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[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

               CALIFORNIA WATER: A REGIONAL PERSPECTIVE

=======================================================================

                           OVERSIGHT HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             April 3, 2001

                               __________

                           Serial No. 107-14

                               __________

           Printed for the use of the Committee on Resources

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
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                         COMMITTEE ON RESOURCES

                    JAMES V. HANSEN, Utah, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,                   George Miller, California
  Vice Chairman                       Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana     Dale E. Kildee, Michigan
Jim Saxton, New Jersey               Peter A. DeFazio, Oregon
Elton Gallegly, California           Eni F.H. Faleomavaega, American 
John J. Duncan, Jr., Tennessee           Samoa
Joel Hefley, Colorado                Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland         Solomon P. Ortiz, Texas
Ken Calvert, California              Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado              Calvin M. Dooley, California
Richard W. Pombo, California         Robert A. Underwood, Guam
Barbara Cubin, Wyoming               Adam Smith, Washington
George Radanovich, California        Donna M. Christensen, Virgin 
Walter B. Jones, Jr., North              Islands
    Carolina                         Ron Kind, Wisconsin
Mac Thornberry, Texas                Jay Inslee, Washington
Chris Cannon, Utah                   Grace F. Napolitano, California
John E. Peterson, Pennsylvania       Tom Udall, New Mexico
Bob Schaffer, Colorado               Mark Udall, Colorado
Jim Gibbons, Nevada                  Rush D. Holt, New Jersey
Mark E. Souder, Indiana              James P. McGovern, Massachusetts
Greg Walden, Oregon                  Anibal Acevedo-Vila, Puerto Rico
Michael K. Simpson, Idaho            Hilda L. Solis, California
Thomas G. Tancredo, Colorado         Brad Carson, Oklahoma
J.D. Hayworth, Arizona               Betty McCollum, Minnesota
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana

                   Allen D. Freemyer, Chief of Staff
                      Lisa Pittman, Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
                  Jeff Petrich, Democrat Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                   KEN CALVERT, California, Chairman
            ADAM SMITH, Washington, Ranking Democrat Member

 Richard W. Pombo, California        George Miller, California
George Radanovich, California,       Peter A. DeFazio, Oregon
  Vice Chairman                      Calvin M. Dooley, California
Greg Walden, Oregon                  Grace F. Napolitano, California
Michael K. Simpson, Idaho            James P. McGovern, Massachusetts
J.D. Hayworth, Arizona               Hilda L. Solis, California
C.L. ``Butch'' Otter, Idaho          Brad Carson, Oklahoma
Tom Osborne, Nebraska
Jeff Flake, Arizona

                                 ------                                

                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on April 3, 2001....................................     1

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     2
    Dooley, Hon. Calvin M., a Representative in Congress from the 
      State of California........................................     2
    Ose, Hon. Doug, a Representative in Congress from the State 
      of California..............................................     2
        Statement submitted for the record.......................     3

Statement of Witnesses:
    Broddrick, Ryan, Director of Conservation Programs, Ducks 
      Unlimited..................................................    36
        Prepared statement of....................................    38
    Cook, Wayne, Executive Director, Upper Colorado River 
      Commission.................................................     4
        Prepared statement of....................................     6
    Hall, Stephen K., Executive Director, Association of 
      California Water Agencies..................................     8
        Prepared statement of....................................     9
    McPeak, Sunne Wright, President/CEO, Bay Area Council........    34
        Prepared statement of....................................    35
    Woolf, Stuart, President and CEO, Woolf Enterprises..........    41
        Prepared statement of....................................    42

Additional materials supplied:
    Meacher, Hon. Robert, Regional Council of Rural Counties, 
      Statement submitted for the record.........................    53

 
                           CALIFORNIA WATER:
                         A REGIONAL PERSPECTIVE

                              ----------                              

                         Tuesday, April 3, 2001

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
Room 1324, Longworth House Office Building, Hon. Ken Calvert 
[Chairman of the Subcommittee] presiding.

  STATEMENT OF THE HONORABLE KEN CALVERT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Calvert. The oversight hearing of the Subcommittee on 
Water and Power will come to order. The Subcommittee is meeting 
today to hear testimony on California Water--A Regional 
Perspective.
    Under Committee Rule 4(g), the Chairman and the Ranking 
Minority Member can make opening statements. If any Members 
have statements, they can be included in the hearing record 
under unanimous consent.
    California has come to another crossroads in water resource 
management. For years, water policy was made in isolation in 
many different agencies and on many different levels. Often, 
our direction changed in a knee-jerk reaction to events, 
leaving us with conflicting priorities and contradictory goals. 
Lack of coordination in the past has produced an unwieldy 
system that makes water resource management difficult, at best.
    However, after years of fighting and fractured policy, 
competing water interests recognize the importance of a 
collaborative approach to water resource issues while taking 
into account the importance of State water rights. Cities, 
agriculture, industry, and the environment are all connected in 
their need for water. There are no ``silver bullets'' to 
California's water problems.
    California is the sixth largest economy in the world and 
the Nation's leading producer in both industry and agriculture. 
Resource shortages in an economy this large will have a ripple 
effect throughout the West, throughout this country.
    Our Subcommittee has the opportunity to facilitate a 
dialogue on the role water management plays in California and 
its effects on the Western United States as a whole. As we saw 
in last week's hearing, water users not only in California but 
throughout the West need operational flexibility, options for 
additional water storage, conservation, and reuse.
    I would like to thank our witnesses for coming out here 
today and look forward to hearing from them.
    [The prepared statement of Mr. Calvert follows:]

Statement of The Honorable Ken Calvert, Chairman, Subcommittee on Water 
                               and Power

    California has come to another crossroads in water resource 
management. For years, water policy was made in isolation in many 
different agencies and on many different levels. Often, our direction 
changed in a knee-jerk reaction to events, leaving us with conflicting 
priorities and contradictory goals. Lack of coordination in the past 
has produced an unwieldy system that makes water resource management 
difficult at best.
    However, after years of fighting and fractured policy, competing 
water interests recognize the importance of a collaborative approach to 
water resource issues while taking into account the importance of State 
water rights. Cities, agriculture, industry, and the environment are 
all connected in their need for water. There are no ``silver bullets'' 
to California's water problems.
    California is the sixth largest economy in the world, and the 
Nation's leading producer in both industry and agriculture. Resource 
shortages in an economy this large will have a ripple effect throughout 
the west.
    Our Subcommittee has the opportunity to facilitate a dialogue on 
the role water management plays in California and its affects on the 
Western United States as a whole. As we saw in last week's hearing, 
water users not only in California but throughout the West need 
operational flexibility, options for additional water storage, 
conservation and reuse. I would like to thank our witnesses for coming 
out here today, and look forward to hearing from them.
                                 ______
                                 
    Mr. Calvert. With that, I am going to recognize the Ranking 
Member with us today, Mr. Cal Dooley from California.

