[Congressional Record Volume 168, Number 84 (Tuesday, May 17, 2022)]
[Senate]
[Pages S2545-S2548]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mrs. FEINSTEIN (for herself, Mr. Kelly, and Ms. Sinema):
S. 4231. A bill to support water infrastructure in Reclamation
States, and other purposes; to the Committee on Energy and Natural
Resources.
Mrs. FEINSTEIN. Mr. President, I rise today to speak about the STREAM
Act (Support to Rehydrate the Environment, Agriculture and
Municipalities Act), which I am introducing today alongside my
cosponsors Senators Mark Kelly and Kyrsten Sinema. This is a bill
intended to address the massive drought affecting much of the Western
United States.
As the past 2 years demonstrate all too painfully, drought
exacerbated by climate change--increasingly severe and prolonged
drought--is a stark reality for California and the West.
This has resulted in shortages of water for agriculture, for
irrigation, and increasingly threatens residential and business uses.
The drought has threatened endangered species and results in a drying
of the ground and plantlife that makes wildfire an even greater threat.
If we don't take action now, it is only going to get worse. Lawrence
Berkeley National Laboratory scientists project that climate change
will cause a 54-percent drop in the Sierras' snowpack within the next
20 to 40 years and a 79-percent drop by the end of the century. This
change alone could be devastating for California, because we absolutely
depend on this snowpack. The Sierra snowpack provides 30 percent of our
water supply and is our biggest reservoir.
For these reasons and others we need an ``all of the above'' water
strategy, including No. 1, increased water supply; No. 2, incentivizing
projects that build in environmental benefits and drinking water for
disadvantaged communities, and No. 3, investing in separate
environmental restoration efforts.
The bill I am introducing today helps meet this challenge in four
fundamental ways:
No. 1, it authorizes significant water supply funding that, in
combination with the bipartisan infrastructure law, would provide
California with 1.04 million additional acre-feet of water per year on
average, enough water for over 6 million people;
No. 2, it provides additional financial incentives for water supply
projects that include environmental benefits and drinking water for
disadvantaged communities;
No. 3, it reforms the Congressional review process to more quickly
approve water supply projects, and a new loan program combined with
grants to more cost-effectively fund new non-Federal water supply
projects; and
No. 4, it significantly invests not only in water supply projects but
also in environmental restoration to help imperiled species adapt to
climate change as well.
To demonstrate why this bill is so desperately needed, let me
illustrate the extent and damage caused by the current drought in the
West.
A precursor of the even more prolonged dry spells coming with climate
change, California's 2020 to 2022 drought has had severe impacts on
farms, cities, and the environment.
In 2021, the drought caused the California agriculture industry to
shrink by an estimated 8,745 jobs and incur $1.2 billion in direct
costs, according to a report prepared for the California Department of
Food and Agriculture by researchers at the University of California at
Merced. In addition, reduced water deliveries resulted in 395,000 acres
of cropland left dry and unplanted.
Counting ``spillover effects'' in the broader economy, the U.C.
Merced analysis found the total impacts were more than 14,600 lost
jobs, both full time and part time, and $1.7 billion in gross revenue
losses.
In both 2021 and 2022, homes in significant parts of the State have
been at risk of running dry. Last year, large parts of Marin and Sonoma
Counties and the Mendocino coast came very close to losing all water
supply. This year, much of Los Angeles, Ventura, and San Bernardino
Counties have been placed under emergency orders limiting them to once
a week landscape irrigation, with the possibility of a complete
irrigation shutoff by fall.
[[Page S2546]]
In California, one in eight acres statewide has burned from wildfires
in the last decade, with the past 2 years being the worst on record.
With 95 percent of the State experiencing drought as we enter into the
traditional wildfire season, we are poised for an even worse year this
year.
The drought has been devastating to the aquatic ecosystem as well as
our forests. As just one example, the endangered winter-run Chinook
salmon depend on sufficient cold water released by Shasta Dam to rear
juveniles in the Sacramento River.
With limited water available in 2021, NOAA Fisheries models predict
that approximately 75 percent of the winter run chinook salmon's eggs
died from elevated water temperatures. This is a species with three 1-
year age classes, and a prolonged drought could threaten the survival
of the species.
In order to increase drought resiliency in California and other
Western States, the bill authorizes the following funding over the next
5 years: $750 million for surface and groundwater storage projects, and
supporting conveyance, including $50 million for natural water
retention and release projects; $300 million for water recycling
projects; $150 million for desalination projects; $250 million for
environmental restoration projects; $100 million for drinking water for
disadvantaged communities; and $150 million for low-interest loans for
water supply projects.
