented in that timeframe.
    Mr. Herger. Do you know how much money has been spent to 
this point on storage and on developing a plan or for potential 
storage through the CALFED, what the amount is and what 
percentage that is of the total CALFED that has been spent?
    Mr. Hayes. Well, the money that the Congress has authorized 
has, until last fiscal year, has been exclusively environmental 
restoration money, and we are in the study process. There has 
not been construction dollars authorized by the Congress under 
CALFED. That would follow, presumably, a record of decision.
    Mr. Herger. Right, and I am aware of that, and thank you, 
but as far as studying or looking into a proposal, how much has 
been spent?
    Mr. Hayes. I do not know that number, but there has been a 
very active study effort. The integrated storage investigation 
effort that CALFED undertook was a very significant effort. I 
would be happy to get the information to you, Congressman.
    Mr. Herger. I appreciate that----
    Mr. Doolittle. Let me just interrupt. We have 3 minutes 
before they close the vote.
    Mr. Herger. Just a last question I will leave for you. 
Another major concern is once we move beyond the study, what we 
are going to do. Have you analyzed the issues associated with 
Section 404 permitting and its requirement?
    Mr. Hayes. That is certainly part of our discussions. EPA 
and the Corps of Engineers are key players in that and they are 
going to be part of the discussions. Four-oh-four needs to be 
addressed as part of a CALFED solution.
    Mr. Herger. Thank you very much.
    Mr. Hayes. Thank you, Congressman.
    Mr. Doolittle. We are going to excuse Mr. Hayes. We will 
ask the rest of the panel to remain for questions Mr. Ose may 
have and we will be back when these votes are concluded. We 
will be in recess.
    [Recess.]
    Mr. Doolittle. We will reconvene. We are ready for Mr. Ose, 
but while we are waiting, I am going to ask Mr. Nomellini if he 
has any ideas as to how to achieve regulatory assurances from 
the government.
    Mr. Nomellini. My confidence level in regulatory assurances 
is very little. However, for those of us in the areas of 
origin, a clear reaffirmation from the Federal Government of 
the commitment to deliver water on a priority basis to meet the 
needs in the area of origin, I think is essential. I think it 
is just grossly unfair to think of regulatory assurance for 
exporters without covering the assurance to the areas of 
origin.
    We have been struggling, trying to get the Bureau to 
recognize that. The Bureau says, all right, if you want your 
priority, go file for an appropriated water right and build 
your own dam, a very impractical commitment to honor the 
promises of the past that they would not divert water that was 
needed in Northern California.
    The practical reality is, most of those people in our area 
that have water, I mean, need water have contracts with the 
Bureau and they should be allocated in priority to the exports, 
and for those that do not, they should be able to go forward to 
the Bureau, request that they be given a priority contract to 
do that. I think that would quiet the waters, you know, quiet a 
lot of the struggling and apprehension in the areas of origin. 
That is my guess. But still, actually putting something into 
practice that is on paper has been extremely difficult.
    Mr. Doolittle. Mr. Ose is recognized.
    Mr. Ose. Thank you, Mr. Chairman.
    Mr. Doolittle. Let me ask, do you have questions you wish 
to address to the Department of the Interior, because if you 
do, we have two people that we can swear in and they can answer 
them.
    Mr. Ose. Not to the Department of the Interior.
    Mr. Doolittle. OK. Well, then we do not need to. Let us go 
ahead. I recognize you for your time.
    Mr. Ose. Thank you, Mr. Chairman.
    I want to explore something, if I may. I see on virtually 
everybody's resume some capacity of serving within the CALFED 
process, either on the Ecosystem Roundtable or the Bay-Delta 
Advisory Council, and I am trying to figure out, as a member 
who is interested in oversight, exactly who sits on these 
committees and what decisions get made in these committees. Ms. 
Southwick, I know that you sit on the Bay-Delta Advisory 
Council, and Mr. Yardas, you sit on the Ecosystem Roundtable. I 
do not know if you are left out----
    Mr. Nomellini. I am sitting in this chair.
    Mr. Ose. You lucked out. OK. But I also know that some of 
the witnesses that are going to appear later are also involved 
in the process. I am trying to get to whether or not people who 
have actually been elected by a vote of the people are sitting 
on these groups making decisions as to how or what CALFED shall 
do.
    Ms. Southwick. Congressman, I think with the exception of 
perhaps RCRC, which has a county supervisor, I think, 
representing them on BDAC, it is pretty much by constituent 
group. I do not think that there are very many elected 
officials. There is recognition certainly by the chairs of 
those committees, and I think most people on the Bay-Delta 
Advisory Council agree that there have to be accountability to 
the State legislature for anything that CALFED wants to do, and 
certainly to Congress because some of the things that CALFED 
has talked about will require some kind of authorization that 
does not currently exist.
    Supposedly, that is what the whole governance idea is 
about. Part of our concern with the governance idea is getting 
at the local and grassroots level in participation, mostly by 
elected officials and by just your average person who is 
affected by the decisions that are being made by CALFED.
    Mr. Ose. I think you are striking right at the point I am 
trying to make. I and the members up here, as it relates to the 
Federal resources committed to this process, we are the ones 
who have the statutory responsibility as to how those are used. 
While I am supportive of the process, I am trying to find a 
means to introduce greater accountability. So any suggestions 
either of you have, I appreciate.
    Ms. Southwick. Well, certainly as we stated in our written 
comments, accountability for us starts at the lowest level, the 
level where you have implementation, because with all the 
decisionmaking, wherever it is made, at the Congressional 
level, at the State level, wherever, sooner or later it comes 
down to on the ground something has to happen. Something gets 
built or something gets torn down or something changes and the 
people who are affected by that are the people who live in 
those communities and they need to have a firm place in that 
decisionmaking. Right now, from what we have seen of CALFED's 
governance proposals, we do not see how that could happen.
    Mr. Ose. Within the 15-agency committee----
    Ms. Southwick. That committee would go away, by the way.
    Mr. Ose. That would go away?
    Ms. Southwick. Right.
    Mr. Ose. OK. So, now how many elected officials currently 
sit on that 15-agency committee?
    Ms. Southwick. To my knowledge, one.
    Mr. Ose. That would be who?
    Ms. Southwick. I think his name is--it is RCRC. I forget 
his name.
    Mr. Ose. So it is a supervisor?
    Ms. Southwick. Right.
    Mr. Ose. But there is no Statewide elected official, there 
is no legislative district official, there is no State Senate 
district official, there is no Congressional official----
    Ms. Southwick. Not that I am aware of. I do not know if you 
know.
    Mr. Yardas. No. I think that perhaps the Department of the 
Interior witnesses would want to address this, as well. The 
advisory groups that we mentioned, specifically BDAC and its 
subcomponents like the Roundtable, are strictly advisory, and 
the governance proposals for going forward, they are constantly 
changing, but among them are representations of members that 
are not directly elected officials but which are appointed by 
the Governor or other elected officials. So there is an 
evolution to bring that sort of representation directly to 
bear.
    Mr. Ose. Are there any slots in this reserved for elected 
officials?
    Mr. Yardas. I do not know, but perhaps others could comment 
more directly.
    Mr. Ose. It troubles me, if you will, that I have the 
responsibility but I do not have the authority over the action.
    Mr. Yardas. We feel the same way from an advisory point of 
view. We are pointed to as having approved things, but we do 
not actually decide anything and we cannot really stop things, 
so we are caught in a different kind of quandary.
    I guess I would say two things. One is that the 
appropriation is specifically to the Secretary of the Interior, 
who has to approve all of the expenditures with regard to 
Federal funds, and so that is where the accountability has to 
show up, at least under the current statute.
    Secondly, I think there was a comment made earlier about 
this kind of delegation of authority being is unprecedented and 
I do not believe that is quite accurate. Although the 
circumstances are different, certainly Clean Water Act 
delegation of authority to States, block grant programs--I 
mean, there are various mechanisms that have been used to 
essentially try and move decisionmaking to the region, to the 
local area where factors of specific circumstance can be taken 
into account, and that is fundamentally, at least from the 
Roundtable point of view, what has been attempted, to try and 
bring the particulars of what is needed on the ground, as well 
as to foster competition in terms of the proposal solicitation 
process, rather than the more conventional Congressional 
earmark process.
    Mr. Ose. Mr. Chairman, I see my time is expired. I thank 
you for your courtesy.
    Mr. Doolittle. Thank you.
    We thank the members of this panel for their testimony. We 
may have further questions to tender and hope that you will 
respond expeditiously if we do so. With that, the panel is 
excused.
    Mr. Ose. Mr. Chairman, begging the committee's indulgence, 
I regret to say that I have a plane to catch at 3:30 and I will 
be departing shortly, so when I leave, it is not because I am 
not interested. It is because I have a commitment tomorrow 
morning.
    Mr. Doolittle. Believe me, I understand, and I certainly 
hope to be wrapped up by 3:30. In any event, just please feel 
free to leave when you need to leave.
    Mr. Doolittle. I will invite panel No. 3 to come forward, 
the members of it, plus Mr. Ritchie and Mr. Cottingham too, so 
they can be sworn in so that we can get the testimony, please.
    If you gentlemen will remain standing and raise your right 
hand, do you solemnly swear or affirm under the penalty of 
perjury that the statements made and responses given will be 
the whole truth and nothing but the truth?
    Mr. Tenney. I do.
    Mr. Wilson. I do.
    Mr. Bradley. I do.
    Mr. Bishop. I do.
    Mr. Davis. I do.
    Mr. Ritchie. I do.
    Mr. Cottingham. I do.
    Mr. Doolittle. Thank you. Each answered affirmatively.
    We are pleased to have you here and we will begin with Mr. 
Van Tenney, General Manager of the Glenn-Colusa Irrigation 
District.