 STATEMENT OF THE HONORABLE CALVIN M. DOOLEY, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Dooley. Thank you, Mr. Calvert, and I thank all the 
witnesses for attending. I know we will get a lot of 
information. I want to thank the Chairman, too, for his 
commitment to move forward in trying to find a way that we can 
put forward a comprehensive CALFED reauthorization that will 
certainly help to meet the needs of all the water users in 
California. That includes environmentalists and municipal and 
agricultural users. Thank you.
    Mr. Calvert. I thank the gentleman.
    Mr. Ose is joining us here on the dais, and if there is no 
objection, we will have him join us through this hearing. So 
hearing none, so done.
    Any additional statements? Mr. Ose, do you have any brief 
remarks?
    Mr. Ose. Mr. Chairman, I did, if I may.
    Mr. Calvert. Certainly. Go ahead.

   STATEMENT OF THE HONORABLE DOUG OSE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Ose. First of all, I want to thank the Chairman and the 
members of the Subcommittee for allowing me to join you. I am 
appreciative of the witnesses taking the time to come to 
Washington and testify today.
    The Sacramento River in Northern California runs through 
the heart of my district. This great river provides water 
throughout Northern California. It is the primary source for 
both the Federal CVP, Central Valley Project, and the 
California State Water Project, which provide water for three 
of the four of us up here and millions of other Californians.
    Certain water suppliers in my district this year, after 
five consecutive wet years, are scheduled to only receive 60 
percent of their contract amount. These water supplies have 
been curtailed by the Federal Government despite the express 
promises made to my constituents that they would be able to 
fully utilize local water resources in the Sacramento Valley 
before water would leave the region. We continue to use our 
water more efficiently, but still find the supply too limited.
    In many ways, the solution is quite simple. We must create 
a larger supply to meet increasing demands. With California's 
population increasing by nearly 600,000 people per year and an 
agricultural economy that leads the world, with all due respect 
to Nebraska, if we continue at the State and Federal level with 
the current approach to our water challenges, we will be in the 
same disaster we are currently experiencing with energy.
    It is time to take necessary steps to improve our water 
supplies throughout California. Congress must make a major 
commitment to authorize the new infrastructure that will be 
necessary to meet California's water supplies for the next 30 
years, including new water storage facilities and fish screens 
to assure reliable agricultural and municipal supplies and to 
protect our fish and flora and fauna. There must also be a 
major commitment that requires Federal and State agencies to 
partner with local interests to develop and manage their water 
supplies at the local level.
    In light of the above, I am pleased to be here to listen to 
the testimony today as it relates to perhaps a potential House 
bill. I am willing to meet Senator Feinstein halfway on the 
proposed CALFED legislation that she has put forward. It is 
imperative that specific, binding language be included in these 
bills authorizing the construction of above-ground water 
storage facilities, one at Sites, which is north of the delta, 
and at least another one south of the delta.
    We are on the verge of a major opportunity to advance these 
water supply goals in a way that will deliver real benefits to 
California and our constituents. I look forward to working with 
Chairman Calvert and my other colleagues in pursuit of this 
important goal. Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Ose follows:]

Statement of the Honorable Doug Ose, a Representative in Congress from 
                        the State of California

    Chairman Calvert and Members of the Subcommittee. Thank you for 
convening this hearing today and allowing me an opportunity to provide 
this statement for the record.
    The Sacramento River in Northern California runs through the heart 
of my district. This great river provides water throughout Northern 
California. It's the primary source for both the Federal Central Valley 
Project and the California State Water Project, which provide water for 
millions of Californians.
    Certain water suppliers in my district this year--after five 
consecutive wet years--are scheduled to only receive 60 percent of 
their contract amount. These water supplies have been curtailed by the 
Federal Government despite the express promises made to my constituents 
that they would be able to fully utilize the local water resources in 
the Sacramento Valley before water would leave the region. We continue 
to use our water more efficiently, but still find the supply too 
limited.
    In many ways the solution is simple. We must create a larger supply 
to meet increasing demands. With California's population increasing by 
nearly 600,000 people a year and an agricultural economy that leads the 
world, if we continue at the state and Federal level with the current 
approach to our water challenges we will be in the same disaster we are 
currently experiencing with energy. It is time to take necessary steps 
to improve our water supplies throughout California. Congress must make 
a major commitment to authorize the new infrastructure that will be 
necessary to meet California's water supplies for the next thirty 
years, including new water storage facilities and fish screens to 
assure reliable agricultural and municipal supplies and to protect 
fish. There must also be a major commitment that requires the Federal 
and state agencies to partner with local interests to develop and 
manage their water supplies at the local level.
    In light of the above, I am willing to meet Senator Feinstein 
halfway on the proposed CALFED legislation. It is imperative that 
specific, binding language be included in the bill authorizing the 
construction of above ground water storage facilities, one at Sites 
(north of the delta) and another one south of the delta.
    We are on the verge of a major opportunity to advance these water 
supply goals in a way that will deliver real benefits to California and 
our constituents. I look forward to working with Chairman Calvert and 
my other colleagues in pursuit of this important goal.
                                 ______
                                 
    Mr. Calvert. Now, I would like to recognize the panel of 
witnesses that we have first with us today, Mr. Steven Hall, 
the Executive Director for the Association of California Water 
Agencies, and Mr. Wayne Cook, the Executive Director for the 
Upper Colorado River Commission.
    I would like to recognize Mr. Hall to testify for five 
minutes. The timing lights, you gentlemen have both been here 
before, I believe, and you will know how that works, so we 
would like to limit the testimony to five minutes to give 
plenty of time for questions afterwards. Any additional 
statements you may have, we will be happy to submit for the 
record.
    With that, I will recognize Mr. Cook first to testify for 
five minutes.