This funding builds on the bipartisan infrastructure law's funding of
$1.15 billion for storage projects, $550 million for water recycling
projects, and $250 million for desalination projects.
The STREAM Act, in combination with the bipartisan infrastructure
law, would provide California with the Federal cost-share for
approximately 1,042,000 acre-feet per year of additional water supply,
or enough water for over 6 million people. This comes from the
following:
Enough funding for California to finally build three major off-stream
storage projects providing 370,000 acre-feet of water on average each
year: Sites Reservoir, the Los Vaqueros Expansion, and the BF Sisk
raise. In addition, the storage funding could provide an additional
55,000 acre-feet per year from some combination of other smaller
surface and groundwater storage projects like the Sacramento Regional
Groundwater Bank or Del Puerto Canyon Reservoir. All of the projects
are non-Federal projects with a 25 percent Federal cost share, with the
exception of the Federal BF Sisk Raise with a 50 percent Federal cost-
share.
Enough funding for 532,000 additional acre-feet from water recycling
projects, from the $300 million authorized in the bill plus $550
million in the bipartisan infrastructure legislation, with a 25 percent
Federal cost-share for projects.
Enough funding for approximately 85,000 additional acre-feet from the
$150 million authorized in the bill for desalination projects, plus
$250 million in the bipartisan infrastructure legislation, with a 25
percent Federal cost-share for projects.
While virtually everyone supports water recycling projects, surface
and groundwater storage projects are sometimes more controversial. I
want to point out a report just released today by the widely respected
Public Policy Institute of California, PPIC, which relates to the
benefits of additional surface and groundwater storage as California's
climate is changing.
Many climate forecasters emphasize that as climate change
intensifies, California will get more of its precipitation in a few
large to extraordinarily large storms fueled by atmospheric rivers, and
more of the precipitation will fall as rain rather than snow. In
between the bursts of atmospheric rivers, there will be longer and more
intense droughts. We have definitely seen a preview of this pattern
this year.
PPIC has studied these projections and estimated that there is
substantial water in wet years that is not needed to maintain healthy
Delta outflows but currently cannot be captured because California
lacks the infrastructure to store for future dry periods. PPIC suggests
that given this reality, cost-effective storage projects in appropriate
locations could help improve California's drought resiliency.
PPIC also argues that these storage projects should be managed for
environmental flow benefits as well as water supply benefits. This bill
would help with that because Federal funding for Sites Reservoir would
help provide cold water for salmon, and Federal funding for the
expansion of Los Vaqueros Reservoir would provide needed water for
wildlife refuges. Regarding cold water reserves for salmon in
particular, these reserves will be critical to prevent salmon runs from
being wiped out during the potential fourth, fifth, sixth and seventh
years of devastating droughts.
The bill's funding authorizations apply not just to California but
throughout the 17 Western States where the Bureau of Reclamation has a
presence. Many of these States have recently benefited from the Bureau
of Reclamation's storage, water recycling, and desalination programs
and/or have projects currently seeking funding from these programs,
including Arizona, Idaho, Washington, Oregon, Texas, Utah, Nevada, and
New Mexico. I believe the Federal funding assistance authorized by this
bill will be particularly important for all seven Colorado River basin
States as the States negotiate the next painful round of water supply
cuts from the Colorado River between now and 2026 in order to meet the
challenge of an increasingly dry Colorado River basin.
In Arizona, the STREAM Act would significantly advance the Salt River
Project's proposal to raise Bartlett Dam on the Verde River to
counteract the loss of approximately one-third of the nearby Horseshoe
Dam's capacity from accumulating sediment. The Bartlett Dam raise would
provide an additional 60,000 to 115,000 acre-feet per year or enough
water for 360,000 to 690,000 people.
The bill uses financial incentives to encourage storage and
conveyance projects to include environmental benefits and other public
benefits such as drinking water for disadvantaged communities. This is
important to ensure that the environment and disadvantaged communities
are included in our drought resilience strategies.
The bill authorizes low-interest loans for sponsors of storage and
conveyance projects if those projects solely provide irrigation and
general municipal and industrial water supply benefits.
In contrast, the bill authorizes grants for storage and conveyance
projects that include environmental benefits, drinking water benefits
for disadvantaged communities, or other public benefits either as part
of the project design or as part of a watershed restoration plan
adopted together with the project.
This access to grants gives project sponsors a strong financial
incentive to design environmental and disadvantaged community benefits
into their projects. This approach builds on the experience of the
Proposition 1 water bond California's voters passed by a 2-to-1 margin
in 2014, which also incentivizes projects with environmental and other
public benefits.
