Reclamation's Terry Fulp and a new agreement with Mexico that has environmental benefits for the Colorado Delta discussed at Metropolitan's Water Planning and Stewardship Committee meeting

At the November 5^th meeting of Metropolitan Water District’s Water Stewardship and Planning Committee, Regional Director for Reclamation’s Lower Colorado River Region Terry Fulp addressed the Committee, and Metropolitan staff presented some details on a new multi-faceted agreement with Mexico that includes provisions for sharing both surpluses and shortages on the river, as well as provide for some environmental flows for the Colorado Delta.

RECLAMATION’S TERRY FULP ADDRESSES THE COMMITTEE

In September of 2012, Terry Fulp was named Regional Director for the Bureau of Reclamation’s Lower Colorado River office. Mr. Fulp is certainly not a newcomer to the river, having been with the Reclamation’s Lower Colorado region since 1989. One of his many accomplishments has been to lead the successful effort with the Colorado Basin states to develop additional operational guidelines for Lake Powell and Lake Mead to address the impacts of long-term drought in the basin. As Regional Director, Mr. Fulp will oversee all Reclamation operations in southern Nevada, southern California, most of Arizona and portions of Utah and New Mexico. Mr. Fulp is here today to address the Water Planning and Stewardship Committee.

Mr. Fulp began by saying that for the last 20 years or more, the Bureau has operated on a philosophy of transparency, openness, collaboration and partnership, and Mr. Fulp will continue to ascribe to those principles. The problems on the Colorado River are extremely complex, and include many views, many stakeholders, and many water rights holders: “Because of all of those complexities, we believe this partnership and collaborative approach is the only way we can move forward,” Mr. Fulp said. However, the days of fighting are not gone, he acknowledged: “but I think what we’ve all seen over the last decades is the power that collaborative approaches give to us and the opportunity for finding innovative, creative, and sometimes very unique solutions.”

One of Mr. Fulp’s highest priorities will be to continue the implementation of the decision made in 2007 on how best to operate Lake Powell and Lake Mead for the benefit of both the upper and lower basin through 2026. The bottom line to that set of guidelines is to share the gain of high flow years and share the pain of low flow years between the two basins. “We’re 6 years into that agreement … from my perspective so far, these guidelines have done exactly as we’d hoped,” said Mr. Fulp.

Mr. Fulp acknowledged that a lot depends on Mother Nature, pointing out that 2011 was one of the highest inflows over the 100 year record with inflows 140% of average, but that year was then followed by 2012 being a really low year with inflows of less than 50% of average. It’s because of the high variability in this system which is why there is so much storage, he said: “The real question is whether this storage is enough, and this study we’re about to publish, the Colorado River Basin Study, … will make that very clear that the storage is not enough over the next 50 years most likely, given the kinds of scenarios we are seeing both for inflow and demand.”

The proposed agreement with Mexico to be discussed today is within the spirit of collaboration, and it’s really the logical next step from those guidelines, which applied only to the U.S.: “We all knew the next step was to look across the border in that same cooperative and collaborative manner to see what we could do that could benefit both countries,” said Mr. Fulp.

The other priority is the federal QSA, otherwise known as the Colorado River Water and Delivery Agreement; Mr. Fulp said that the agreement is extremely important to Reclamation and he assured the Committee that Reclamation will work diligently to solve the implementation issues with the large transfer that have been seen to date, and will continue to work collaboratively with all the parties, including Metropolitan Water District, to find solutions to those issues.

In closing, Mr. Fulp said that Reclamation will also continue to be as cost-efficient as possible: “We have to wake up every morning and assure we are acting in the public best good, and that includes saving money where we can, and so we’ll continue that as well.”

AGENDA ITEM 8-4: PROPOSED MINUTE 319 TO U.S. MEXICO COLORADO RIVER TREATY:

Bill Hasencamp, Metropolitan’s Colorado River Program Manager, presented the agenda item to the Committee. Noting that it was a long road to get to this point, he now has agreements to put before the Committee for consideration that relate to implementation of proposed Minute 319 to the U.S. Mexico Treaty. The minute is a 5-year deal – not a long term deal, Mr. Hasencamp acknowledges, but it does lay the foundation for possible long-term agreement after 2017.

Mr. Hasencamp explained that under proposed Minute 319, Mexico would continue to be allowed to store water in U.S. reservoirs, just as they have been storing water under the previous Minute 318. The proposed Minute 319 provides for certain rules that Mexico has agreed to for sharing both surpluses and shortages. It also provides for a pilot exchange program that is especially important to Metropolitan where Mexico will store water in Lake Mead that will be converted to Intentionally Created Surplus (ICS) that could be used by U.S. users. This is significant because for the first time, a chunk of water under this pilot program will be used for environmental purposes in the country of Mexico. And lastly, there’s the potential for future projects, as this Minute allows for additional projects in the future.

The pilot project is an agreement where the U.S. and local funding agencies will fund conservation programs in Mexico in exchange for Mexico reducing their diversions, said Mr. Hasencamp. The conserved water is stored in U.S. reservoirs and at the end of the 5-year period, the water would be converted to binational ICS that is stored in Lake Mead and is available whenever the funders need the water.

