S. 1894

Statement of
Michael L. Connor, Deputy Secretary
U.S. Department of the Interior
before the
Committee on Energy and Natural Resources
United States Senate
on
S. 1894 – California Emergency Drought Relief Act of 2015
October 8, 2015

Chairman Murkowski, Ranking Member Cantwell and Members of the Committee, I am Mike Connor, Deputy Secretary of the Department of the Interior (Department).  Thank you for the opportunity to provide the views of the Department on S. 1894, the California Emergency Drought Relief Act of 2015.  I am pleased to have the opportunity to speak briefly about the Administration’s efforts to assist California and the West in addressing drought, and to provide input on the introduced language of S. 1894.

As stated during this Committee’s June 2, 2015, hearing on west-wide drought, the Administration is acutely aware of the drought-related challenges confronting families, farmers, tribes, businesses, cities, rural communities and the environment throughout the West, and we are committed to doing all we can to meet those challenges.  Unabating drought poses health and safety risks to certain communities and threatens the economic livelihood of many others.  Simply put, we understand the implications for western communities and the need to secure long-term water reliability and resiliency in the face of drought and the related impacts of climate change.  The Department is taking a multi-faceted approach and marshalling every resource at its disposal to assist western communities impacted by drought.  Those efforts were summarized in our testimony on June 2.  I want to highlight some of our most important efforts for the Committee, including:

•  The Department's WaterSMART Program is helping lead the way in drought response and preparedness.  Under WaterSMART, Reclamation and its local partners will achieve water conservation capability for agricultural, municipal, industrial, and environmental uses in the western United States by 975,000 acre-feet (since 2009) through September 30, 2016.  This Program's assistance to communities in stretching water supplies has already exceeded the prior goal of 840,000 acre-feet by the end of FY 2015 by partnering with states, Indian tribes, irrigation and water districts and other organizations with water or power delivery authority to implement programs resulting in water conservation.
   
• In 2013, the Administration announced a partnership between 7 Federal agencies, including the Department, to help communities better prepare for droughts and reduce the impact of drought events on families and businesses.  The National Drought Resilience Partnership (NDRP) coordinates Federal efforts broadly across the country and is working closely with state and local governments, agriculture and other partners to improve community preparedness and resilience to drought.
   
• Working with the State Water Resources Control Board, operational changes by Reclamation have conserved nearly 800,000 acre-feet as of the end of August, substantially more than the 300,000 acre-feet I reported as of late May.  While those and many other measures have not fully alleviated the drought’s impacts, we’ve proven that we have the capacity to improve overall water management building on the work of creative local partners.  If sustained, I believe we can build long-term drought resiliency, even accounting for what El Nino may or may not yield in this and future years.
   
• Since December 2013, state and Federal agencies that supply water, protect fish and wildlife, and regulate water quality, have worked tirelessly together to balance water supply, biological protections, and water quality during this drought.  Following the Governor’s emergency drought proclamation, on January 29, 2014, Reclamation and DWR sought and acquired temporary modifications to their water rights permits and licenses to respond to the drought conditions, resulting in the conservation of hundreds of thousands of acre feet of water in California that would otherwise not have been conserved.
   
• In June of this year, Reclamation announced investments in more than $24 million in grants for 50 water and energy efficiency projects in 12 western states, more than $23 million for seven water reclamation and reuse projects in California, and nearly $2 million for seven water reclamation and reuse feasibility studies in California and Texas.
   
• And also in June, the Department, the U.S. Department of Agriculture (USDA), and the State of California announced the California Headwaters Partnership.  The program will coordinate the diverse activities of government agencies, property owners, and non-profit groups to restore streams and meadows, improve habitat and thin overgrown forests, and protect the economic uses of the land, such as logging and grazing.  The California Headwaters contribute greatly to the state’s water supply with the Sierra-Cascade watersheds provide drinking water to 25 million people, almost two-thirds of the California population, and the majority of water for irrigated agriculture. 