STATEMENT OF O.L. ``VAN'' TENNEY, GENERAL MANAGER, GLENN-COLUSA 
 IRRIGATION DISTRICT, WILLOWS, CALIFORNIA; LARRY WILSON, BOARD 
  OF DIRECTORS, SANTA CLARA VALLEY WATER DISTRICT, SAN JOSE, 
  CALIFORNIA; JUSTIN BRADLEY, INTERIM ENVIRONMENTAL DIRECTOR, 
SILICON VALLEY MANUFACTURING GROUP, SAN JOSE, CALIFORNIA; WALLY 
BISHOP, GENERAL MANAGER, CONTRA COSTA WATER DISTRICT, CONCORD, 
   CALIFORNIA; AND GRANT DAVIS, EXECUTIVE DIRECTOR, THE BAY 
               INSTITUTE, SAN RAFAEL, CALIFORNIA

                STATEMENT OF O.L. ``VAN'' TENNEY

    Mr. Tenney. Mr. Chairman, members of the committee, I 
appreciate the opportunity to appear before you today. The 
Glenn-Colusa Irrigation District is located in the heart of the 
Sacramento Valley and is the largest as well as one of the 
oldest diverters of water from the Sacramento River. GCID also 
supplies water to three national wildlife refuges that comprise 
about 20,000 acres of land within the district. My comments 
today will also represent the views of the Northern California 
Water Association and its many members.
    Water use within the Sacramento Valley has had an impact on 
the environment, and as is the case with many of my colleagues 
here today, that environmental impact has resulted in the 
imposition of very significant limitation on our systems. In 
fact, I think, as Deputy Secretary Hayes spoke a while ago, 
there was at least some confusion in my mind as to whether or 
not that fact is understood. While much of the dialog in the 
State goes on around the question of the bay-delta and the 
restraints that that causes south of the delta, I think people 
often do not understand that ESA actions and other types of 
environmental constraints have had very serious impacts on the 
north State, as well.
    And I would point out, using GCID as an example, that our 
fish screen problems at Hamilton City pumping station for a 
time caused a complete cessation of pumping, and even today, 
some 10 years after that initial environmental compliance 
problem, we still do not have back 100 percent of our pumping 
capacity.
    I am pleased, however, to say, knock on wood, that by this 
time next year, in fact, probably by fall of this year, we 
should have completed what will be the largest fish screen 
facility, flat plate facility, in the entire world. That will 
be a very significant milestone for GCID for those of you who 
know the history of the district, as well as for the entire 
system. In fact, I think it is our experience, certainly my 
experience with the partnership that caused that to happen, a 
partnership with many Federal and State agencies that has 
caused us to choose to focus not so much on the problems but on 
the question of how could CALFED accomplish its mission of 
water reliability, water quality, and ecological improvement.
    The Sacramento Valley in this regard believes that it can 
offer a number of ways to assist in addressing problems in the 
bay-delta watershed. We are willing, for instance, as the first 
point, to forge partnerships, partnerships that we feel we have 
learned a lot about through the experience with the fish screen 
project for the protection and development, perhaps, of 
upstream habitat, further, as a means to address ESA problems 
as well as a means to generally enhance wildlife and fishery 
habitat.
    Secondly, we can assist in reducing increased water supply 
demand through improved Sacramento Valley Water Management. 
Sacramento Valley interests have been involved in an intense 
effort over the last couple of years, in conjunction and in 
partnership with the Bureau of Reclamation, to develop an 
overall basin-wide water management program which would allow 
us to use our existing water supplies to meet not only existing 
needs but also many of our future demands, as well.
    No. 3, we can assist and are willing to assist in 
maximizing the benefits of additional upstream storage, and we 
would support the raising of Shasta and perhaps Millerton, but 
off-stream storage, as well. We are willing to partner with 
State and Federal agencies in the development of that upstream 
storage, and the district has as part of its system key 
conveyance systems to make that possible, as well as with the 
Tehama-Colusa Canal Authority's facilities.
    We are willing also to talk about a combination of direct 
diversion, of service water, and improved groundwater 
management to maximize the benefits that can be achieved 
through any upstream storage project.
    We believe that by proceeding forward in CALFED requires 
the forging of local partnerships with the Sacramento Valley 
interests as a critical element to both accommodate and achieve 
these benefits, and it is pleasing to me that in my 
participation with CALFED, we have seen a strong direction in 
that particular direction now toward partnerships and 
interests, it seems, and moving forward with the local areas. I 
speak partly on behalf of the counties that I work with as 
Glenn-Colusa Irrigation District and with the larger NOCAWA 
organization to say that they feel that they need that input, 
as well. So I think those kind of partnerships is what will 
move the process forward.
    Under these circumstances, GCID and Northern California 
Water Association would not only support CALFED authorization, 
but would actively participate in, in cooperation and 
partnership with CALFED and its member agencies, in pursuing 
these types of solutions that I have talked about. Thank you. I 
would be happy to answer any questions.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Tenney follows:]
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    [GRAPHIC] [TIFF OMITTED] T7477.116
    
