**Chapter 1**

**Purpose and Need**

**1.1    Introduction**

In accordance with Section 3404(c) of the Central Valley Project Improvement Act (CVPIA), the Bureau of Reclamation (Reclamation) proposes to execute up to 59 interim water service contracts for a period of up to two years, from March 1, 2004 through February 28, 2006.  Interim renewal contracts (IRCs) are undertaken under the authority of the CVPIA to provide a bridge between the expiration of existing long-term water contracts and the execution of new long-term water contracts.  These interim contracts will be renewed for a  two-year period from March 1, 2004 through February 28, 2006.  However, in the event that a new long-term water contract is executed with an effective date of March 1, 2005, that interim water service contract would then expire on February 28, 2005.  Interim renewal of these water service contracts is necessary to continue delivery of Central Valley Project (CVP) water until the long-term contracts are executed.  Water service contracts proposed for interim renewal in 2004 are listed in Table 1.  

Reclamation has prepared this supplemental Environmental Assessment (EA) to determine if any actions occurring from an extended interim period of up to two years from March 1, 2004 until February 28, 2006 will result in any potential impacts not analyzed in the 1994 EA (Bureau of Reclamation 1994a and 1994b), the 1998 Supplemental EA (Bureau of Reclamation 1998), the 2000 Supplemental EA (Bureau of Reclamation 2000), the 2001 Supplemental EA (Bureau of Reclamation 2001), or the 2002 Supplemental EA (Bureau of Reclamation 2002).  These six previous documents are incorporated by reference into this analysis.  The 2002, 2001, and 2000 IRC Supplemental EAs are included in Appendix C.  The December 1994 EA, and February 1998 Supplemental EA are incorporated by reference and available by request.  

This 2004 Supplemental EA provides the sections that have updated information, additional discussions, or table changes from the 2002, 2001 or 2000 Final Supplemental EAs.  In addition to the 42 CVP interim renewal contracts analyzed in the previous Supplemental EAs, this 2004 Supplemental EA includes 17 additional CVP contractors that also require IRCs at this time.  These 17 contractors have long-term water service contracts that expired or will expire within the next year, and therefore these contractors will also require an interim renewal contract until new long-term contracts can be executed in 2005 or 2006.  These 17 interim renewal contracts are identified in Table 1 of this document. 

This environmental analysis was developed consistent with regulations and guidance from the Council on Environmental Quality, and in conformance with the analysis provided in *NRDC* v. *Patterson*, Civ. No. S-88-1658 (Patterson).  In Patterson the Court found that “([on] going projects and activities require NEPA [National Environmental Policy Act] procedures only when they undergo changes amounting in themselves to further ‘major action’.”  In addition, the court went further to state that the NEPA statutory requirement applies only to those changes.  The analysis in this draft supplemental EA and the incorporated EAs finds in large part that the interim renewal of the contracts is in essence a continuation of the “status quo,” that is, they continue the existing use and allocation of resources (i.e., the same amount of water is being provided to the same lands for existing/ongoing purposes).

**1.2   Background of Interim Contracts**

Section 3409 of the CVPIA stipulates that Reclamation must prepare a programmatic environmental impact statement (PEIS) before renewing long-term CVP water service contracts. The complexity of the analysis associated with the CVPIA PEIS extended its completion until October 1999 with a Record of Decision approved on January 9, 2001. 

The PEIS evaluated CVP-wide impacts of long-term contract renewal.  Regional LTCR environmental-compliance documents tiered from the PEIS are at various stages of completion.  NEPA documentation was completed in early 2001 for the Friant Division, and the Cross Valley Canal (CVC) Unit, Hidden Unit, and Buchanan Unit LTCRs.  Twenty-five of the 28 Friant Division long-term contracts were executed in January of 2001.  The Hidden Unit long-term contract and the Buchanan Unit long-term contract were approved in February 2001.  The CVC Unit’s contract negotiations are essentially complete.  Final execution of CVC Unit long-term contracts is pending.  