  STATEMENT OF WAYNE COOK, EXECUTIVE DIRECTOR, UPPER COLORADO 
                        RIVER COMMISSION

    Mr. Cook. My name is Wayne Cook and I am the Executive 
Director of the Upper Colorado River Commission. The Commission 
is an interstate compact administrative agency created by the 
Upper Colorado River Basin Compact of 1948.
    The Colorado River Compact of 1922 provided 7.5 million 
acre feet of exclusive beneficial consumptive use of Colorado 
River water for each portion of the Colorado River Basin above 
and below Lee Ferry. However, the Upper Basin guaranteed that 
deliveries below Lee Ferry would not be less than an aggregate 
of 75 million acre feet for any period of ten consecutive 
years. Because of this Upper Basin guarantee, during extended 
dry cycles, the Upper Basin cannot depend on its full 7.5 
million acre feet because of insufficient carry-over storage. 
Conservative estimates suggest that only 6 million acre feet of 
depletion may be available to the Upper Basin.
    The Upper Basin is currently using about 4.7 million acre 
feet per year. These Upper Basin depletions are accomplished 
not by releases from Lake Powell, but by diversions far 
upstream at private State and Federal projects. Water 
originating in the Upper Basin but not used for Upper Basin 
development is stored in Lake Powell to meet our commitments 
under the 1992 compact. Lake Powell stores and releases water 
based on the annual relationship of Upper Basin water supply, 
use, and Lake Powell releases to meet downstream compact 
commitments. These criteria effectively determine how water, 
which cannot be reasonably applied to beneficial uses in the 
Upper Basin, are released from Lake Powell for use in the Lower 
Basin. These criteria, the operating criteria, are called 
equalization and attempt to keep Lake Mead and Lake Powell at 
similar storage levels.
    Colorado River mainstream water use in the Lower Basin is 
controlled by the 1964 decree in Arizona v. California, which 
mainstream water is subject to the Secretary of Interior making 
an annual determination of shortage, normal, or surplus water 
conditions in the basin. In the context of these 
determinations, California is able to divert less than 4.4 
million acre feet in shortage, 4.4 million acre feet under 
normal conditions, and more than 4.4 million acre feet during 
surplus declarations. These become the limit of California's 
use unless water apportioned to other Lower Basin States is 
temporarily available due to non-use.
    California water has exceeded its apportionment of 4.4 
million acre feet in the past two decades. Users of the other 
Lower Basin States are now at or near full utilization of their 
apportionments, as well. Therefore, California must now live 
within its basic apportionment. This transition can be gradual 
and can be accomplished within the law of the river.
    On January 18 of this year, the Secretary of Interior 
issued a record of decision for the approval of Colorado River 
Interim Guidelines to be used by Interior through 2015 in 
making surplus deliveries to California. These guidelines would 
make surplus water available to meet Arizona, Nevada, and 
Southern California's urban water needs through 2015. Without 
these guidelines, Southern California's urban water needs will 
not be met.
    There is a probability that these needs will be reduced to 
about 35 percent of surpluses during 2005 and less than 20 
percent in 2040, primarily due to Upper Basin development. It 
is important to note that surplus water necessary to keep 
Metropolitan Water District's aqueduct full in 2001 would not 
have been available absent the agreement of these seven Basin 
States to these criteria.
    These guidelines are the direct result of an intense five-
year effort by the seven Basin States to reach consensus on the 
matter of surplus determinations. First set forth within a six 
Basin State agreement in late 1998, later achieving seven Basin 
State consensus in mid-2000, these guidelines provided 
incentives to California to reduce its Colorado River uses to 
4.4 million acre feet in normal years. They also provide an 
assured urban water supply to each of the Lower Basin States 
during the period of transition and assured that further Upper 
Basin development will not be jeopardized. Arizona's Central 
Arizona Project is also provided storage protection up to a 
million acre feet as agreed to reparation arrangements.
    With California's implementation of the provisions of its 
Colorado River Water Use Plan, the Metropolitan Water 
District's aqueduct remains 400,000 acre feet per year short of 
being at full capacity. Until 2016, this shortfall will be 
filled by surplus deliveries from the Colorado River. After 
2015, Metropolitan will only get surplus water, perhaps less 
than 30 percent of the time. In order to ensure a full aqueduct 
of Colorado River water after 2015, Metropolitan Water District 
will need to facilitate additional agricultural to urban 
conservation transfers.
    An enhanced level of trust amongst the seven Basin States 
has emerged as a result of these guideline discussions. 
California must maintain that level of trust and complete its 
Water Use Plan within the time frame promised to the other 
Basin States.
    I will quit now, and I have some summary comments that I 
can make later, if appropriate.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Cook follows:]

   Statement of Wayne Cook, Executive Director, Upper Colorado River 
                               Commission