    Mr. Doolittle. Our next witness is Mr. Larry Wilson, who is 
a member of the Board of Directors of Santa Clara Valley Water 
District. Mr. Wilson?

                   STATEMENT OF LARRY WILSON

    Mr. Wilson. Thank you, Mr. Chairman, members of the 
subcommittee. I want to thank you for having us here today. In 
the interest of full disclosure, I also sit on the board of the 
San Luis Water Authority, who sometimes seem to be a captive to 
the agricultural interests of the Central Valley, but actually 
they are good friends and we work well together.
    The Santa Clara Valley Water District is a stream 
management and wholesale water agency for Santa Clara County. 
In that capacity, we also serve the high-tech area known as 
Silicon Valley. The district imports about half of its water. 
The biggest amount of that comes from the Central Valley 
Project. In drought years, the amount that we import from State 
and Federal project could amount to as much as 90 percent of 
our water supply.
    Another participant in the panel, Justin, sitting next to 
me, will give you the Silicon Valley Manufacturing Group's 
perspective on how our water supply is important to the 
community and to the industries in the county.
    I'm going to skip a lot of this and cut right to the two 
basic things we want to talk about. One of these is the 
flexibility in the system and the other is water quality. You 
have heard talk about what happened in the delta and also what 
happened in San Luis. I will give you some specific examples as 
they relate to us and how they impact us.
    The Federal fisheries programs are being implemented in a 
way that use up all the operational flexibility in both the 
State and the Federal project, and the best example of that is 
the so-called low point in the San Luis reservoir. It has 
become a chronic worry for us. It causes us constant heartburn. 
In three of the last 4 years, the low point has been projected 
to be 300,000 acre-feet or less. When they get projections for 
300,000 acre-feet, we immediately have to scramble to make 
arrangements either to cut back our local recharge, hold back 
our local storage for future use, or find additional sources of 
water.
    In the last year, we find that the projection was for it to 
be under 300,000 for four consecutive months. This is without 
any water set aside for any activities that might involve 
endangered species or breakdowns in the system. It is a lot 
like driving your car around with four bald tires. Something 
bad is going to happen, and that is the kind of situation we 
have been put in.
    The district considers any interruption in the Federal 
deliveries to be a serious increase in the public health and 
safety risk to the county and the projected loss of Federal 
supplies either because it cannot be treated or it cannot be 
pumped causes the district to take immediate contingency 
actions of some kind. We wake up in the morning wondering what 
is going to come about today.
    If you look at San Luis reservoir, if it gets to the 
neighborhood of 500,000, 600,000 acre-feet in storage and for 
some reason the pumps are shut down, the reservoir will drop at 
a rate of about 20,000 acre-feet a day, 250,000 acre-feet in a 
week. This is the kind of situation we are faced with.
    If interruptions in supplies do actually occur, 
particularly during the peak-demand summer months, the result 
for us would be treated water shortages.
    The planned operation of the Central Valley Project are 
putting the urban water supplies of Santa Clara County at great 
risk. Earlier this year, we saw planned operations forecasts, 
like I told you, of below 300,000, this for four consecutive 
months. This has since been changed now. It looks like we are 
going to be in better shape than we thought we were.
    But every time this comes about, we have to reconstruct our 
water supplies and how we are going to operate. Each time one 
of these threats have occurred in the past, we have found some 
way, by a combination of either extraordinary Federal or State 
actions and cool weather and wet weather, to minimize demands, 
but we are not always going to be that lucky.
    In the short term, the options that we have talked about, 
above the ones of using the Federal and State funds to get 
water to offset these losses, have worked, but we cannot rely 
on those in the long term. We need some long-term investment 
and some real good short-term options.
    Delta water quality, we spoke earlier about the problems 
with the bypass closing down. Now, this does not affect us in 
the same way because we also take the water from the California 
aqueduct. When the bypass was closed, immediately, the water 
coming to us started to go up in salinity. Inside of 2 weeks, 
we had reached--our salinity in our water supply had tripled. 
This continued until they were able to get the bypass back in 
operation. Now, what this means is that we are turning out 
water--trying to blend it with other sources to bring those 
levels down or in some way try to use that water in such a way 
that it does not impact the high-tech industry.
    The district, along with other members of the Bay-Delta 
Urban Coalition, continue to hope that CALFED will provide 
opportunities to develop needed programs and facilities and to 
institutionalize more balance operations decisionmaking. That 
is the serious problem with us. If we knew what to expect, we 
could deal with it better, and so often, our problem is that we 
wake up one morning and all of a sudden there is a problem we 
had not anticipated.
    Our continued support for CALFED will depend in large part 
on the extent to which the final package expands the system's 
flexibility and achieves long-term certainty in water supply 
and quality.
    We also attached for your review a recent briefing book 
entitled ``Silicon Valley Supply and Water Quality 
Challenges.'' It has a lot of the graphs in it and explains a 
lot of these issues I have just discussed. I would be happy to 
answer any of your questions.
    Mr. Doolittle. Thank you. I looked that book over. That is 
pretty interesting, I thought.
    [The prepared statement of Mr. Wilson follows:]

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    Mr. Doolittle. Our next witness will be Mr. Justin Bradley, 
Interim Environmental Director of the Silicon Valley 
Manufacturing Group. Mr. Bradley?