Reclamation is completing the contract negotiations and site-specific environmental documentation for long-term contracts with contractors in the American River Division, the Corning and Tehama-Colusa Canal Units (Sacramento River Division), the Sacramento River Water Rights Settlement Contractors (Sacramento Division), the Feather River Division, the Contra Costa Unit (Delta Division), the Mercy Springs Water District (Delta Division), the US. Department of Veteran Affairs (Delta Division), the City of Fresno (Friant Division), the San Felipe Division, the San Luis Unit (West San Joaquin Division),the Delta Mendota Canal Unit (West San Joaquin Division), the  Shasta-Trinity River Divisions, and the Cross Valley Canal Unit. Reclamation is aggressively pursuing completion of environmental compliance and execution of remaining long-term water service contracts within this interim period.  

**1.3Purpose and Need for Action**

The purpose of the proposed action is to execute interim contracts for up to two years between March 1, 2004 through February 28, 2006.  Execution of interim contracts is needed to continue delivery of CVP water to interim contractors until the long-term contracts can be executed.

**1.4Issues Related to CVP Water Use under the Proposed Interim Contracts**

**1.4.1Interim Water Contract Service Areas**

No changes to any water service area are part of the proposed action. Appropriate environmental compliance and documentation will be completed for any request from interim contractors for Reclamation approval of service area boundary changes.

**1.4.2Water Transfers**

No water transfers are part of the proposed action.  Any water transfers would be separate independent actions.  Pursuant to Section 3405 of the CVPIA, appropriate environmental compliance and documentation will be completed for any request from an interim contractor for Reclamation approval of a water transfer.  

**1.4.3Water Assignments**

Potential future assignments of CVP water are not included in the proposed action.  Any changes in CVP water assignments would be separate independent actions and would require their own environmental compliance and documentation. 

**1.4.4Other Issues**

The following actions are also not included in the Proposed Action:

· Warren Act contracts for conveyance of non-federal water using federal facilities;

· The Mendota Pool Pumpers Exchange Agreement and other non-Central Valley Project Waters that are pumped into the Mendota Pool;

· Inclusions and exclusions to Interim Renewal Contract service area boundaries. 

· Future changes in use from agricultural irrigation only to Ag/M&I involving these interim renewal contractors. 

· Changes to the existing Operations Criteria and Plan (OCAP).

**1.5Public Involvement**

The public will be invited to review and comment on this draft 2004 Supplemental EA for a 30-day review period beginning in December 2003.  A press release announcing the EA/FONSI publication will be sent to all interested parties, announced on the Mid-Pacific Region web page, and announced at meetings conducted by Reclamation for proposed renewal of the long-term water service contracts.  

Public participation requirements for water service, repayment, and other water-related contracts are established in Section 9(f) of the Reclamation Project Act of 1939, 43 U.S.C. 485h, and by RRA rules and regulation (43 CFR 426.22).  Public participation procedures are composed of two basic elements: 1) publicize proposed contract actions, and 2) provide an opportunity for public comment.  Reclamation provides public notices of proposed contract actions at least 60 days prior to execution of any contract with a term greater than 1 year.  Negotiations have been completed for the draft form of the 2004 contracts, and a press release announcing their availability was sent to all interested parties on December 12, 2003.  The draft forms of the contract are available for a 60-day public review and comment period and can be viewed on-line at www.usbr.gov/mp/cvpia/3404c/2004InterimCts/index.html.  

**Table 1. Central Valley Project****2004 Interim Renewal Contractors, IRC contract quantities, the existing contract number, and the existing contract expiration date.**

**Chapter 2**

**Alternatives**

**2.1Proposed Action Alternative**

The Proposed Action alternative evaluated in this document is the execution of up to 59 interim renewal water-service contracts between the United States and the CVP contractors listed in Table 1. Forty-two of the CVP contractors listed on Table 1 entered into interim renewal contracts on February 28, 2002.  The Proposed Action would continue these existing interim contracts, with only minor, administrative changes to the contract provisions.  Seventeen CVP contractors on Table 1 have long-term water-service contracts expiring now or within the next year, and will also require an interim contract in 2004 to allow continued delivery of CVP water until long-term water-service contracts can be executed.  The Proposed Action would continue their existing water service contracts, with only minor, administrative changes to the contract provisions.  