    My name is Wayne Cook, and I am the Executive Director of the Upper 
Colorado River Commission. The Upper Colorado River Commission is the 
interstate compact administrative agency created by the Upper Colorado 
River Basin Compact of 1948. The member States of the Upper Colorado 
River Commission are: Colorado, New Mexico, Utah and Wyoming. Since its 
inception, the Commission has actively participated in the development, 
utilization and conservation of the water resources of the Colorado 
River Basin.
    The member States of the Upper Colorado River Commission have 
always given strong support to water resources development in the Upper 
Colorado River Basin and in particular to the Colorado River Storage 
Project and participating projects. Through the development made 
possible by these and other projects, the waters of the Colorado River 
allocated to the Upper Basin States are presently being utilized and 
can be utilized for future beneficial consumptive use.
    The Colorado River Compact of 1922 provided 7.5 million acre-feet 
(maf) of exclusive beneficial consumptive use of Colorado River water 
for each portion of the Colorado River Basin above and below Lee Ferry. 
(Additional system rights were provided for the Lower Basin States and 
Mexico.) However, the Upper Basin guaranteed that deliveries below Lee 
Ferry would not be less than ``an aggregate of 75,000,000 acre feet for 
any period of 10 consecutive years. . .''. Because of this Upper Basin 
guarantee, during extended dry cycles, the Upper Basin cannot depend on 
its full 7.5 maf allocation per year because of insufficient carryover 
storage. Conservative estimates made for planning purposes by the 
Department of the Interior suggest that only 6 maf of depletion may be 
available as a dependable supply for the Upper Basin in spite of the 
fact that an average of 15 maf originate in the Upper Basin.
    In negotiating the 1922 Compact the Upper Basin States sought to 
insure it's ability to develop its share of the Colorado River in 
perpetuity, as needs and economic conditions allowed. The Upper Basin 
is currently using about 4.7 maf per year. These Upper Basin depletions 
are accomplished not by releases from Lake Powell but by diversions far 
upstream at private, State and Federal projects.
    Water originating in the Upper Basin but not used for Upper Basin 
development is stored in Lake Powell to meet our commitments under the 
1922 Compact. Lake Powell stores and releases water based on the annual 
relationship of Upper Basin water supply (runoff), uses and Lake Powell 
releases to meet downstream Compact commitments pursuant to the 
``Criteria for Coordinated Long-Range Operation of Colorado River 
Reservoirs'' mandated by the Colorado River Basin Project Act (Public 
Law 90-537). These criteria effectively determine how Waters which 
cannot reasonably be applied to domestic and agricultural uses in the 
Upper Basin are released from Lake Powell for use in the Lower Basin in 
addition to our guarantee of 75 maf in every 10 years. This reservoir 
operation is called ``equalization'' and attempts to keep Lake Powell 
and Lake Mead at similar storage levels to the extent possible.
    Colorado River mainstem water use in the Lower Basin is controlled 
by the March 9, 1964 decree in Arizona v. California. Mainstem water 
availability is subject to the Secretary of the Interior making an 
annual determination of shortage, normal and surplus water conditions 
in the Colorado River Basin. In the context of these determinations, 
California is able to divert less than 4.4 maf (shortage), 4.4 maf 
(normal) or more than 4.4 maf (surplus) for use in Southern California. 
These become the limits of California's use unless water apportioned to 
other Lower Basin States is temporally available due to non-use.
    California's water use has exceeded it's apportionment of 4.4 maf 
for the past two decades. Users in the other Lower Basin States are now 
at or near full utilization of their apportionments as well, therefore 
California must now live within it basic apportionment. This transition 
can be gradual and can be accomplished within the Law of the River.
    On January 18, 2001, the Secretary of the Interior issued a Record 
of Decision for the approval of ``Colorado River Interim Surplus 
Guidelines'' to be used by Interior through 2015 in determining 
``surplus'' deliveries to California. These Guidelines under average 
water supply assumptions would make surplus water available to fully 
meet Arizona, Nevada, and Southern California's urban water needs 
through 2015. Without these Guidelines, the probability of these needs 
being fully met reduces to approximately 35 percent by 2005 and less 
than 20 percent by 2040. It is important to note that surplus water 
necessary to keep MWD's aqueduct full in 2001 would not have been 
available absent the agreement of the seven Basin States to these 
Guidelines. The increased risk in the future of not having a surplus 
determination is a direct result of the Upper Basin States exercising 
their rights to increase their depletions pursuant to the Colorado 
River Compact of 1922.
    These Guidelines are the direct result of an intense five-year 
effort by the seven Basin States to reach consensus on the matter of 
surplus determinations. First set forth within a six Basin State 
agreement in late 1998, and achieving seven Basin State consensus in 
mid 2000, these Guidelines provide incentives to California to reduce 
it's Colorado River uses to 4.4 maf in normal years. They also provide 
an assured urban water supply to each of the Lower Basin States during 
the period of transition, and assurance that further Upper Basin 
development will not be jeopardized. Arizona's Central Arizona Project 
is also provided shortage protection of up to 1.0 maf as a result of 
agreed to reparation arrangements where California contractors would 
limit their use of Colorado River water to mitigate the impacts of any 
declared shortage conditions on other Lower Basin States.
    With California's implementation of the provisions of its 
``Colorado River Water Use Plan,'' MWD's aqueduct remains 400,000 acre-
feet per year short of being at full capacity. Until 2016, this 
shortfall will be filled by surplus deliveries from the Colorado River. 
After 2015, MWD will only get surplus water perhaps less than 30 
percent of the time. In order to insure a full aqueduct of Colorado 
River water after 2015, MWD will need to facilitate additional 
agricultural to urban conservation transfers.
    An enhanced level of trust amongst the seven Basin States has 
emerged as a result of these Guideline discussions. California must 
maintain that level of trust and complete it's Water Use Plan within 
the time frame promised to the other six Basin States.
    In summary, Upper Basin development can and will continue under the 
terms of the Colorado River Compact of 1922 until Upper Basin 
depletions approach the dry cycle firm yield available to the Basin. 
This continued development will cause lower average reservoir 
conditions in Lake Powell and Lake Mead, respectively. Lower lake 
levels at Lake Mead result in fewer opportunities for surplus water 
availability on the Colorado River after 2015. This decreased 
probability of surplus water will require MWD to find other solutions 
internal to California to be able to rely on a full Colorado River 
Aqueduct. The interests of the other six Basin States, from 1922 to 
present, have been to achieve as much certainty and security as 
possible in the use and allocation of the Colorado River System. The 
Compact assured the Upper Basin the right to develop it's share of the 
Colorado River in perpetuity. The Upper Basin has and will continue to 
rely upon the legal framework that now requires California to reduce 
it's use of Colorado River Water to 4.4 maf in years of a normal 
determination
                                 ______
                                 
    Mr. Calvert. Mr. Hall, you may begin your testimony.