                  STATEMENT OF JUSTIN BRADLEY

    Mr. Bradley. Mr. Chairman, members of the subcommittee, on 
behalf of the Silicon Valley Manufacturing Group, we were 
founded approximately 22 years ago by David Packard and today 
we represent 160 of the most respected high-tech employers and 
supporting industries. Collectively, we represent approximately 
one in four of the private work force in Silicon Valley and we 
represent those employers in a variety of issues affecting 
business climate, quality of life for those who live and work 
there. These companies are part of a $106 billion regional 
economy. It also represents one-third of the total venture 
capital expended in the U.S. in that one area, so you can get a 
sense for the amount of innovation that goes on in a very 
compact area.
    As you may have read in the newspapers lately, it is the 
home of Cisco Systems, which this week became the most valuable 
company in the world. We are often referred to as the economic 
engine of the new economy, I think it is fair to say, for at 
least the State and many other parts of this country, as well.
    Every year, our president meets with the CEOs and 
representatives of the board of directors to ask some very 
simple questions to find out what it is they need, and what the 
question is is what does it take to compete here in Silicon 
Valley and continue to have the kind of success and growth 
curves that bring so much benefit to our State and the country.
    The answer is pretty consistent over time. What they say is 
essentially investment in infrastructure, and infrastructure 
for a whole host of issues has been under-invested in for many 
years. Transportation is one of those things, and here we are 
talking about water, another one of those infrastructure 
issues. We concur with the water district that we are living on 
the edge, and we have been in good times, and given something 
that stresses the system just a little bit more and we will 
find water rationing again.
    We are already a very interesting community to live in if 
you want to buy a house. You can buy a bungalow for $500,000 
and then there will be an interesting little caveat to say, oh, 
by the way, you cannot use the water very well. You can drink 
it, but we do not want you washing your clothes. It may seem 
kind of small-minded, but that is the life we are in. There is 
a lot of value generated in that area and we want to find ways 
that win for everyone to keep that kind of vitality working.
    So maintaining that healthy environment and quality of life 
requires and depends on a reliable and consistent supply of 
high-quality water. It is critical to supporting our new 
economy, and I would say it is even more critical as a 
perception of what would bring in high-quality people to 
continue this working.
    When I was on the plane coming here, I met with a company 
that started 2 years ago, a company called Tollbridge. They now 
have 130 employees and $300 million in sales. They have doubled 
every quarter for the last several.
    Cisco Systems was not a $550 billion company last year, and 
yet you see the acquisitions and the vitality. It is something 
that has made the last 9 years possible. So if you are the 
beneficiary of a lot of that personally or in this area, you 
can point to Silicon Valley and the resources that the water 
district provides as being a critical part of that. Unless we 
invest significantly in infrastructure quickly, then we put 
this in jeopardy, and that is not even to get into the other 
ones, like power and transportation.
    So operations of the Central Valley Project should support 
the success of Silicon Valley by providing a reliable, high-
quality water supply in Santa Clara County. The Manufacturing 
Group and our 1.7 million residents rely on that water, 
especially imported from Central Valley Project, to meet those 
needs.
    A little statistic. Since 1994, employment in our area has 
gone up by more than 25 percent. During approximately the same 
period, there has been a 50 percent reduction in water 
available from the delta. Somehow, there is a dysfunction here 
that perhaps we ought to address in short order.
    We have been part of the CALFED process and we have been 
hopeful that there would be some short-term solutions to avoid 
some of the expected pain and suffering. I think we get a 
little less encouraged as time goes on because we believe that 
the changes, the adjustments that need to be made should not be 
incremental given the trends that we see in our valley. They 
need to be more exponential. So if we are going to have 
projects, they cannot be of the eyedropper sort but the kind 
that really get beyond today's needs, beyond 5 years from now 
to 20 years, 25 years from now and deal with the enormous 
population gain as well as the vitality of the industry.
    So we do support a balanced approach, good science, 
balancing the needs of all the constituents who are at the 
table. We really support that. We have been part of that 
discussion all along. We just want to restate that our theme is 
that working together works. We are not going to abandon the 
process. That is why we are here. That is why we are here with 
the water district and we are grateful for the opportunity to 
address this group. I will take any questions.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Bradley follows:]

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    Mr. Doolittle. Our next witness is Mr. Wally Bishop, 
General Manager of the Contra Costa Water District.