If storage and conveyance projects take these steps, they can get
Federal grants both directly for the public benefits and for an equal
value investment in the water supply component of the project. Thus,
the Federal Government will provide $50 million for the general water
supply benefits of a project if the project also has $50 million in
fish and wildlife or water quality benefits either directly from the
project or from an associated watershed restoration plan.
The bill not only increases funding for drought resiliency projects,
it expedites their approvals and assists them more cost-effectively,
stretching taxpayer dollars further.
The traditional Bureau of Reclamation model for approving and funding
new water supply projects has involved the following:
No. 1, reclamation studies new projects in detail, which can take a
decade or more for major projects;
No. 2, once Reclamation's studies are complete, Congress authorizes
projects individually, which can take another 3-5 years or longer in
many cases; and
No. 3, the design and construction can take a decade or longer.
One can quickly see that this model can end up taking decades to
construct significant new water supply projects. This is especially the
case given the limitations of Federal budgets and the increasing cost
of major protein recent years. Given the tremendous challenge
[[Page S2547]]
posed by climate change to western water supply, we need a nimbler and
more responsive model.
Mike Connor, the Deputy Secretary of the Interior during the Obama
Administration and currently Assistant Secretary of the Army for Civil
Works, testified in support of a new model during an October 8, 2015,
hearing before the Senate Committee on Energy and Natural Resources.
Deputy Secretary Connor stated:
The traditional Reclamation business model, in which
feasibility studies, consistent with the 1983 Principles and
Guidelines for Water and Related Resources Development, are
first authorized, funded, and submitted to Congress, and then
construction is authorized and funded, does not always
address the needs of project sponsors at the state and local
levels. Moreover, given budget limitations and the
availability of other available financing mechanisms, the
historic federal role in financing water storage projects
through the Bureau of Reclamation must be revisited with a
greater emphasis on non-federal financing.
In response to the concerns articulated by then-Deputy Secretary
Connor and others, the bill we are introducing today, building on the
2016 Water Infrastructure Improvements for the Nation Act, makes five
significant changes to the traditional reclamation model. These changes
expedite project approvals and make more cost-effective use of
available federal funding.
No. 1, Congressional authorization no longer required for non-Federal
projects.
First, the bill eliminates the need for Congress to authorize
individual water recycling and desalination projects and non-Federal
storage projects with a Federal investment of less than $250 million.
It can take 3 to 5 years or longer for projects to get legislatively
approved. In fact, zero new water recycling projects were authorized
from 2009 to 2017 despite dozens of meritorious projects with approved
feasibility studies.
Federal storage projects, which are often more controversial,
continue to require congressional authorization, as do non-Federal
storage projects with a greater than $250 million Federal investment.
The bill shortens the timeline for congressional approval of these
projects through directing Reclamation to follow a process that the
Army Corps of Engineers uses to notify Congress of completed
feasibility studies each year to set up an orderly timeline to
authorize projects.
No. 2, non-Federal funding is required up front.
Second, the bill no longer requires 100 percent Federal funding up
front as was necessary under the traditional Reclamation model.
Instead, the bill allows a maximum of 50 percent Federal funding for
federally owned projects and a maximum of 25 percent Federal funding
for non-Federal projects that are built by States, water districts, or
Indian Tribes.
Federal dollars can be stretched further by the partnerships with
States and water districts that will be fostered under the bill. For
example, the proposed expansion of Los Vaqueros Reservoir in California
would be funded nearly 50 percent by the State of California, which has
already conditionally awarded funding, in addition to potentially 20 to
25 percent by the Federal Government and the remaining 25 to 30 percent
by water users.
Multipartner projects like the Los Vaqueros expansion frequently have
multiple benefits. For example, much of the State and Federal funding
for the Los Vaqueros expansion would go to augment the water supply of
wildlife refuges that provide essential water for migratory birds on
the Pacific flyway. These benefits would complement the project's water
supply benefits for many Bay Area water districts.
No. 3, the new loan program is cost-effective.
Third, the low-interest loan program created by the bill for water
supply projects is an exceptionally cost-effective program. This
program, known as the Reclamation Infrastructure Finance and Innovation
Act, RIFIA, would use existing criteria for loans under the successful
WIFIA Program, the Water Infrastructure. Finance and Innovation Act.
The Office of Management and the Budget, OMB, has approved loans of
$2.3 billion for WIFIA in fiscal year 2018 backed by appropriations of
just over 1 percent of that amount, or $25 million in budget authority.
OMB was able to approve loans backed by just l percent of the loan
amount because there is a virtually non existent default rate for water
projects. Only 4 in 1,000 water infrastructure projects default, based
on a study conducted by the Fitch credit rating agency.