A sample Existing Interim Contracts are provided in Appendix B [The Existing Interim Contract used for six contractors in the Delta-Mendota Canal Unit (Coelho Family Trust, Fresno Slough WD, James ID, RD 1606, Tranquillity ID, and Tranquillity PUD) is slightly different, and is presented in Appendix B(2)].  The terms and conditions of the Existing Interim Renewal Contract are incorporated by reference into the Proposed Action contract except for these revisions:

(a)  The first sentence in Subdivision (a) of Article 1 is modified as follows: “This renewal contract shall be effective from March 1, 2004, and shall remain in effect through February 28, 2006, and thereafter will be renewed as described in Subdivision (a) of Article 2 of the Interim Renewal Contact if a long-term renewal contract has not been executed with an effective commencement date of March 1, 2006; Provided, that if a long-term renewal contract has been executed with an effective commencement date of March 1, 2005, this interim renewal contract shall expire on February 28, 2005”. 

(b)Subdivision (b)(1) of Article 2 of the Existing Interim Renewal Contract is amended by deleting the date “November 30, 2001," and replacing same with the date “February 15,  2006.” 

(c) Subdivision (b) of Article 1 of the Existing Interim Renewal Contract is amended by deleting the dates “February 1, 2004," “February 15, 2004," and “February 28, 2006," and replacing same with the dates “February 1, 2006," “February 15,  2006," and “February 28,  2006," respectively. 

These revisions would take effect on the date of the execution of the 2004 interim contract. Except for date changes, the 2004 interim contracts will remain the same as the existing interim contract.  

The Proposed Action alternative is comparable to Alternative 1, continuation of existing interim contracts, analyzed in the 2000 Supplemental EA.  The period of renewal for each 2004 contract would be for two years, as permitted under subsection 3404(c)(1) of CVPIA. Subsection 3404(c)(1) specifies that interim renewal contracts will not exceed three years in length, and be for successive interim periods of not more than two years in length. The current contract provisions are those that are included in the existing interim renewal contracts and specified in the 2002 Supplemental EA.  They contain only minor variations from the provisions described in the 1994 EA, the 1998 Supplemental EA, and the 2000, and 2001 Supplemental EAs.  

All other existing contract provisions such as contract supply, payment, water quality, water measurement, water conservation, water shortage, discretionary provisions of the Reclamation Reform Act, Endangered Species Act compliance, and standard articles are not changed (see Section 2.1.1 of the 2000 Supplemental EA, presented in Appendix C).  

**2.2 Alternatives Considered But Eliminated From Further Analysis**

**2.2.1 No Renewal of Interim Contracts**

Nonrenewal of existing contracts is considered infeasible based on Section 3404(c) of the CVPIA.  Section 3404(c) states “...the Secretary **shall**, upon request, renew any existing long-term repayment of water service contract for the delivery of water from the CVP....” The non-renewal alternative was considered, but eliminated from analysis in this EA because Reclamation has no discretion not to renew existing water service contracts.  

**2.2.2Reduction In Interim Contract Amounts**

Reduction in contract water amounts due to the current delivery constraints on the CVP system (identified in the PEIS) was considered in certain cases, but rejected from analysis for several reasons:  

First, the Reclamation Project Act of 1956 and the Reclamation Project Act of 1963 mandate renewal of existing contract amounts when beneficially used.  Water-needs analyses have been completed for all CVP contracts to identify the amount of water that could be beneficially used by each water service contractor.  In almost all cases, the needs exceed or equal the current total contract amount.  The contract amounts are constrained not to exceed the beneficial use or the existing contract amount, whichever is less. 