Our efforts complement those of state and local leaders as well as other federal agencies.  For example, on May 18, 2015, USDA announced the availability of an additional $21 million through the Natural Resources Conservation Service Environmental Quality Incentives Program to assist farmers and ranchers in eight western states experiencing drought.  These additional funds were targeted to practices improving rangeland health and improving water use efficiency on cropland.  In addition, the Department of Labor has provided assistance to dislocated workers, including $18 million for temporary jobs for drought affected workers; 6-month temporary positions working on drought mitigation through public and nonprofit agencies; and grant eligibility for dislocated workers.

Turning to S. 1894, the Administration gratefully acknowledges the many months of effort and constructive dialog underlying the bill’s proposals for drought relief in California.  We appreciate the work of Senator Feinstein and her staff to allow the Department and personnel from the Bureau of Reclamation (Reclamation) and our colleagues from NOAA to review some of the language as the bill was drafted over the past year.  Each of the bill’s four titles and subtitles contain distinct and targeted provisions that touch on operational, environmental, planning and budget functions.  For this reason, my statement will articulate the Department’s position for each of the titles rather than the bill as a whole.  As a threshold matter, this is a complicated bill, with overlap and interplay between the Titles.  In addition to policy issues, there are a number of technical drafting issues to be addressed.  The Department will be available to work with the Committee on these issues.   

Title I of S. 1894 applies to operational decisions on the state and federal water projects in California for two years, or for as long as the Governor has declared a drought emergency.  While S. 1894 contains far fewer operational mandates than the House bill before the Committee today, HR 2898, Section 101 of S. 1894 directs that federal agencies “shall provide the maximum quantity of water supplies possible to…contractors, State Water Project contractors, and any other locality of municipality in the State by approving, consistent with applicable laws (including regulations), projects and operations to provide additional water supplies as quickly as possible”.  It is already Reclamation’s practice, working closely with other federal and state agencies, as well as stakeholders, to provide maximum contract quantities when hydrology and operational constraints allow.  But as stated in the Department’s testimony on comparable provisions in Section 302(a) of HR 2898, there are significant potential legal uncertainties associated with a “maximum quantity of water supplies practicable” standard written into law which could readily generate litigation for the state and federal governments.  Additionally, subparagraph 101(e) directs that federal agencies issue final decisions “not later than 10 days after the date on which a meeting is requested” by the state on projects or operations to provide additional water supplies.  While Reclamation conducts operations in real time and works expeditiously to capitalize on every opportunity to provide emergency water supplies, this time limitation may be difficult for an agency that is already managing pursuant to a drought emergency and may ultimately prove a detriment to sound decision-making.  

We are also concerned that there exists the potential for conflict between the mandate in 101(c) and the mandate in section 113(a) requiring no redirected adverse impacts.  Additionally, the Department has concerns with the reporting requirements in Section 123.  Collectively, the bill has over 20 reporting requirements which would have the effect of diverting resources away from the timely analysis and decision-making needed to effectively address drought conditions on a real-time basis.  Finally, we are also concerned with the language in section 101(a)(2) as it could be interpreted to limit the Secretary’s ongoing ability to manage water resources in the Klamath Basin.  This language needs to be clarified to ensure there is no limitation on the Secretary’s ability to meet all legal obligations, including protection of the tribal fishery.

The Department supports the discretionary approach to authorities found in Title II of S. 1894 and Section 203 of HR 2898 for the benefit of fish and wildlife.  Provisions intended to build upon the agencies’ current actions to improve data gathering, monitoring, and scientific methodologies can greatly benefit operations with respect to water supply and species protection.    In particular, the language at Section 202(a)(3)(B)(i) of S. 1894 and Section 203(d) of HR 2898, authorizing federal participation in a 100-percent locally funded pilot program to protect native anadromous fish in the Stanislaus River, Delta and other tributaries, if based upon well shaped research strategies and developed through a collaborative scientific and technically disciplined process (akin to our work in the Collaborative Adaptive Management Team), could help create a strengthened predation research program able to provide near- and long-term benefits for the environment and for state and federal water users across California. We welcome a discussion with Members, staff, and the water districts on how to shape the proposal to achieve our desired outcome.

