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67–477 DTP




before the


of the





Serial No. 106–88
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Printed for the use of the Committee on Resources

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


DON YOUNG, Alaska, Chairman

W.J. (BILLY) TAUZIN, Louisiana
JIM SAXTON, New Jersey
JOHN J. DUNCAN, Jr., Tennessee
KEN CALVERT, California
RICHARD W. POMBO, California
WALTER B. JONES, Jr., North Carolina
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JOHN PETERSON, Pennsylvania
RICK HILL, Montana
DON SHERWOOD, Pennsylvania
ROBIN HAYES, North Carolina

NICK J. RAHALL II, West Virginia
BRUCE F. VENTO, Minnesota
DALE E. KILDEE, Michigan
FRANK PALLONE, Jr., New Jersey
CALVIN M. DOOLEY, California
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ADAM SMITH, Washington
CHRIS JOHN, Louisiana
RON KIND, Wisconsin
JAY INSLEE, Washington
TOM UDALL, New Mexico
MARK UDALL, Colorado
RUSH D. HOLT, New Jersey

LLOYD A. JONES, Chief of Staff
CHRISTINE KENNEDY, Chief Clerk/Administrator
JOHN LAWRENCE, Democratic Staff Director

Subcommittee on Water and Power Resources
JOHN T. DOOLITTLE, California, Chairman

KEN CALVERT, California
RICHARD W. POMBO, California
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CALVIN M. DOOLEY, California
ADAM SMITH, Washington

ROBERT FABER, Staff Director/Counsel
JOSHUA JOHNSON, Professional Staff
STEVE LANICH, Minority Staff


    Hearing held March 30, 2000

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

Statement of Witnesses:
Bamert, Edward ''Tom'', Chairman, Regional Council of Rural Counties (RCRC), Jackson, California
Prepared Statement of
Bishop, Wally, General Manager, Contra Costa Water District, Concord, California
Prepared Statement of
Bradley, Justin, Interim Environmental Director, Silicon Valley Manufacturing Group, San Jose, California
Prepared Statement of
Davis, Grant, Executive Director, The Bay Institute, San Rafael, California
Prepared Statement of
Hannigan, Tom, Director, California Department of Water Resources
Prepared Statement of
Hayes, David, Deputy Secretary, Department of the Interior, Washington, DC
Prepared Statement of
Moss, Richard M., General Manager, Friant Water Users Authority, Lindsay, California
Prepared Statement of
Nomellini, Dante John, Manager and Co-Counsel, Central Delta Water Agency, Stockton, California
Prepared Statement of
Southwick, Brenda, Associate Counsel, California Farm Bureau Federation, Sacramento, California
Prepared Statement of
Sprague, Stan, General Manager, Orange County Municipal Water District, Fountain Valley, California
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Prepared Statement of
Tenney, O.L. ''Van'', General Manager, Glenn-Colusa Irrigation District, Willows, California
Prepared Staement of
Yardas, David, Senior Scientist, Environmental Defense Fund, Oakland, California
Prepared Statement of
Wilson, Larry, Board of Directors, Santa Clara Valley Water District, San Jose, California
Prepared Statement of
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.
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    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.
    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.
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    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.
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    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.
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    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.
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    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.
    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?
    Mr. MOSS. Thank you very much, Mr. Chairman.
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    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:
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    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.
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    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:]

    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?
    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.
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    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.
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    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.
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    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:]

    Mr. DOOLITTLE. Thank you.
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    Our next witness will be Mr. Stan Sprague, general manager of the Orange County Municipal Water District.
    Mr. Sprague?
    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.
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    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.
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    Mr. Chairman, I would be happy to answer any questions you have. Thank you very much.
    [The prepared statement of Mr. Sprague follows:]

    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?
    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.
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    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.
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    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:]

    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?
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    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.
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    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.
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    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.
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    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?
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    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?
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    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.
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    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?

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    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.
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    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.
    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.
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
    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.
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    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——
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    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.
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    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.
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    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.
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    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
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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——
    Mr. MILLER. George Bush wouldn't make you secretary, would he?
    Mr. MILLER. Rumor, rumor, rumor.
    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.
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    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——
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    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?
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    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.
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    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.
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    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.
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    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.
    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.
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    Mr. DOOLITTLE. Yes, that has already been approved, so your full statement will be included.
    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.
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    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:]

    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.
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    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.)
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    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.
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    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?
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    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.
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    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?
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    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.
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    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.
    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.
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    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.
    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.
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    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.
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    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.
    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.
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    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.
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    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:]

    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?
    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.
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    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.
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    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:]

    Mr. DOOLITTLE. Our next witness will be Mr. David Yardas, Senior Scientist with Environmental Defense. Mr. 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.
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    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.
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    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.
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    Mr. DOOLITTLE. Thank you.
    [The prepared statement of Mr. Yardas follows:]

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

    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.
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    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?
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
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    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.
    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?
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    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.
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    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.
    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.
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    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.
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    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——
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    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?
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    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.
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    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.
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    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.
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    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.
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    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:]

    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?
    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.
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    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.
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    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.
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    Mr. DOOLITTLE. Thank you. I looked that book over. That is pretty interesting, I thought.
    [The prepared statement of Mr. Wilson follows:]

    Mr. DOOLITTLE. Our next witness will be Mr. Justin Bradley, Interim Environmental Director of the Silicon Valley Manufacturing Group. Mr. 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.
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    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.
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    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.
    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.
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    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.
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    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.
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    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:]

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

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    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:]

    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.
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    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.
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    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.
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    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——
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    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.
    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.
    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.
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    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.
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    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.
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    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.
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    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.
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    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.]