 STATEMENT OF STEVEN HALL, EXECUTIVE DIRECTOR, ASSOCIATION OF 
                   CALIFORNIA WATER AGENCIES

    Mr. Hall. Thank you, Mr. Chairman, members of the 
Subcommittee. My name is Steve Hall. I am the Executive 
Director of the Association of California Water Agencies. We 
represent local water agencies throughout the State of 
California. Our largest members serve as many as 17 million 
people in California and our smallest ones serve as few as 
five.
    What I would like to do to make maximum use of my time is 
refer to some charts that I believe the Committee staff have 
provided to the members of the Subcommittee. They describe what 
has been going on in California, and I think the reason it 
makes sense to present them here is it not only represents what 
is going on in California, it represents something similar to 
what is going on throughout the West. So if I can refer the 
Subcommittee to these bar charts, I will walk you through them 
quickly.
    The first simply represents the trend lines in annual 
winter run salmon escapement to the upper Sacramento River. The 
winter run is endangered species and you can see why. Through 
the 1970's and 1980's, populations were fairly healthy. 
Beginning in the early 1980's, they dropped dramatically, and 
in the late 1980's/early 1990's, they dropped to such 
critically low levels that they were listed as endangered.
    Now, there was a reaction to that and the reaction is shown 
on the next chart. This shows that beginning in 1991, the 
Endangered Species Act kicked in to protect these species and 
began reducing water deliveries to water users in many areas of 
California. Then in 1992, the Central Valley Project 
Improvement Act was passed, which put fishery and other 
environmental needs on an equal basis to water supply and there 
was another drop in water supplies. Then in 1994 and 1995, an 
accord was signed which reallocated a substantial portion of 
the remaining supplies to the environment. And then beginning 
in 1996, there have been a number of other actions under this 
Central Valley Project Improvement Act, all of which have led 
from water deliveries out of the Bay Delta Estuary, or the hub 
of our water supply system in California, from over five 
million acre feet annually to less than 2.5 million acre feet 
annually, a drop of over 50 percent.
    Now, of course, the next chart shows that just because our 
water deliveries have dropped does not mean our population has 
stopped growing. From 1987 to 2001, it grew from 28 million to 
34 million people. It is projected by 2020 to grow to 47.5 
million people.
    We clearly have to tackle this problem, this tension 
between water for the environment and water for our economy and 
our quality of life. So if you will look at the next chart, it 
shows the funding dedicated to environmental restoration. We 
have supported this funding, those of us in the water 
community, because we recognize that until populations of 
species are stabilized, water supplies will not be stabilized. 
So beginning in 1995, we passed first Proposition 204, which 
was a $1 billion bond issue at the State level, and in the last 
year, in March of 2000, we passed a $2 billion bond issue, 
which was for both environmental restoration and water supply 
and water quality improvement.
    So you can see from 1995 through 2000 the funding for 
environmental restoration has ramped up substantially, and the 
next chart shows there has been a corresponding biological 
benefit. This shows fall run escapement on the Sacramento and 
major tributaries. You can see that in the early 1990's, the 
numbers were low. Since we began investing in these ecosystem 
improvements, you can see the numbers have gone up 
substantially. We believe they will continue to rise as we 
continue to make these investments.
    And now, if I may get to the punch line, we can and we need 
to make similar investments in our water infrastructure system. 
The next chart shows potential increases in water deliveries if 
we implement the projects that are listed on the right-hand 
axis of that bar chart.
    I am not going to walk through each one of these projects, 
but every one of them is something that provides additional 
system flexibility. It could be conservation, water 
reclamation, a bypass system in one instance around a reservoir 
that drops to such a low level that the water quality is 
impaired. All of these help meet our water needs in California 
while improving environmental conditions.
    And then, lastly, the investment cannot stop there. We also 
have to invest in new storage, both surface and groundwater 
storage. The last bar chart shows, first of all, our baseline, 
what storage reservoirs that have been built in the last few 
years, and then as the bar charts rise, each one of those 
different colors shows various projects that are contemplated 
in California, part of a State-Federal partnership that 
developed a blueprint for California called CALFED. If we make 
these investments, California will be able to meet its water 
needs both to fuel its economy, improve its quality of life, 
and keep a sound and healthy environment.
    Congressman Calvert, the Chairman of this Subcommittee, has 
indicated his intention to introduce legislation to authorize 
this. I want to pledge to the Chairman and to the members of 
the Subcommittee that ACWA will be a full and willing partner 
in the crafting of that legislation, and I thank you for the 
opportunity.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Hall follows:]

   Statement of Stephen K. Hall, Executive Director, Association of 
                       California Water Agencies