Titles III and IV of S. 1894 contain many new authorizations with different funding mechanisms.  In general, the Department appreciates the bill’s recognition that federal water resource investments are important in effectively leveraging state, local, and private funds to build drought resiliency.  Nonetheless, we have concerns that a number of the authorizations are duplicative with other federal programs and could expand Reclamation’s responsibilities well beyond its limited budget. Nonetheless, there are numerous provisions that the Department can support.  First, the Department appreciates and fully supports the increase in WaterSMART funding authorization to $400 million (Sec. 421(b)(3)).  The water and energy efficiency grant program has been tremendously successful in stretching water supply in the West, and building drought resiliency.  In addition, section 431would alter Reclamation’s roles under the Water Desalination Act of 1996 and the Reclamation Wastewater and Groundwater Study and Facilities Act, commonly referred to as Title XVI.

Section 421(b) of the bill provides an additional appropriations ceiling under the Secure Water Act (Section 9504 of PL 111-11), enabling Interior to continue providing funding through the WaterSMART Program.  As we describe above, this additional funding authority was requested in Reclamation’s FY 2016 Budget Request, and the Department appreciates inclusion of this language in S. 1894. 

Section 431 amends current law to provide blanket construction funding authority for projects to reclaim and reuse wastewater or impaired surface water based on their being determined to be feasible.  While this language expands upon existing law, which provides that Reclamation can only fund design and construction of Title XVI projects when there is a specific Congressional authorization, it is timely to examine expanding program eligibility to any projects that are determined to be feasible and which compete well under Reclamation’s existing prioritization criteria, which are consistent with the program’s statutory origins in Public Law 102-575, as amended.  Over the past 20 years, projects developed and constructed under the Title XVI program are contributing nearly 350,000 acre-feet of water annually to address California’s water demands, particularly in Southern California.  This supply has helped address drought and other issues in the oversubscribed Colorado River basin.  Accordingly, water reuse has proven to be one tool in building regional resilience to drought.

It is not clear how Section 431 would relate to subsections 301(b) and (c) of S. 1894, which references 105 water reuse and 26 desalination project sponsors specifically enumerated for review and funding awards.  With the proposed changes in section 431, it does not appear that the authorizations in Section 301 are necessary, particularly, since there is no funding made available to carry-out these projects in the near-term.  In addition, given the Administration’s support for increasing the authorized ceiling for WaterSMART, and the fact that the program as currently authorized is already oversubscribed, there is not a need to create duplicate authorizations as contemplated in Section 322 and the new authorization within Section 421 (i.e. the amendment to 42 U.S. 10368(c)).  The Department does support reauthorization of the Desalination Act in subsections 302(a)-(d).

The Department also supports language in Title III, Subtitle B pertaining to federal and non-federal water storage, although technical changes are needed (e.g. Section 312(b) appears to authorize Reclamation to invest in storage projects outside its current 17-state service area).  As the Committee is aware, federal agency budgets, including Reclamation’s, are under increasing pressure due to expanding needs and the priority of deficit reduction.  Accordingly, Section 312 includes requirements that construction of storage projects “shall not commence until the Secretary secures an agreement providing such funds as are necessary to pay the capital costs for any purpose that would otherwise be considered to be reimbursable under the reclamation laws.”  This language is very timely, because the traditional Reclamation business model, in which feasibility studies, consistent with the 1983 Principles and Guidelines for Water and Related Resources Development, are first authorized, funded, and submitted to Congress, and then construction is authorized and funded, does not always address the needs of project sponsors at the state and local levels.  Moreover, given budget limitations and the availability of other available financing mechanisms, the historic federal role in financing water storage projects through the Bureau of Reclamation must be revisited with a greater emphasis on non-federal financing. 

The Department supports the above provisions in Title III, but recommends some changes.  Section 312(a)(2) authorizes federal participation in up to 50% of project costs.  While that 50% figure is a maximum, not a minimum contribution, the Department recommends that a 25% maximum federal share ceiling would better reflect the budget realities confronting federal agencies, and the appropriate balance of costs among project beneficiaries.  Additionally, Section 312(b)(2) requires that federal participation in non-federal storage projects be requested by the Governor of the State.   However, it may be appropriate to broaden, beyond the Governor of a State, which entities can request federal participation in non-federal storage, given that there are other entities involved in storage projects, such as those referenced at Section 312(a)(1).