                   STATEMENT OF WALLY BISHOP

    Mr. Bishop. Thank you, Mr. Chairman and members of the 
committee. My name is Wally Bishop. I have been for the last 7 
years General Manager of the Contra Costa Water District. I am 
also a member of the Congressionally formed National Drinking 
Water Advisory Counsel at EPA for drinking water matters.
    You may know of Contra Costa Water District. It was spoken 
of several times today. It is the largest urban water agency 
relying solely on the delta. It is also the home of Los 
Vacqueros, which was the first reservoir in over a decade, put 
online in California well over a year ago, off-stream storage, 
and it was put online without lawsuits.
    I would like to put together four key principles for you 
today that I believe apply to CVP operations, CVPIA and CALFED. 
Those principles are, we must have balanced decisionmaking, we 
must have good science that is peer reviewed before we make 
regulatory decisions, we must have accountability both on the 
Congressional side with respect to how funding is provided to 
agencies that programs get online and how decisions are made, 
and we need an improved governance which stands for not only 
leadership in the water business but how we are managing our 
decisions.
    What I would like to do today, and I brought a map that I 
can use to illustrate, is to explain to you what happened in 
November-December 1999. Many of us think we know about what 
caused the high salinity problem, but I thought we ought to 
walk through that as a way to illustrate how these principles 
were not followed.
    What happened? Actions were taken primarily through Federal 
agencies, the U.S. Bureau, Department of the Interior, Fish and 
Wildlife, though the State had a role in the operation of their 
pumps, which created an unprecedented deterioration of water 
quality. We like to talk about water quality as exceeding the 
State standard of 250 milligrams per liter. In reality, that 
standard is set at our intake, Contra Costa water intake, for 
paper making of the Gaylord Pulp Mill. Drinking water standards 
are much lower than that. In fact, EPA has sodium of 20 
milligrams per liter on their future contaminant list. When we 
are talking of chlorides of over 250 per liter, people have 
stopped drinking that water.
    We made the delta not only undrinkable, but we wasted water 
trying to get the delta back, both in unrealized yield when we 
shut off the pumps and having to sluice water down the 
Sacramento River trying to keep from exceeding the standards 
when we realized that the operation had created a problem.
    And finally, all of this was totally predictable. It was 
exactly what started in last spring in the smelt and the 
environmental water account that was being worked on at that 
time could have helped solve that problem. It was never 
implemented.
    Now, if I could turn you to the map, I am sure all of you 
know this is Sacramento up here to the north. This is 
essentially the area called the delta. What is key in trying to 
look at the decisionmaking process is what we call the delta 
cross channel. At the time the decision was made to close the 
cross-delta channel, we had the pumps running to the south at 
full. We were going through a period of November-December with 
record low rainfall. In other words, the Sacramento River was 
running low. And we were going through a period of almost 
record high tide.
    Now, this is a complex system, but there are two basic 
principles. What controls salinity basically is water coming 
down the river that has to come across the cross-delta channel 
or tides, tides pumping saltwater back into the delta.
    November 24, north of Sacramento, resource agencies catch 
salmon in their trolling nets. A decision is made in November 
26 to close the cross-delta channel. Everybody knows what 
happens when you close the cross-delta channel and keep the 
pumps working. Now, why were the pumps working? Because we were 
trying to make up for water in the fall that was lost last late 
spring with the delta smelt closure of the pumps. We had 
shifted our pumping to the fall, which meant we already were 
shipping water of lower quality to Santa Clara and other 
agencies because we had shifted the pumping for makeup.
    So a highly, highly fragile system. The decision was made 
to close the cross-delta channel. Now, that decision was made 
under a plan that said, if we close the cross-delta channel and 
salinity starts to move up according to certain triggers, a 
consideration to reopen that will be made.
    In October 1999, the Bureau has the final PEIS which point 
is mitigation of the Contra Costa Water District. It says, if 
the cross-delta channel is closed and salinity starts to 
increase, opening of the cross channel will be mitigation. This 
is November 26.
    On November 29, salinity trigger levels were already 
starting to approach threshold levels. On December 1, some of 
the triggers had already been reached. On December 3, many, if 
not all, triggers had been reached.
    Now, during this period, one of the issues I think that is 
out there is a DAC, which is an advisory committee. There is 
the no-name group, another ad hoc advisory committee to CALFED 
and the agencies. You have the CALFED ops group. You have the 
CALFED water management team. Some, if not all, of these groups 
were meeting on a daily basis discussing what was going on. 
Pumps had not yet started to be curtailed because it was 
important to get water in the San Luis because of the issues 
you already heard, low point, water quality, cross channel 
closed, people anticipating rainstorms, rainstorms not coming.
    Finally, on December 6, all of the triggers had been met 
for salinity exceedance, which meant consideration to open up 
the cross-delta channel. It was not done. In fact, not only was 
it not done, decisions to either curtail the pumps or release 
more water were still on the table. We had a situation now 
where people were looking at target levels, 250 milligrams per 
liter, in the delta being exceeded, but people had long since 
stopped drinking that water.
    Now, we have Los Vicaros online here. Los Vicaros is put 
online for two reasons, $450 million funded by 400,000 local 
residents for water quality. To get it built, we had to agree 
that we would stop all pumping in the delta at some point when 
fish were forming, but we are allowed to fill uncurtailed if we 
get below certain levels. We had to sluice water into our 
intakes because this salinity had dropped us down 10 percent 
prematurely on our yield.
    So because of this decision, certain things happened. One, 
two railroad cars of salt a day were shipped into the valley, 
where we know salt is a problem. Two, we had to reduce water 
out of our reservoir prematurely that we are going to try to 
make up now. Three, lower quality water is in San Luis 
reservoir. Four, we are unable to document if the fish ever 
came.
    Finally, the cross-delta channel was opened on December 15 
and has remained open. Water quality standards in the delta 
were exceeded on December 20, 250. Not only was it exceeded on 
December 20, it was exceeded not only at the Contra Costa 
canal, it was exceeded all the way down at the Tracy and Harvey 
Banks pump stations, something that had not occurred since 
1977, the worst drought of history in California. In my 
opinion, all of this was avoidable if we had applied to the 
four principles.
    Congress has given to the agencies, the Administrator and 
the Secretary, discretion. That discretion requires good 
science. In the absence of good science, the discretion is not 
used. We err on the side of conservatism. Conservatism is what 
brought us this decision. We must have balanced decisions, 
there must be good science, and there has to be accountability. 
Thank you.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Bishop follows:]

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    Mr. Doolittle. Our final witness is Grant Davis, the 
Executive Director of the Bay Institute. Mr. Davis?