Second, the shortage provision of the water service contract protects Reclamation’s Contracting Officer from liability from the shortages in water allocations that exist due to drought, other physical constraints, and actions taken to meet legal or regulatory requirements.  Such legal or regulatory actions include, for example, actions to implement the CVPIA, which has dedicated significant amounts of CVP water to environmental uses and which provides funding from the CVP contractors to improve habitat and to acquire water for environmental purposes.  The CVPIA required the CVP to institute environmental management as part of the CVP operations, such as allocation of 800,000 acre-feet for fish and wildlife purposes, refuge water supply, and acquisition of water from willing sellers.  These legal requirements, in addition to existing Federal and State requirements of CVP operations provide regulatory/environmental use of CVP water and constrain the actual water delivery amounts.  

Third, retaining the full historic water quantities under contract provides the contractors with assurance the water will be made available in wetter years and helps to support investments for local storage, water conservation improvements and capital repairs.

**2.2.3Other Alternatives**

Other alternatives, including tiered pricing, are being developed through the negotiations process for long-term contracts.  Appropriate alternative will be evaluated as part of the environmental compliance process for long-term contract renewals.  Reclamation is aggressively pursuing completion of long-term contract renewal.  Reclamation anticipates completing the environmental compliance and the execution of long-term water service contracts within this interim period (2004 to 2006).  

**Chapter 3**

**Affected Environment and Environmental Consequences**

The Affected Environment and Environmental Consequences in this 2004 Supplemental EA presents only those sections that have updated information, additional discussions, or table changes from the 2002, 2001 and 2000 Final Supplemental EAs.  The Proposed Action alternative is comparable to Alternative 1, continuation of existing interim contracts, analyzed in the 2000 Supplemental EA. 

As described in Chapters 1 and 2, this 2004 Supplemental EA includes 17 interim renewal contracts that were not included in the previous IRC environmental assessments.  The contract water amount for each of these 17 interim renewal contractors is shown on Table 1.  These 17 contractors are located inside the same geographical area analyzed in the original IRC Environmental Assessment (Reclamation 1994) and in the subsequent Supplemental IRC Environmental Assessments (Reclamation 1998, 2000, 2001, 2002).  Location maps for the 17 water service contractors are presented in Appendix D.  

The existing affected environment conditions are essentially the same as those described in the initial 1994 EA and subsequent Supplemental EAs. Consistent with existing CVP and CVPIA biological opinions, Reclamation implemented a Central Valley Habitat Monitoring Program (CVHMP) in 1999 to map and monitor habitat inside CVP water service areas.  The CVHMP uses satellite imagery and aerial photography to identify natural habitats and monitor habitat changes that may be occurring inside CVP water service areas.  The CVHMP database benchmark year is 1993, and that 1993 data reflects land-use and habitat conditions described in the affected environment sections of the 1994 EA (Reclamation 1994).  Comparisons of the 1993 benchmark-year to the most recent available satellite imagery (2000) show that habitat conditions inside the IRC water service areas have changed very little since the first IRC environmental analysis in 1994, which further supports conclusions presented in the 2002, 2001, and 2000 Supplemental IRC Environmental Assessments.   Summaries of land-use and habitat changes inside each IRC service area since 1993 are presented in Appendix E.  

**3.3Biological Resources**

**3.3.1**[**Proposed Action**] **Alternative**

The fifth paragraph from the 2001 Supplemental IRC Environmental Assessment is revised as follows:

CVP-wide impacts to biological resources have been evaluated in the PEIS, and a FWS Biological Opinion to address potential CVP-wide impacts was completed on November 21, 2000.   Cross Valley Canal (CVC) Unit Contractors’ potential impacts to biological resources have been evaluated in the CVC Unit Contractors Long-Term Contract Renewal Environmental Assessment (January 2001), the CVC Unit Contractors Long-Term Contract Renewal Regional Biological Assessment (January 17, 2001), the Biological Opinion on U.S. Bureau of Reclamation Long Term Contract Renewal of Friant Division and CVC Unit Contracts (FWS-January 19, 2001), and the Biological Opinion for the Long-Term Renewal of CVP Water Service Contracts for the Friant Division and CVC Unit Contractors (NOAA Fisheries -January 20, 2001).  The programmatic biological opinion and Essential Fish Habitat Conservation Recommendations  prepared by NOAA Fisheries  for the CVPIA was completed on November 14, 2000.