I. Introduction
    Chairman Calvert, members of the Subcommittee, thank you for the 
opportunity to speak before you today. My name is Steve Hall, and I am 
executive director of the Association of California Water Agencies 
(ACWA) the largest and oldest collection of public water agencies in 
the country. ACWA's members are responsible for 90 percent of the water 
delivered in California--our smallest member serves fewer than 50 
people, and our largest serves 17 million urban southern Californians. 
This testimony, and the attached graphs are intended to illustrate the 
looming water crisis that faces California, and the need to make 
investments now to avert that crisis, in California and throughout the 
West.
II. California's Water Needs
    Today, California's myriad water systems support 35 million people 
and the world's seventh largest economy. The state's water 
infrastructure is a network of projects large and small, assembled over 
decades and with scores of different funding sources. ACWA and its 
member agencies have played a major role in every one of California's 
large scale water development efforts, from the installation of public 
hydropower facilities, to construction of the Central Valley and State 
Water Projects, to the environmental restoration efforts currently 
moving forward all across the state.
    But while the development of California's water system was 
undertaken with the best engineering available at the time, no 
technology can completely overcome the simple reality that 75 percent 
of our state's water falls in its northern half, while 75 percent of 
its people live hundreds of miles to the south. In between are scores 
of unique ecosystems, each with its own water needs amid growing human 
water requirements.
    The vagaries of weather patterns and rapidly changing population 
trends have a way of confounding water supplies, and this is one of the 
guiding truths of California. To overcome this obstacle, planners have 
employed a variety of means over time to develop and move water to the 
people who need it. In the 1930s the Federal Government constructed the 
Central Valley Project. A network of dams, levees and canals, the 
Federal CVP is the state's largest water project and today delivers 
roughly 3 million acre-feet of water to farms and cities, and underpins 
the state's agricultural economy while providing essential flood 
control.
    In the 1960s California embarked to build its own water supply 
network through the State Water Project. The SWP today moves from 2 to 
4 million acre-feet of water throughout the state, keeping food prices 
stable and affordable and providing drinking water for millions of 
people in the valley and south state.
    But while these systems are impressive, in the years since 
construction of the CVP and SWP, no equally grand water project has 
been allowed to move forward. The very few reservoirs built since the 
SWP were built only after years of public review and inevitable 
political controversy. Nevertheless, during this same time, 
California's population has continued to grow, and has nearly tripled 
since concrete for the SWP was poured. In the last 11 years, only two 
regional reservoirs have been built in California, even though eight 
million people have come to the state during that time. Meanwhile, new 
awareness of environmental water needs and commitments to protect 
salmon have further taken developed supplies away from water users and 
re-allocated it to the environment. Over the last decade, several 
million acre-feet of water have been shifted each year to meet new 
environmental mandates. This rededication of resources, coupled with 
rapid population growth, has vastly destabilized California's water 
picture.
    As a result, California's water system--constrained by its finite 
supplies--exists in a continual state of conflict between multiple uses 
and competing priorities. Beneath the larger disputes over finite water 
supplies and how to use them, lie even more conflicts over the quality 
of delivered water, its source, even its temperature in the streambeds. 
Under this fractured scenario, California has for years abandoned water 
issues to the political realm, missing out on key opportunities to work 
together to stabilize its water supply picture and plan for the future.
    To compensate for these conflicts, water managers have gone to 
great lengths to stretch existing water supplies. California leads the 
nation in water recycling and reclamation efforts. Groundwater recharge 
and desalination projects are in place in a number of communities 
across the state. Drip irrigation and farm conservation systems are 
growing 50 percent more food and fiber than was grown 20 years ago on 
the same amount of water. And local water managers have implemented 
water conservation efforts that are so successful that southern 
California's large urban centers today import the same amount of water 
they did in 1975. A decade ago California water agencies voluntarily 
began a massive water conservation program. Today more than 150 
California water agencies are spending millions of dollars each year on 
conservation. The result is that today California saves about a half 
million acre-feet of water a year through conservation.
    Only through such aggressive, pioneering measures have California's 
existing water needs been met. But most of California's water system 
was built decades ago, before modern construction techniques were 
available. Conservation and reclamation efforts can do a lot, but they 
cannot singlehandedly meet California's modern water needs. As a 
result, not much more can be squeezed from a system that is outdated 
and grossly inadequate. The outdated, undersized system in place today 
can barely meet the needs of California's agricultural, urban, 
environmental and business sectors during wet years as recent events 
have shown, and would be unable to meet even basic needs in a sustained 
drought.
    In spite of the many systems in place to equitably distribute water 
supplies, new mandates proliferate, requiring environmental diversions 
of water, and resulting in multiplied conflicts. While well 
intentioned, the implementation of the Endangered Species Act, Clean 
Water Act and Central Valley Improvement Act are now demanding 21st 
century performance from a system that essentially pre-dates the Cold 
War. In 1999, after a fifth straight wet year, this fact became clear 
when regulatory agencies unilaterally shut down water pumping plants to 
protect migrating schools of Delta smelt. This action nearly brought 
Silicon valley industries to a halt, and threatened to cut off key 
supplies to valley farms at the peak of the irrigating season. While it 
is true that society as a whole has come to put a greater premium on 
protecting natural resources, the pressures of increasing population 
have made it more difficult to do so.
    Many of the environmental statutes today governing water management 
ignore this basic tension, simply trying to force a change back to a 
world without man's footprint. The limitations of this approach are 
increasingly being seen in the strains on California's water system. If 
we are going to satisfy both our desire to protect fish and waterfowl, 
while retaining a viable ``habitat'' for 35 million human beings, we 
are going to have to invest in new management structures based on 
state-of-the-art science and technology. These include new irrigation 
equipment, more efficient residential use, and more recycling of water. 
But even if we do all these things, we also need more storage of 
water--so that there will be enough in the drier years for both people 
and fish.
    Droughts and flood meanwhile play havoc with the state's water 
reliability, placing the state's population and economy in an 
increasingly fragile position beneath a looming water crisis. 
California needs ways to balance competing needs while accounting for 
its varied weather, and this is only possible through investment in its 
antiquated water infrastructure.
III. Interdependence with Other States
    Like much of the American west, California's water system operates 
in a state of close interdependence with that of other states, even 
Mexico. The Klamath river flows across the Oregon border. Lake Tahoe 
sits astride our eastern neighbor, Nevada. Watersheds and rivers do not 
comply with local or interstate boundaries, and as such, necessitate 
watershed planning across agency lines and state borders.
    Perhaps the best example of California's interdependence with her 
neighbors is played out on the Colorado River. In 1922, representatives 
of seven states, including California, negotiated the Colorado River 
Compact - a road map for dividing the Colorado's waters for flood 
control and economic uses in each of the states. The compact was meant 
to remove causes of present and future controversies surrounding 
apportionment of the river's waters. But those who signed the compact 
79 years ago could not have predicted the enormous urban growth in the 
desert Southwest, the emphasis Americans would place on protecting the 
environment in later decades, or the technological advances that have 
since come about.
    For years, California has taken up to 1.3 million acre-feet more 
than its contractual share of 4.4 million acre-feet from the Colorado, 
enabling billions of dollars in annual productivity from southern 
California industry and agriculture. But now, neighboring states need 
that water and a new agreement has had to be reached. Accordingly, 
California is reducing its use of the Colorado so that its neighbors 
can also grow. This interdependence, and the successful adoption of a 
compromise, will foster balanced growth in the American west. More 
importantly, the solution will be graduated in over time, preventing 
disruption to the relevant communities and protecting the ecosystems 
that have grown up around an altered, though living river.
    On Lake Tahoe, joint partnerships between Nevada and California 
have enabled the preservation of a national environmental and 
recreational treasure. Interstate legislative successes like the one 
forged last year between the Congressional delegations of California 