Given OMB's experience that Federal outlays need only cover l percent
of the loan cost for water projects, the $125 million in authorized.
Federal spending in the draft bill likely could support $12.5 billion
in water project lending authority.
Federal funding of 1 percent of the loan amount will typically return
10 to 25 percent savings in the repayment cost of the loans for the
water districts funding the projects. The total savings can be about 10
percent for AAA-rated districts and 20 to 25 percent for AA-rated
districts.
For example, the water users who are supporting the proposed Sites
Reservoir in northern California have estimated that the loans
authorized by this bill would allow them to pay only $512/acre-foot for
water delivered by the project instead of $682/acre-foot, or a 25
percent reduction in their costs.
Thus, the Federal Government can provide a loan at 1 percent of the
loan amount and save the project sponsors 10 to 25 percent of the
project cost. That is an exceptionally cost-effective Federal
investment.
There are at least three significant reasons that the loans are so
beneficial for the project sponsors:
The sponsors pay a substantially lower interest rate on their loans
than they would under the alternative of municipal bond financing.
The districts would not need to start loan repayments until 5 years
after substantial completion of the project, a substantial cost saver.
Loans are for 35 rather than 30 years, lowering annual debt service
costs.
Significantly, the loans include all the taxpayer protections from
the successful WIFIA and TIFIA, Transportation Infrastructure Finance
and Innovation Act, programs. In particular, the RIFIA loans would be
limited to 49 percent of the project costs, and the Federal loans would
have senior status in the event of any default. These provisions ensure
the taxpayer won't be harmed in any default where the project retains
at least 50 percent of its value, which is extremely likely for
ratepayer backed water supply projects.
No. 4, Federal grants and loans work together.
Fourth, the combination of low-interest loans and Federal grants of
up to 25 percent of project costs for non-Federal projects can allow
water users to make up the difference where the Federal Government is
no longer funding l00 percent of project costs up front. Many rural
communities, and in particular agricultural communities, are not able
to pay 100 percent of the cost of new water supply projects.
Under the bill I am introducing today, these communities will still
have to provide a significant cost-share for improving their water
supplies, and new water projects will have to be cost-effective enough
to justify that investment. However, the Federal--Government can help
build the best and most effective projects in increasing drought
resiliency by providing assistance through both grants and loans.
Finally, the longer and more severe droughts coming with climate
change will adversely affect not just farms and cities but also the
natural environment. The bill includes provisions to improve species'
drought resiliency as well.
The significant funding authorization of $250 million for
environmental restoration can be used to benefit many different
species, including fish and migratory birds. Some authorized uses of
this funding include: improved habitat for salmon, Delta smelt and
other fish species adversely affected by the Bureau of Reclamation's
water projects; additional water for wildlife refuges hosting migratory
birds along the Pacific flyway; improved stream gauges, monitoring, and
science to better understand how to restore species and to operate
Reclamation water projects with reduced environmental impacts; ensuring
that when Sacramento Valley rice growers sell their water and idle
their crops, some water is left behind and applied to bare fields in
late summer and early fall to create shallow flooded habitat during a
critical
[[Page S2548]]
shorebird migration period; and assistance in implementing water-
related settlements with State agencies and State water quality laws.
The bill would also authorize $50 million of the broader storage
funding for natural water retention and release projects.
These projects would help restore stream and river channels with
natural materials like wetlands. Like many other projects prioritized
by the bill, these projects could have multiple benefits, including
increased groundwater recharge, improved flood protection, and
increased floodplain habitat to benefit salmon and other species. I
look forward to receiving comments on ways to prioritize multibenefit
projects like natural water storage projects as we move forward with
the bill.
The bill also authorizes pay-for-performance environmental
restoration approaches that award grants contingent on the success of
the restoration effort. These approaches can expedite environmental
restoration and build public/private partnerships to increase the
number of acres restored.
In addition, the bill makes clear that it must be implemented
consistently with all Federal environmental laws, including the
Endangered Species Act, the National Environmental Policy Act, the
Clean Water Act, and all other environmental laws. All applicable State
laws must also be followed.
California is home to more than 40 million people, but our major
statewide water infrastructure hasn't significantly changed in the past
50 years, when we had only 16 million people.
We must modernize the system or we risk becoming a desert State.
Critically, this means putting in place infrastructure to allow our
cities, our farmers, and our natural communities to withstand the
severe droughts that we are projected to face as a result of climate
change.
I hope my western colleagues will join my cosponsors and me on this
bill because drought is a serious threat for all of our States.
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