The Department also has concerns about at Section 313(b), the provision in the “CALFED Storage Projects” Section that would set deadlines for the completion of ongoing water storage studies.  Of the five studies referenced in this Section, one is now complete and was submitted to Congress in July 2015 (Shasta Lake Water Resources Investigation); two are dependent upon participation and funding by non-federal cost share partners (North of Delta Offstream Storage/Sites Reservoir, and Los Vaqueros Reservoir); one is undergoing final review and verification of the scientific assumptions associated with its benefits to fish and wildlife (Upper San Joaquin/Temperance Flat); and the final study, referenced at Section 313(b)(5), San Luis Low Point Improvement Project (SLLPIP),  requires further analysis and resolution of recently identified safety concerns at B.F. Sisk Dam (B.F. Sisk impounds San Luis Reservoir).  Requiring completion of the studies on the proposed dates could compromise Reclamation’s ability to provide sufficient basis for a decision on construction and could prohibit adequate input from cost-share partners.

At the programmatic level, the Department supports language at Section 314 authorizing the combination of dam safety construction work with construction for other project benefits.  This language closely corresponds with four other legislative vehicles pending this Congress: Title X of HR 2898 (Valadao); Section 205 of the Senate version of the 2016 Energy and Water Development Appropriations bill (HR 2028) reported on May 21, 2015; S. 1657 (Barrasso); and HR 2749 (Valadao), currently pending before the House.  As stated in testimony this past June on HR 2749, the Department believes that any use of this new authority should ensure that the beneficiaries of the non-safety-related project construction pay their full share of the costs as a condition of construction; i.e., that there be no repayment contract for that portion of the project.  The Department would be glad to work with the Committee to propose alternative language.  It would also be important to assure, if S. 1894 or HR 2749 were to be enacted and those provisions utilized, that adequate appropriations authorization (i.e. "ceiling") specific to the additional benefits was available for the particular project where the new authority would be applied.  Reclamation would need to certify this authority on a case-by-case basis in order to apply this new authority consistent with Congressional intent. 

The Department supports language in Section 325 to authorize federal agencies to assist efforts of the State Water Resources Control Board to help manage the state’s water supplies during the drought emergency, so long as this provision is limited to illegal water diversions.

The Department supports Section 328 of the legislation, which formally establishes the Open Water Data Initiative.  The Open Water Data Initiative (OWDI) is the process of taking federal water data sets and making them publicly interoperable or machine readable, to allow for use with other data sets.  When implemented, OWDI will allow for the use of select federal water data sets with other data sets from other federal agencies, states, and localities. 

An application of the OWDI process is data visualization, like the December 2014 California Drought visualization http://cida.usgs.gov/ca_drought/. The California visualization utilizes existing, open data sets (federal/local/state) and provides a visual platform in telling the story of the drought in California. 

We are especially excited about the progress on the Colorado River Drought Visualization, which we anticipate to release by the end of this year. Visualizations are a great application of the OWDI process, providing a mechanism for communicating current water resource challenges to our key stakeholders and the general public through data-driven insights.  The visualizations also show the possibility of progress through the OWDI process.

Title IV Subtitle A contains a “Reclamation Infrastructure Finance and Innovation Act” (RIFIA).  Overall, the Department supports the development of new financing options that reduce pressure on agencies’ appropriated budgets, and the Administration is exploring alternatives for infrastructure financing, including public-private partnerships and a National Infrastructure bank. The intent of this strategy is to facilitate the best use of federal and non-federal dollars to reduce risk and improve the reliability of the Nation’s infrastructure.  The Administration is still reviewing the RIFIA proposal and does not have a position at this time. 