Important to Metropolitan is how surpluses on the Colorado River will be shared with Mexico, said Mr. Hasencamp. The Upper Basin states have taken the position that any surplus that went to Mexico has to come out of the Lower Basin’s allocation, so if and when there is a surplus, the Lower Basin must reduce their use to provide surplus to Mexico. An agreement has been negotiated whereas in the event of a surplus, each of the three Lower Basin states will reduce surplus take by one-third of the total. Mr. Hasencamp noted that there is a low probability of surplus during the term of the agreement – less than 17% in any one year over the next five years, but in the event a domestic surplus triggered, Metropolitan would have to reduce our surplus by 13,333 acre-feet, or basically a third of the 40,000 acre-feet that would go to Mexico. However, in order for a surplus to be triggered, Lake Mead would have to recover from drought and raise about 40 feet from where it is today.

Mr. Hasencamp explained that the reason for giving up the surplus is to get to the funding agreement for the pilot project. The total pilot project cost is $10 million; Metropolitan would fund 50%, and the Central Arizona Project and Southern Nevada Water Authority would fund 25% each. And in exchange for the $5 million, Metropolitan will receive 47,500 acre-feet of water; that works out to about $105 per acre-foot, and that water can be stored in Lake Mead through 2036 and is not subject to evaporation losses. The $5 million will go towards funding conservation projects within Mexico, and Mexico will in turn reduce the amount of water they take from the Colorado River.

During the negotiations, Mr. Hasencamp said that Imperial Irrigation District expressed an interest in being a part of the funding agreement which precipitated many discussions between MWD and IID. They are not part of the funding agreement now, but the agreement has an option for IID to participate at a later date upon mutual agreement with MWD.

Agreements required from Metropolitan include a forbearance agreement between the other surplus contractors in California, Arizona and Nevada to ensure that the water made available by the pilot project will go to the agencies that funded the project; a delivery agreement between Metropolitan and Reclamation with terms on how they would receive the ICS water; and an interim operating agreement which defines the rules on how water will be made available to Mexico. The Committee is being asked today to authorize Metropolitan to enter into these multiple agreements that are required and to approve payment of up to $5 million for the pilot project.

DISCUSSION (SELECTED PORTIONS)

Metropolitan’s General Manager Jeff Kightlinger told the Committee that this presentation focused on portions of the proposed Minute that primarily pertain to Metropolitan, but there are a lot of other important issues that were addressed: “More important to the other states perhaps was the shortage sharing – that was one of the key issues, not so much to California but to Arizona and Nevada as they are first in line if a shortage occurs. There’s a number of environmental benefits, such as a pulse flow that Reclamation is going to pay for, potential creation of environmental benefits within Mexico that could be credited to the MCSP, so there’s a lot of detail but until the full Minute is released, we’ve chosen to focus on the Metropolitan pieces and our need for funding for the purchase of water, which we feel is an excellent opportunity to get water for about $100 per acre-foot that has no losses attached to it,” said Mr. Kightlinger. It also sets a great precedent for working with Mexico which Metropolitan hopes to do so in the future, he noted, and said that the full details on the Minute will be presented at an upcoming meeting, probably in December or January.

Director Peterson said that he was fully supportive of the program, but had concerns over Imperial Irrigation District’s participation.

Mr. Kightlinger answered that IID’s participation would be contingent upon reaching an agreement with Metroplitan. Metropolitan has indicated a willingness to work out something with IID for a portion of the water as long as it is for new M&I uses, such as energy projects, that come online in the next 5 years. It is difficult for IID to provide water for those purposes under the structure of their contract with Reclamation, which is for agricultural purposes, Mr. Kightlinger said: “We think that sets a good precedent to IID and other agricultural contractors, that to the extent that they start converting to M&I uses – energy programs, that they go out and get new water, separate and apart from the agricultural contracts. We actually think that is a good result for Metropolitan but we would have to see that it is a true new M&I use that is coming online in the next 5 years.”

Director Brick as asked who or what agency would be implementing the pilot conservation projects anticipated, and also what impact will environmental use in regards to the Colorado Delta will be included as part of the conservation projects?

Mr. Kightlinger answered that Mexico will be in charge of implementing their conservation projects. Included in the conservation program is fallowing and lining canals and other efficiencies down in Mexico, and the way it will be verified is that they will reduce their use of Colorado River water and the water will just stay in Lake Mead during that year. “We don’t want to get in the business to oversee or verify what is happening in Mexico,” said Mr. Kightlinger. “The verification will be what is happening at the border.”

As far as the water that will go towards the environment, Mr. Kightlinger said that a chunk of water will be dedicated in Lake Mead for environmental purposes, such as pulse flows down the river for the Colorado Delta and the limitrophe section; however, the actual details of how the water will be released for the benefit of the Colorado Delta over the next few years is still being worked out by environmental groups.

OUTCOME: The directors approved the motion to allow Metropolitan to enter into the necessary agreements.

Click here to watch the webcast of Metropolitan Water District’s Water Stewardship and Planning Committee meeting held on November 5, 2012.
Click here for the Board Letter and Attachment.
Click here to view the power point presentation for this item.

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