and Nevada provides the blueprint of collaboration necessary to promote 
regional water stewardship. This spirit should infuse efforts to 
resolve the water challenges that lie ahead.
    In each of these examples, neighboring states have forged 
compromises that enable California to produce. In return, the United 
States has in California an engine of economic growth that propels its 
varied economies, develops new technology and feeds millions of people 
beyond its own borders. Just as electricity is transmitted across state 
lines to cities in California, so has the water it shares with its 
neighbors brought benefits to many on both sides of the state line.
    But by the same token, unless we lead the way to increased 
California water capacity, the rolling blackouts currently buffeting 
western power supplies could very likely blackout local water supplies, 
with far more severe results.
IV. Benefits of an Improved California Water Picture
    Environmental mandates adopted during the past generation aim to 
stabilize declines in fish runs and wetlands, and redress environmental 
damage that has been caused by an infrastructure system constructed 
before the age of environmental protection. At the same time, these 
efforts have exchanged environmental progress for economic uncertainty, 
to the point where today, real businesses are facing skyrocketing 
costs, and making real decisions to leave the state.
    If California's water supply picture can be stabilized, 
considerable additional progress can be made on behalf of the 
environment. A secure, modern water infrastructure that captures more 
of the excess water during floods for use during dry periods could 
drastically reduce pressure on existing river systems. As things stand 
today, vast quantities of fresh water run out to the Pacific Ocean 
during floods because, even if the authority to do so were granted, we 
physically don't have enough room to store the water. Floods in 
themselves are harmful, but if their excess flows could be stored, 
significant amounts of water could be left in rivers during later years 
to benefit fish and wildlife.
    The wetlands that are home to millions of migratory birds offer 
another graphic example of how improvements in California carry over 
into neighboring states. The health of the flyways and ecosystems in 
Oregon, Washington and Alaska that support migrating waterfowl are 
acutely impacted by the condition of wetlands in our state. With 
balanced management and a stabilized water system in California, many 
wetlands that might otherwise serve as a needed water source can be 
preserved and improved.
    A stabilized California water picture will also mitigate for the 
state's chief crisis today--a shortage of power. Water pumping--pushing 
it over mountain ranges, and pulling it from out of the ground--is the 
greatest single use of electricity in the state. Refining and diluting 
finite water supplies to meet current Safe Drinking Water Act standards 
further consumes the state's chronically short supplies. If more water 
were available, distributed across the state in surface and underground 
reservoirs to meet these needs, more power would be generated, and far 
less power would be needed to quench the thirst of California's water 
users.
    But perhaps the best example of the benefits of an improved 
California water picture is the benefit promised to the regional 
economies. Central valley agriculture allows school lunch programs and 
fresh produce to remain affordable. Silicon valley industry develops 
semiconductors and powers space exploration. Statewide manufacturing, 
filmmaking, tourism, recreation, construction, housing, fishing, 
transportation and education pump billions of dollars into the region 
that spills over and multiplies across the western states. If this is 
to continue and future generations are to enjoy, at a minimum, the 
prosperity experienced by our own, we must safeguard and improve 
California's water picture.
V. The Key to Improving California's Water Picture
    California is mired in a power crisis today for several independent 
reasons, but chief among these is its failure to recognize mounting 
demand for a finite power supply. This simple discrepancy cannot be 
allowed to repeat itself in water, for the stakes are far greater and 
the remedies far more complex.
    Today, the average amount of time necessary to complete a water 
storage reservoir is 15 years, from planning to design to construction. 
Unfortunately, the demand for water does not wait that long. California 
has been able to get by with its existing demands only through the 
innovative water measures mentioned above. But the effectiveness of 
those measures has reached their limit. As has happened in the energy 
market, unless we invest in expanding the capacity of our water 
infrastructure, California will fall victim to another totally 
foreseeable crisis, for no other reason than its refusal to prepare.
    In our view, the best way to avoid this crisis is to begin 
preparing through targeted investments in California's water 
infrastructure. These investments will have demonstrated environmental 
and economic benefits, not only in California, but throughout the West. 
California can provide enough water for a healthier economy and a 
healthier environment; for safe drinking water while continuing to 
irrigate; for healthy ecosystems and water to run our high tech 
businesses; for a healthy interstate flyway and for commercial fishing; 
for a high quality of life for Californians and a high quality habitat 
for our wildlife.
    But California can only provide these things through a partnership 
among Federal, state and local governments. That partnership must 
involve the intellectual capital and the funding necessary to meet all 
of these needs. The interest, indeed the need within California to make 
these investments is clear. That is why Californians overwhelmingly 
passed a $1 billion water bond in 1996, and another $2 billion water 
bond in March, 2000.
    But it is also clear that there is a strong Federal interest in 
making these investments. First, there is a strong Federal interest 
because the Federal Government owns and operates the Central Valley 
Project, the single largest water project in the state of California. 
The continued viability of that project depends on making these 
investments. Second, there is a strong Federal interest in protecting 
and enhancing environmental treasures, such as the San Francisco Bay-
Delta Estuary. Congress has demonstrated a commitment to such 
environmental protection through investments in Chesapeake Bay, the 
Great Lakes and, most recently, the Florida Everglades. The need for a 
similar investment in this estuary is no less compelling. Third, the 
important Federal policy of improving the safety of drinking water for 
all Americans is causing California water systems to make substantial 
investments in water quality. At the same time, they are also being 
asked to support environmental improvements.
    Finally, many of the laws that have reallocated much of 
California's water resources are Federal laws like the Federal 
Endangered Species Act and the Central Valley Project Improvement Act. 
These laws, while providing broad societal benefits through 
environmental protection, have had the effect of destabilizing our 
water supply system and exacerbating the conflict among competing needs 
for water within the state. It is an unfortunate fact that the broad 
societal benefits from the preservation of species is accomplished at a 
cost borne by a relatively small number of citizens. We do not believe 
this mistake should continue.
    There are those who call for any investments in water 
infrastructure to be paid for exclusively by water users, on the basis 
that only those who directly use the water developed see benefit from 
it; and with the further argument that any environmental water that has 
been reallocated has been simply given back to the environment from 
which it was taken. We categorically reject the notion that there is no 
broad societal benefit to water infrastructure investments that enhance 
our environment as well as our ability to deliver safe, reliable, 
affordable water. There is clearly an interest in producing these 
economic, public safety and environmental benefits, both at the state 
and Federal levels.
    We therefore believe any plan to finance the investments that are 
needed should be shared among water users, the state government and the 
Federal Government. The share borne by water users should be 
commensurate with the benefits that they receive, and structured in a 
way that accounts for the fact that any future water development will 
come at a substantially higher cost than water developed earlier, a 
portion of which has been reallocated. This point is important because 
when those earlier water projects were developed, it was on the basis 
of contracts that were entered into in good faith by local interests. 
To the extent conditions have changed by virtue of a changing of 
societal values, the cost of those changes should be borne broadly, not 
exclusively by those who are under current contracts.
    We will support a financing plan that takes all of these factors 
into account and which fairly apportions the costs accordingly.
    The Chairman of this Subcommittee, Congressman Calvert, has 
announced his intention to develop legislation to authorize 
implementation of a comprehensive plan to develop additional water 
supplies and restore environmental values within California. This 
comprehensive plan has come to be known as CALFED, based on the 
partnership between the state of California and the Federal Government, 
which led the effort to develop this plan. ACWA and its members have 
been actively involved in the development of this plan, and we support 
its implementation, provided it can be implemented in a way that 
balances competing needs. We wholeheartedly pledge our support for 
Congressman Calvert and a commitment to work cooperatively with him as 
well as other members of Congress and stakeholders within California to 
develop this legislation.
                                 ______
                                 

