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Secretary's Remarks

Secretary of the Interior's Remarks to the Colorado River Water Users Association, Las Vegas, December 17, 1998

Today marks the fourth year that I have joined you at this annual meeting to review our progress on managing the Colorado River. As in past years, I am pleased to report considerable progress toward our common goal of more efficient use of our shared water resource. Indeed it has been a remarkable year, perhaps the most significant on the River in many decades, for we are now on the threshold of resolving some of the most intractable and elusive issues that bring us to these meetings.

Each year I have stressed two overarching themes that should always inform our efforts: 1) The desirability of resolving water controversies through stakeholder consensus; and 2) the importance of conservation and consensual water transfers and similar transactions. And we have made progress in these areas as well.

Last year, I discussed steps necessary to bring California into line with its entitlement under the Colorado River compact. At the same time, California issued its draft " 4.4 Plan " , which set the stage for a series of developments designed to implement that plan. And in the last year California has made impressive progress toward the 4.4 goal, which I would now like to review in some detail.

In April of this year, the San Diego County Water Authority and the Imperial Irrigation District executed a water conservation and transfer agreement that provides the means for an ag-to-urban transfer of increasing amounts of water, rising to potentially as much as 300,000 acre-feet per annum. While that arrangement is subject to a variety of state and federal requirements, the essential transaction between San Diego and the RD is one important building-block of the 4.4 Plan. This is in addition to the 1988 MWD/IID agreement, under which the Met is entitled to up to 106,000 acre-feet per year of conserved ag water pursuant to a contract whose conservation measures I understand to have been fully implemented within the last year.

A second important element of the Plan was advanced when San Diego and the Metropolitan Water District reached an agreement that will permit the transferred water to be delivered to San Diego via an exchange agreement.

The 4.4 Plan took yet another step forward when the State of California appropriated $235 million to underwrite the lining of the, All-American and Coachella Canals, and to implement groundwater conjunctive use programs, which will provide se close to 100,000 acre-feet per year of conserved water, out of which both the the San Luis Rey settlement can be implemented, and additional water will be provided to the Met. Met has opened discussions with the San Luis Rey settlement parties to explore potential arrangement for delivering and/or exchanging 16,000 af of conserved canal lining water for the San Luis Rey tribes; as trustee for Indian tribes I attach great importance to completing this settlement.

When each of these elements is in place, Phase I of the California Plan will be ready for implementation, and California will be half-way to its 4.4 maf goal. I recognize the very considerable expenditure, both in human and economic terms, that the State of California has invested in moving the Plan forward, and I want to take this occasion to express my appreciation to California - with special thanks to the retiring Water Resource Department Director Dave Kennedy - for that effort.

As I emphasized in my presentation last year, however, the proposed IID/San Diego transfer and other ag-to-urban transfers of water in California cannot go forward unless and until the relative water rights of the Imperial Irrigation District and the Coachella Valley Water District are quantified, so that transfers can take place from a clear and settled baseline. I don't think anyone would contradict me if I characterized the traditional relationship between Coachella and Imperial as contentious. During the past several months, we, with the cooperation of the State, have engaged the two agencies in intensive negotiations designed to bring about a mutually agreeable quantification, that would convert the legacy of the 7-Party Agreement into clear, quantified water rights for each District.

I am very pleased to be able to announce that those negotiations bore fruit yesterday, when the negotiating teams for Imperial, Coachella, and the Department executed a Memorandum of Understanding that adopts a fundamentally new approach to quantifying the Districts' water rights, and which sets the stage for transfers to occur, and for an ag-to-urban water market to develop. The MOU establishes a conceptual agreement among the parties, and it anticipates that additional details and refinements will be worked out during a six-month " finalization " period. While the MOU reorders the relationships between Imperial and Coachella - the primary roadblock to transfers -I also am pleased to report that the Met has committed itself to engage actively in negotiations relating to unresolved issues during the six-month IID/Coachella MOU " finalization " period. As Winston Churchill might have said, " This is not the end. It is not even the beginning of the end. But it may well be the end of the beginning.'' Considering the intensity that marks the Colorado River water wars, I would classify the progress to date as a minor miracle. We shall keep the pressure on.

While the full terms of the quantification are still subject to finalization and are in some respects highly detailed, in basic outline it is essentially as follows.
• IID and Coachella will quantify between themselves their share of the third priority under California's 7-Party Agreement. The first two priorities, the Palo Verde Irrigation District and the Yuma Project, will remain unchanged.
• If the first two priorities take more water than anticipated, causing the total agricultural entitlement to exceed its 3.85 maf limit, IID and Coachella will absorb the shortage on a 90/10 basis.
• IID's entitlement will be capped at 3.1 maf and will include water to be transferred to Met, Coachella and San Diego, ultimately leaving a net diversion entitlement to the IID of approximately 2.7 maf.
• Coachella's entitlement will be capped at 468,000 acre-feet, composed of its historical use of 330,000 acre?feet plus water to be transferred and conserved under the plan.
• Other elements of the negotiation are a " peace " agreement between the two agencies not to challenge each other's water practices, and an expectation that the Met will build a conjunctive use facility in the Coachella Valley.
• The districts will also agree to support the implementation of surplus guidelines designed to provide reasonable assurance that Met's aqueduct is kept full through 2015.