                    STATEMENT OF GRANT DAVIS

    Mr. Davis. Thank you, Mr. Chairman and members of the 
subcommittee. That was quite informative, Wally, and it is nice 
to see the bay-delta system up there because we all realize 
that that is the goal. We are trying to protect that resource.
    My name is Grant Davis. I am the Executive Director of the 
Bay Institute. It is an organization dedicated to the 
protection and restoration of the San Francisco Bay and its 
delta Central Valley watershed. TBI was very involved in the 
CVPIA and was one of the three environmental groups that signed 
the bay-delta accord. We have been very involved implementing 
innovative new approaches to managing California's water supply 
that are represented in some of these initiatives.
    Our concern in doing this has been to reverse over a 
century of destruction of the bay-delta environment, a trend 
that has worsened catastrophically over the last two decades, 
while also maintaining the economic and social benefits derived 
from managing the State's water supplies for multiple uses.
    I have extensive testimony that I have written and would 
like to be introduced into the record so I, in the interest of 
time, can consolidate my remarks and leave time for questions.
    Mr. Doolittle. Yes, that would be fine. Your full testimony 
will be part of the record.
    Mr. Davis. One I would like to call attention to is a chart 
that looked at the CVP export yield since the Tracy plant was 
built in the early 1950's. In that, it shows the average yield, 
even accounting for the B2 measures and the water quality and 
CVPIA measures, this year, an estimated 2.68 million acre-feet 
for the 2000 year, which is historically within the ballpark of 
the 20-year average. I think this is indicative of what is 
happening here, which is the question is there may be a crisis. 
We might maintain that that is not the case. The crisis may be 
more in how we respond to this issue.
    I would say that the two districts, the one you heard of 
earlier today, which is the Santa Clara Valley Water District, 
and then the other, the Westlands Water District, are mostly 
affected by the CVP ops decisions. The rest of the districts 
actually have the ability to get supplies elsewhere. So it is 
important to understand that what is really at stake for these 
two districts is not whether--it is whether there will be 
adequate water supply for their customers, but it is also the 
amount of money that they have to pay for that water.
    CVP-derived water supplies traditionally are one of the 
cheapest sources of water, as opposed to many other sources of 
water available to them. In fact, Santa Clara has increased its 
use of State water project sources when CVP deliveries are 
reduced, and Westlands has been purchasing hundreds of 
thousands of acre-feet of water on the market every year to 
offset changes in CVP deliveries. However, we applaud the 
creativity of these districts in looking for varied sources of 
water and perhaps the most important component of securing a 
reliable and high-quality water supply.
    Very briefly, I would like to look at the four tools that 
we believe are part of the answer. No one is a silver bullet, 
but Congress and the State have got to be looking at improving 
irrigation and water use efficiency with the potential 
availability to transfer that water, increasing access to 
groundwater storage and conjunctive use of surface and 
groundwater supplies, purchasing drainage-impacted lands from 
willing sellers, and a lot of what you have heard about today 
is using the environmental water account to protect fish and 
species of concern from delta pumping while minimizing impacts 
to water project operations.
    Just to conclude, one of the areas of California, our 
largest reservoir are actually its aquifers, and unfortunately, 
over the years, the State, we have not really demonstrated 
leadership in evaluating and promoting the use of what could be 
millions of acre-feet of potential storage in Central Valley. 
If I had to leave one impression with the committee today, it 
would be that we ought to be looking at pursuing the 
complicated task of this evaluation and it will pay off in the 
long run. Even conservative estimates of the potential for 
groundwater supplies are huge. The CVP's own studies of 
groundwater recharge programs were formed by the CVPIA least 
cost yield plan, estimated a potentiality for nearly a million 
additional acre-feet of yield from groundwater sources.
    Again, in conclusion, and I have stated previously, we do 
not believe there really is this particular crisis. It is more 
a crisis mentality and it is going to persist, and the tensions 
that exist between the competing users will be exacerbated if 
we do not more actively promote the tools available to more 
creatively manage the CVP's and the California water supplies. 
We urge the committee to help foster this spirit of creativity 
by supporting and promoting measures to improve agricultural 
water use efficiency, industrial water use efficiency, 
increasing groundwater banking and conjunctive use, will create 
water savings from retiring drainage problem lands and 
establish new environmental water assets.
    Dick Moss mentioned earlier when we started today's 
hearings about the situation on the San Joaquin and the Bay 
Institute was part of that collaborative effort with the water 
users and I think that is an example where we can be working 
together. We are doing the technical work on that restoration 
strategy and CALFED did provide funding to help make that 
happen. So that is an example where we can work together and 
come up with solutions.
    So with that, I will close and be happy to answer any 
questions, the time permitting.
    Mr. Doolittle. Thank you.
    [The prepared statement of Mr. Davis follows:]