The following paragraph is included at the end of this section:

The  FWS Biological Opinion for 2002 interim contracts is incorporated by reference in this 2004 Supplemental EA and  presents the commitments that Reclamation will undertake during the proposed 2004 interim renewal period.  

**Chapter 4**

**Consultation and Coordination**

Reclamation has consulted and coordinated with the US Fish and Wildlife Service, National Oceanic and Atmospheric Administration – Fisheries, and the IRC contractors (Table 1) in the preparation of this draft environmental documents for this proposed action.  The public will be invited to review and comment on this draft 2004 Supplemental EA for a 30-day review period beginning in late December 2003.  A press release announcing the EA/FONSI publication will be sent to all interested parties, announced on the Mid-Pacific Region web page. 

**4.1Endangered Species Act**

In February 2002, Reclamation has completed section 7 consultations with NOAA Fisheries and the Fish and Wildlife Service (FWS) pursuant to the Endangered Species Act (ESA).   These consultations cover the interim contract renewals (IRC) from March 1, 2002 through February 29, 2004.

In 2000, Reclamation completed formal ESA consultation on IRCs, and the FWS issued a biological opinion dated February 29, 2000.  On February 28, 2001, the FWS issued a memorandum extending the 2000 biological opinion through February of 2002.  In February 2002, the FWS issued a biological opinion amending the February 2000 biological opinion, which extended the 2000 biological opinion through February of 2004.

Reclamation consulted formally on the CVC Unit long-term water service contracts and received a biological opinion on January 19, 2001.  For the CVC Unit Contractors in the interim contract period, Reclamation and the CVC Unit Contractors have committed to comply with the requirements of the long-term contract biological opinion.

In 2002, Reclamation completed ESA consultation on interim contracts with NOAA Fisheries for a period of up to two years.  NOAA Fisheries, by letter dated February 22, 2002, concurred with Reclamation’s determination that the renewal of 2-year interim water service contracts will not likely adversely affect Sacramento River winter-run chinook salmon, Central Valley spring-run chinook salmon, Southern Oregon/Northern California Coast coho salmon, Central Valley steelhead, or their designated critical habitat.  Formal consultation on the CVC Unit’s long-term water service contracts was completed in January 2001.  Reclamation and the CVC Unit Contractors have committed to comply with the NOAA Fisheries long-term contract BO as part of the approval of these interim contracts.  

Reclamation formally re-initiated ESA consultation with FWS on November 5, 2003 and with NOAA Fisheries on November 14, 2003 regarding the proposed action.  These ESA consultations on the proposed 2004 interim renewal contracts will be completed before Reclamation exercises a FONSI document on the proposed action.  

**Chapter 5**

**References**

Bureau Of Reclamation.  1994.  Interim Renewal Contracts Final Environmental Assessment.  Mid-Pacific Regional Office. September 1994. 

______.  1998.   Finding Of No Significant Impact And Supplemental Environmental Assessment for the Renewal of 54 Interim Water Service Contracts through February 29, 2000.  Mid-Pacific Regional Office. February 1998.  

______.  2000.    Final Supplemental Environmental Assessment for the Renewal of 54 Interim Water Service Contracts through February 28, 2001, Central Valley Project, California.  Mid-Pacific Regional Office. Mid-Pacific Regional Office.  February 2000.

______.  2001.  Supplemental Environmental Assessment for the 2001 Renewal of Interim Water Service Contracts Through February 29, 2002, Central Valley Project, Mid-Pacific Regional Office. Mid-Pacific Regional Office. California. February 2001. 

______.  2002.  Supplemental Environmental Assessment for the 2002 Renewal of Interim Water Service Contracts Through February 29, 2004, Central Valley Project, Mid-Pacific Regional Office. Mid-Pacific Regional Office. California. February 2002. 

**DraFT**

**Supplemental Environmental Assessment for the 2004 Renewal of Interim Water Service Contracts through February 28, 2006**

**Central Valley Project, California**

***December 2003***

December 2003       Draft Supplemental EA for the 2004 Renewal of Interim Water Service Contracts            Page 11