I am very impressed that Imperial and Coachella have at last discovered their fraternal bonds and negotiated such an impressive quantification approach. I personally want to extend my thanks to the negotiating teams for the two Districts and to the heads of the respective District boards who have participated in all the intensive discussions that led up to the MOU - Tellis Codekas of Coachella and Lloyd Allen of Imperial. These folks have stepped up to the plate and delivered, and I commend them for their accomplishment and the onset of a new era of goodwill and mutual cooperation.

A next important step involves the Met, holder of the next California priority under the 7-Party Agreement. Before signing on, Met is waiting for the final piece of the California Plan puzzle to fall into place. Its concerns about river operations are entirely appropriate and timely. And that brings me to the matter of surplus guidelines. The draft California 4.4 Plan anticipated a first phase, under which California's need for Colorado River water would be reduced to 4.8 maf by 2015. During that time period, California has anticipated that the State would continue to be reliant on some available surplus in order to keep its aqueduct full. It is now time to move forward with this concept. I am prepared, as these other elements of the California Plan proceed toward finalization and implementation, to put into effect surplus guidelines that address Met's need to maintain a full aqueduct during this period, subject to the following provision: as a condition for continued implementation of the surplus guidelines, California must meet a series of benchmarks we will identify, to be monitored by the Bureau of Reclamation, designed to prevent backsliding and assure that Phase I is being regularly implemented on a schedule that will step-by-step reduce California's call on the Colorado River to 4.8 maf or less by 2015.

As to the substance of the surplus guidelines, I am aware of the proposal prepared by six of the seven basin states dated December 4th. On this issue, as on others, I reiterate my preference that all the basin states search for a recommendation on which they can agree. In light of California's needs, and the restrictions relating to surplus in Article II(B)2 of the Supreme Court decree in Arizona v. California, it would be particularly helpful for California to engage with the other basin states in an effort to find common ground. The time is now right for California and the other states to work together to negotiate surplus guidelines that will adequately recognize the achievement implicit in the steps California is taking in reducing its reliance on the Colorado River by providing assurances that Met's aqueduct can remain full during the intensive period of conservation that lies ahead. I have asked Reclamation to develop proposed guidelines using an open public process within the next six month period coinciding with the six month " finalization " period established for the IID/Coachella MOU. If the states are unable to agree within that time frame, I shall exercise my responsibility and issue surplus guidelines, giving due regard to the views expressed by the various basin states.

Next, I would like to report to you on the status of the proposed rule for off stream storage of Colorado River water and interstate transfers in the lower division states. As you know, the genesis of this rule was the enactment of an Arizona law providing for the possibility to store otherwise unused water in Arizona pursuant to interstate storage agreements, so that such water could subsequently be used to generate intentionally created unused Arizona apportionment that could be made available to entities in other states that had entered into interstate storage agreements. The Arizona law provided that it would become effective only upon the promulgation of a state-certified federal rule authorizing such transactions. I have viewed this plan as a highly desirable means to meet some of Nevada's incipient need for additional Colorado River water, and I instructed the Bureau to move forward with development of such a rule as promptly as possible.

A proposed rule was published in the Federal Register on December 31st of last year, and I anticipated issuing a final rule sometime toward the end of last Summer. As is the case with virtually everything relating to the Colorado River, certain elements of this proposed rule generated extensive commentary, and in order to assure that all views were adequately heard and considered, I re-opened the comment period until October 21st of this year. At the present time only one issue remains unresolved, a matter relating to the contracting requirements under the Boulder Canyon Project Act. We are continuing to work toward a resolution of that matter. I am hopeful that a mutually agreeable solution will be found, and that the final rule can soon be issued. In that regard, however, I want to emphasize the very great importance I attach to finding a means to meet Nevada's legitimate needs, and to make clear that if we cannot find a resolution of the problem surrounding the off stream storage rule, I shall be looking at other possibilities for meeting those needs.

I need to say a final word about a related topic: the Salton Sea. In October, Congress passed the Salton Sea Reclamation Act of 1998. For the most part, the Act codifies actions the Administration already has underway to address the environmental problems in the Salton Sea, including the initiation of a formal analysis of remedial alternatives under the National Environmental Policy Act. Section 101(b)(3) states: " In evaluating options, the Secretary shall apply assumptions regarding water inflows into the Salton Sea Basin that encourage water conservation, account for transfers of water out of the Salton Sea Basin, and are based on a maximum likely reduction in inflows into the Salton Sea Basin which could be 800,000 acre-feet per year. "

As I have emphasized today, we are working closely with California entities on many fronts to make ag-to-urban transfers a reality. But I will simply point out the obvious - that identifying a workable, realistic and affordable way to manage the Salton Sea will be a very complex task.

All in all, though we are not at the end of the road, we have come a long way, and we have done so on the basis of negotiation designed to achieve consensus. I continue to be committed to the idea that consensus is the best way to administer this river. But to find common ground requires a willingness to accommodate. I believe we can find such ground on each of the remaining issues that I have discussed, so that every state and every entitlement holder can win, but with no winner-take-all. I prefer to be the facilitator of success and not the river-master issuing dictates from afar. I hope that, in the remaining time on my watch, we can continue and accelerate our work in the spirit of friendship and cooperation that has already produced so much progress.