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    Mr. Doolittle. Mr. Tenney, how much more optimization in 
your opinion could be implemented? I am under the impression 
that quite a bit has been done in this area and you pick up 
sometimes in people's comments on this general subject of the 
need to improve water supply, that there is a lot of waste in 
the system, that if we could just use it more efficiently, we 
would solve our problem. How much room is left to do that kind 
of thing, do you think?
    Mr. Tenney. Let me respond to that first representing 
Sacramento Valley, because I think there is a large, frequently 
a large misunderstanding of the valley in the belief that there 
is a lot of water going to waste up there. It is a unique 
region in that the water that is not used, beneficially used in 
agriculture by the plants returns to the system and is 
available to downstream users.
    CALFED organized an independent review panel approximately 
a year and a half ago now which took a specific look at that 
question of how much water was available, real water was 
available throughout the system, and they found through the 
Sacramento Valley a relatively small amount of new water, real 
water, that was available. They did, however, find that 
efficiency could be improved and they found that through better 
water management, water could be made available for other 
purposes, like remanaging water for specific environmental 
purposes.
    So that is a point that often gets confused because many 
people see the opportunity for environmental improvement, mix 
it up with the question of reliability. There is, frankly, not 
a lot of water to contribute to the reliability side. There are 
opportunities, and I believe some of the CALFED processes that 
are afoot right now, specifically the ag use, water use 
efficiency program, has attempted to establish incentive 
programs that allow agriculture to step up and do some things 
that their own economics do not otherwise allow them to do. It 
is one area of CALFED I happened to have participated on that 
advisory panel and I think it holds some promise and we would 
certainly propose in the Sacramento Valley that we move forward 
with that kind of incentive conservation program.
    Mr. Doolittle. Thank you. Mr. Wilson, how much does your 
agency generally pay for the water that you get from San Luis 
reservoir?
    Mr. Wilson. I am not sure of the exact cost break, of what 
they are paying for San Luis reservoir water right now. I can 
get that information from Joan Maher, who is with me, and get 
it back to you before the day is over.
    Mr. Doolittle. That would be fine for the record. Do you 
have a rough sense of the range, maybe, that we are talking 
about?
    Mr. Wilson. Yes. My guess is somewhere around $200 an acre-
feet.
    Mr. Doolittle. OK. So you pay $200 an acre-feet for water 
out of that reservoir. So I take it if you could purchase--
well, how much would you be willing to pay? If you could get 
water from some other place, what is a realistic figure in your 
mind as to what it would be worth to improve your quality and/
or reliability?
    Mr. Wilson. Can I answer that question this way? I was 
there when ground was broken for San Luis reservoir. I was 
there when Pat Brown made his speeches about what it was going 
to do for Santa Clara County and the counties on the other side 
of the hill, and John F. Kennedy, the promises that he made. We 
invested over $350 million of local infrastructure in order to 
receive that water, plus we are paying for the San Philippe 
pumping plant and all that works that provide the water.
    I think the question is moot. I think we paid for 150,000 
acre-feet of water a year. We are lucky to get half of that. 
The question is, how can we get the water that we are supposed 
to be getting from the system as it is?
    Mr. Doolittle. Well, let me just observe, and the workup 
was done 5 years ago of what Auburn Dam water would cost, and 
with power features 5 years ago, it was estimated that it cost 
$90 an acre-foot. Without power features, it was $120 an acre-
foot. So I gather, based on what you are paying, you would view 
that as a bargain.
    Mr. Wilson. If you could deliver it to Santa Clara County 
for that.
    Mr. Doolittle. Well, obviously we would add to it to get it 
there, but it sounds like it might end up for about what you 
are paying.
    Mr. Bradley, I like your approach. You are the first person 
that has come up here today--I am sure some have thought it, 
but it seems like the solutions being talked about are, indeed, 
only incremental solutions and you said they ought to be 
exponential. I agree with you. That is why I support on-stream 
storage as well as other types of adjustments to the system 
that can be done.
    What happens? Suppose you do not get the water that you 
need for the manufacturing in Silicon Valley. I mean, how much 
money would be lost per day?
    Mr. Bradley. I was trying to get a sense for that talking 
to a manager at Intel today and he said it is a difficult 
question to get your hands around. Of course, some of that 
information is proprietary, so we do not want to have to do any 
bloodletting after I tell you. It is safe to say that a 
reasonably sized fab plant could lose millions of dollars a 
day, and that is not the only factor at work here. As you know, 
that kind of high-tech product is time sensitive. You stand to 
lose your market if you do that too many times, compared to 
other types of industries.
    So both of those factors are quite important, and that is 
just the hard manufacturing side. As you know, Silicon Valley 
is not just doing manufacturing, it is into idea creation and 
incubation and it is the perception of the value of the valley 
and what it offers that allows us to attract people who are 
intelligent and well-qualified to do the kinds of things we do.
    So those two factors, the hard reality of, yes, we can put 
down fabs if they get waters that have a salinity that goes too 
high because their plant that takes out the additional salts 
and metals just cannot handle the additional load that is in 
the water. So they are both important, but I think the 
perception of loss of value is perhaps even more significant 
because the No. 1 pain threshold for executives is, we cannot 
get people to come here. Here is another reason not to come 
here, so it will go somewhere else, perhaps overseas. I am sure 
that is attractive to those who are investing locally.
    Mr. Doolittle. Are those companies capable of building 
their own facilities somehow to deal with this problem in the 
event that the salts get too high? I mean, can they build 
things to take it out or not?
    Mr. Bradley. I am sure they prefer to go elsewhere before 
they do that.
    Mr. Doolittle. Right. OK.
    Mr. Bradley. I mean, when we talk to some of our other 
partners, the publicly owned treatment works of wastewater is 
also an issue that we look at, and when you apply stricter and 
stricter standards, you start getting into technologies which 
are far more expensive and difficult to pull off. Reverse 
osmosis is something that maybe you are familiar with. I think 
the estimate for the Santa Clara-San Jose water treatment plant 
is $1 billion to put in the reverse osmosis system.
    Mr. Doolittle. Now, Orange County, I think maybe the Orange 
County that was up here represented does that, I believe, but--
--
    Mr. Bradley. I am not aware of it at this stage.
    Mr. Doolittle. What do you think, Mr. Wilson? Are you up 
for $1 billion?
    Mr. Wilson. Yes, we have a policy now in our district to 
have 10 percent of our water to be recycled water by the year 
2020. That is going to require advanced treatment of water to 
do that and we are going to have to use that water for 
groundwater recharge and for streamflow augmentation. We will 
not be putting it back into our water system directly, but use 
it that way.
    Mr. Doolittle. If we had more time, I would ask more 
questions. This has been an excellent panel.
    Mr. Pombo?
    Mr. Pombo. Mr. Bradley, I think I could solve a lot of your 
problems if you just located on the other side of the hill in 
Tracy.
    Mr. Bradley. I will get right on it.
    [Laughter.]
    Mr. Pombo. Our housing costs are lower. We are closer to 
the water. All of your employees that live in my district and 
drive over there anyway could just stay close to home.
    Mr. Bradley. Mr. Chairman, could you make it so?
    Mr. Doolittle. If you help us get that dam, all things 
could be possible.
    [Laughter.]
    Mr. Pombo. I think we can work something out here.
    Mr. Bradley. I suspect the mural behind you is the secret 
to that. You will need divine intervention, I think.
    [Laughter.]
    Mr. Pombo. Mr. Davis, I wanted to ask you a couple of 
questions about what you listed as your tools. The No. 1 issue 
that you had here is improving irrigation efficiency, and I 
know this question has been asked of another panel member, but 
I would like to ask you, how much efficiency do you think is 
left?
    Mr. Davis. I think it is an excellent question, Mr. Pombo. 
Currently, irrecoverable losses from evaporation in irrigated 
fields run as high as 9 percent using sprinkler systems and as 
high as 30 percent on fields using flood irrigation. Reducing 
evaporation by even a few percent could generate from half a 