Finally, Sections 441-444 of the bill would provide $3.75 billion of mandatory funding for water resources investments in the 2026 to 2050 timeframe.  The Administration believes that any major commitment of Federal funds such as this should be carefully considered and recognize the existing framework of budgetary and fiscal constraints.  Originating these funds in 2026 circumvents existing PAYGO rules and undermines the fiscal constraints that those rules were intended to protect.  The Department does appreciate the recognition that significant new investments are needed to meet the challenges associated water resources in an era of increasing demand and a changing climate, both of which are exacerbating the impacts of drought.  Nonetheless, it is important that local communities, working with their state governments take the primary lead in developing and paying for these projects.  The Federal government should continue to support these efforts through existing programs that facilitate studies, planning, technology development, and an appropriate cost-share for projects that provide for public benefits.  In addition, within Reclamation, there is already a substantial backlog of projects and actions for which Reclamation has legal obligations.  Any new funding proposals should account for those obligations, and should not further impact Reclamation’s existing backlog. 

In closing, I would once again like to echo the Department’s statement to this Committee on June 2 of this year, when we expressed the Department and Administration’s deep concern about continuing drought and the toll it is taking on communities urban and rural communities, businesses large and small, farmers and fishermen, and hardworking families.   We continue to do all we can to address this situation.  As noted previously, Reclamation and California's Department of Water Resources (DWR) are operating through a Real Time Drought Operations Management Team (RTDOMT) comprised of representatives from Reclamation, DWR, State and federal fish and wildlife agencies, and the SWRCB to discuss more flexible operations of the Projects while protecting beneficial uses. Together, these agencies worked through existing statutory and regulatory obligations so that water operations could adjust quickly to changes in the weather and environment to support and improve water supply deliveries when possible while protecting water quality and fish and wildlife as required under state and federal laws and permits. The RTDOMT agencies recognize the importance of their efforts to minimize potential impacts from drought to provide food security, economic stability, and species protection in California.

Toward this end, we are open to further refinements to S. 1894.  We understand the implications for western communities and the need to secure long-term water reliability and resiliency in the face of drought and the related impacts of climate change. 

As noted in the Department’s statement on HR 2898 which is also before the Committee today, the debate surrounding these drought bills has brought abundant speculation that legislation dictating how to operate the water export facilities, or even that relying on a strong El Nino, will decisively end California’s drought.  For the reasons I’ve described more specifically in our statement on HR 2898, we strongly disagree with the idea that new legislation will salvage more water than the operators on the ground are wringing from the system every day.  And as for El Nino, the odds of a one-year event ending to a multiple-year drought are also slim.  In the areas most critical to California’s water supply (the Shasta-Trinity mountains, Sierra Nevadas and Colorado River basin), El Nino does not always result in large amounts of snow and rain.  Even if it results in large amounts of precipitation in those key areas, it’s highly unlikely to make up for the impacts of the current drought, which have left California’s water supplies at historically low levels.  By several metrics (e.g. snowpack, soil moisture, and even groundwater depth in some areas), this may be the worst drought in at least 500 years.   

Simply put, there is no standalone solution to long-term water shortages significantly impacted by drought and the additive factor of climate change.  Nonetheless, over the past few years, aggressive drought response measures at the federal, state, and local levels have helped to mitigate the impacts of drought.  By sustaining these activities, I believe we can build long-term drought resiliency, even accounting for what El Nino may or may not yield in this and future years.

Looking ahead, it’s imperative that the Federal government, states, tribes and local communities think beyond the scope and scale of the current drought, and plan for the needs of the future in a changing climate.  According to the best available science, a warmer, drier climate this century will pose significant new challenges to communities across the West. 

The Administration looks forward to working with Congress and communities across the West to: foster the development of new technologies to expand supply, reuse water and expand efficiency efforts; leverage water pricing systems and incentives to conserve water; ensure communities and decision makers have the data they need to manage water resources in a changing climate; encourage efficient water use across the agriculture sector; and utilize markets and water trading mechanisms to maximize scarce water resources. 

We stand ready to work with this Committee and Senators Feinstein and Boxer to find common ground on legislation that can complement the Administration’s efforts to assist communities impacted by drought. 

This concludes my written statement.  I am pleased to answer questions at the appropriate time.