million to two million acre-feet of water savings.
    Mr. Pombo. I read that in your testimony and I believe that 
it is accurate. I believe that that is accurate information. In 
the time that I have been farming, I have seen us go from using 
almost exclusively flood irrigation to it being very rare. That 
has been a huge savings in the amount of water. To go from 
sprinkler systems into a drip irrigation system or something 
like that to save that evaporation that you are talking about, 
you are talking about a massive cost in the crops that it is 
possible to go to drip irrigation and an impossibility in a 
number of the crops that we produce, at least in my area.
    So, I mean, the reality is that a lot of that savings that 
you talk about in evaporation, the farmers, because of the 
increased costs of water, because of a number of other factors, 
including availability, have already done everything that they 
can reasonably do in the current system.
    Mr. Davis. I know you are very sympathetic to this, as am 
I. I think we all have a lot to learn about what types of 
technologies come on and how we can help the agricultural 
community achieve those resource needs. For example, though, 
this is one area where I have high hope for CALFED. They are 
looking very aggressively at an agricultural water use 
efficiency program which will provide loans and grants to the 
agricultural water users, suppliers, and managers to help find 
improvements, and I think it is an area, when you look at both 
the east side and the west side, there are huge opportunities.
    Mr. Pombo. I think it is great that they are doing that. 
The reality is that economic forces have forced the agriculture 
community to do this already. If there is some magical thing 
out there--I do not know how you are going to use drip 
irrigation in my wheat fields or my hay fields. You do not do 
it. There is no way that you are going to be able to do that. 
So a lot of the potential savings that you are talking about 
economically is just not--there is no way to get there in most 
crops, and in some crops, it is impossible.
    Mr. Davis. I think that there are a number of different 
studies that have been produced on that one. The one I am most 
familiar with is with regard to alfalfa in our State and the 
amount of water that it actually takes to grow that crop. I 
believe, and I am aware of your concerns and I think CALFED is, 
as well, and----
    Mr. Pombo. But, you see, you put this in as one of your 
solutions. That is why I am asking you.
    Mr. Davis. Absolutely.
    Mr. Pombo. Hay does use a lot of water.
    Mr. Davis. Yes, it does.
    Mr. Pombo. And unless you want to just say, OK, we are not 
going to produce hay anymore in the Central Valley of 
California, which may be what you are proposing, I do not know, 
but if that is the solution, then you have to answer me another 
question in terms of where are we going to get the hay? Where 
is it going to come from?
    Mr. Davis. Personally, I am not suggesting that we do not 
grow hay in the Central Valley of California. What I am 
suggesting is that the Federal Government and the State 
Government and the CALFED process is looking at what could be 
done in the Central Valley. It is a huge agricultural producer 
and we rely on that and I am very respectful of that. But I 
think further analysis will actually show, both on the east 
side and the west side in particular, when you look at a 
different set of issues, some of the drainage issues and the 
discharge requirements that you are going to be facing, all I 
am suggesting is that there are more tools available to us to 
use and we ought to be looking at them very aggressively, in 
particular, investments in helping you meet your needs.
    Mr. Pombo. I will move on to your next point, but people 
continue to bring this up and act as if somehow this is going 
to solve the problem. I do believe that there are efficiencies 
that we can find. I do believe that there is still room for 
improvement. I believe that is there. Will that solve that two 
to six or seven million acre-feet a year of water? It is not 
even close. So that is not going to solve all the problem. I 
mean, you can prove anything you want with facts and I could 
prove with facts that we have already given more than we get. 
But just leaning on this as the solution, I just do not see it.
    Let me ask you about your second point in terms of 
increasing access to groundwater storage. From reading this, am 
I to believe that you and the organization that you represent 
now support the groundwater recharge efforts?
    Mr. Davis. I think we are very much in favor of looking at 
groundwater resources and groundwater banking as an 
alternative, one more set of the tools in the toolbox. And, in 
fact, there are potentials there that are already being 
explored. If the science can be done, we have all heard that 
today, the science that is going to be necessary to help 
identify opportunities and put the packages together, we would 
let the science speak for itself. And if it were proven that 
that were part of a comprehensive package that would meet the 
needs of the State and get the type of resource recovery for 
fish and wildlife purposes that we are interested in, by all 
means, we would look at that.
    Mr. Pombo. Groundwater recharge projects involve conveyance 
systems. The water has to come from somewhere to put through 
that conveyance system to go into a groundwater recharge 
project. I mean, what you are suggesting here, I do not believe 
in the past are the kind of projects that you have supported. I 
mean, it is great to say, well, we are not going to build any 
on-stream storage facilities. We are not going to build any new 
surface water storage facilities. We are going to do 
groundwater recharge and we are going to do that, and that is 
fine if that is what we do. But if that is the direction that 
we go, it also means that we are going to have to have support 
to do that.
    Like I said earlier, and I am sure you heard me, I had a 
very small groundwater recharge project in my district. It met 
fierce opposition from the environmental community because it 
involved building a conveyance system in order to get the water 
there.
    Mr. Davis. You have firsthand experience and that is 
something that goes a long way. But part of this comprehensive 
package that we are all talking about is getting groundwater 
management in place in certain areas, measuring--it is 
complicated, but if you are telling me that that is where you 
would prefer to go and be willing to put your resources toward 
fleshing out the mechanics and the details behind that, as 
opposed to large and very expensive surface storage that is 
very environmentally damaging, I would say that you would have 
a better road going down that path than the path that is being 
supported by so many members of this committee.
    Mr. Pombo. I do not know if it is necessarily where I want 
to go, but I can tell you that this is a serious problem that 
needs to be solved and it seems like no matter where we have 
turned over the past several years, we have met opposition. Mr. 
Chairman?
    Mr. Doolittle. I thank the members of this panel. I 
apologize that we have to bring it to a close, but----
    Mr. Pombo. Mr. Chairman, before you close it, I would like 
to ask Mr. Davis one additional question.
    Mr. Doolittle. Sure.
    Mr. Pombo. One of the things in your testimony is you talk 
about the land retirement and you say the land retirement is 
75,000 acres in here. That is, I believe, about 16 times the 
amount of irrigated land that I have in my district. Where 
would we get 75,000 acres of irrigated land to retire?
    Mr. Davis. Well, I think if you also noticed, I was talking 
about willing sellers. So I cannot tell you exactly where those 
are going to be.
    Mr. Pombo. Willing, unwilling, condemnation, where is the 
75,000 acres going to come from? Do you have any clue what the 
impact would be on the economy of California to take 75,000 
acres of productive farmland out of production?
    Mr. Davis. That figure was actually derived from the San 
Joaquin Valley drainage program numbers----
    Mr. Pombo. I pulled it out of your testimony, so----
    Mr. Davis. That is where I am telling you where it came 
from, Mr. Pombo. I do think on the west side, when you look at 
the drainage issues and the amount of volume of water that we 
are bringing in there, the history of the selenium issue and 
some of the discharge restrictions that that placed, this is an 
issue that we are going to face. I believe that voluntary land 
retirement should be, again, one more tool at the disposal of 
the managers that are implementing a broad comprehensive 
program, and it may not be that they get the full 75,000 acres, 
but if it is a willing seller and it can be done, it is another 
tool that at least has to be kept as part of the package.
    Mr. Pombo. If you offer enough money, you may find a 
willing seller. If you regulate them out of business, you may 
be able to find a willing seller. But that does not mean that 
it is good for the economy of California.
    Mr. Doolittle. We will urge you to respond rapidly to the 
further questions that we put to you in writing, and with that, 
this panel is excused and the hearing is adjourned.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned.]