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    Mr. Calvert. I will begin the round of questions, and I 
will impose a five-minute rule upon myself and on the rest of 
the members and I am sure we will have an opportunity for a 
second round if there are some additional questions.
    Mr. Hall, how much water has been reallocated from the 
water users to the environment?
    Mr. Hall. Well, if you look at this one chart, this second 
chart, it is pretty clear that about half of the water 
currently that was exported from the Bay Delta Estuary to areas 
in central and Southern California has been reallocated, and it 
is a little over two million acre feet.
    Mr. Calvert. About two million acre feet entirely to the 
environment?
    Mr. Hall. Right.
    Mr. Calvert. Should projects receiving State and Federal 
funds be required to provide a benefit-cost ratio?
    Mr. Hall. I think any project that is contemplated today 
has to pass the muster of the benefits exceeding the costs.
    Mr. Calvert. And in regards to that, should we build the 
most cost-effective projects as far as CALFED is concerned 
first, or should they all receive equal priority?
    Mr. Hall. I think what we have to look at is the overall 
benefit-cost ratio, and those with the highest benefit-cost 
ratio should probably go first. That makes sense.
    Mr. Calvert. We saw the charts, but with the increasing 
demand for water and low supplies, how will the various fish 
recovery programs be affected around the State as increasing 
demand is proliferating all throughout the State of California?
    Mr. Hall. There are some who, I am sure, would like to see 
us go back to a natural system, tear down the dams and wipe out 
the levees, and that might work if you did not have 35 million 
people and projected to go to 50 million. But the fact of the 
matter is, the only way for us to reduce the tension between 
environmental needs and human needs is to invest in a system 
that will provide more water when it is most critically needed.
    California is and always has been a State with highly 
variable water supplies. It does not rain from May through 
October and there are some extremely wet periods, flood periods 
even. Nineteen-ninety-seven was the flood of record, followed 
by extreme droughts. We have to be able to conserve water, 
store it and conserve it, so that we can make water available 
for fish as well as for people.
    Mr. Calvert. And that comes to your last chart, water 
storage. Based upon the different methods of storage throughout 
California, both south and north, you show an additional 
storage of about 2.5 million acre feet of water, is that 
correct?
    Mr. Hall. Well, right now, the two projects that have been 
built in recent--
    Mr. Calvert. Excuse me, six million acre feet of water. I 
was looking at the wrong chart.
    Mr. Hall. We can take that from a little under one million 
acre feet to over six million acre feet.
    Mr. Calvert. Right. Now, when we have the six million acre 
feet of water storage constructed, how long will that take us 
into the future if, in fact, all of that storage is, in fact, 
created?
    Mr. Hall. If you can tell me how many babies are going to 
be born in California, I can tell you that number. I can tell 
you this. For the foreseeable future, for the planning horizon 
that is prudent for California, this will meet the needs for 
the State. You might say 2020, 2030 would be an appropriate 
planning horizon.
    Mr. Calvert. But certainly, at the very least, this must be 
completed in order to meet any of the requirements that people 
have outlined, both for the urban users, the rural users, and 
certainly for the environment.
    Mr. Hall. Well, we have spent the last six years, Mr. 
Chairman, discussing, debating, and flat arguing over what is 
the appropriate mix. If we do the right mix of these things on 
the last two bar charts, conservation, reclamation, water 
transfers, some of the other infrastructure items besides 
storage, and we build this surface and groundwater storage, we, 
I believe, can meet our needs. If we do not do that, it is not 
just my opinion, it is the collective opinion of the people who 
have been involved in CALFED that we will not meet those needs 
unless we take these actions.
    Mr. Calvert. Mr. Cook, you mentioned that the Metropolitan 
Water District will need to make other arrangements in its 
water contracts after 2015 as California is weaned down to its 
4.4 million acre foot allocation. Are you speculating, 
obviously, that the water is going to come from this additional 
storage and from better groundwater and recycling use in 
California? Is that your assumption?
    Mr. Cook. It could come from those sources, no doubt. It 
perhaps may also come from additional agricultural transfers, 
either as a result of infrastructure investment on the 
agricultural side to free up additional water. It could perhaps 
come from some fallowing of marginal lands. And ultimately, the 
Metropolitan Water District may have to go to the sea.
    Mr. Calvert. Including desalinization. I see my five 
minutes are up. Mr. Dooley?
    Mr. Dooley. Thank you, Mr. Chairman.
    Mr. Hall, on your proposed increases in water deliveries on 
the non-storage, you show a significant level of increase 
through urban conservation, almost to the tune of a million 
acre feet. Now, is that a million acre feet from today's uses?
    Mr. Hall. Yes.
    Mr. Dooley. Then you also show another almost, it looks 
like 500,000 acre feet of conservation through ag uses. What 
are the primary components that are going to lead to that level 
of return?
    Mr. Hall. In the urban setting, there are any number of 
things that can and are being done. Obviously, lower 
consumption inside the house, low-flow shower heads, low-flush 
toilets, clothes washers and dishwashers that use less water. 
Outside the house, there is even more potential for 
conservation. Obviously, within the industrial sector, there is 
a good deal of potential in water conservation within the urban 
setting.
    In agriculture, I hesitate to lecture you, Mr. Dooley, 
because you are a farmer, but there is potential to go to lower 
water-using forms of irrigation. I want to emphasize that most 
of this will not occur in the Central Valley, because even 
though an individual farmer in the Central Valley may implement 
water conservation, it does not necessarily lead to increased 
Basin-wide efficiency and lower water use because the water use 
in the Central Valley of California, according to the experts, 
is already 96 percent efficient Basin-wide, so there is not a 
lot of potential there. But in other areas in the State, there 
are some potential conservation savings.
    Mr. Dooley. What are the, I guess, the public policy issues 
and incentives that need to be put in place in order to secure 
this million acre feet of conservation in urban uses?
    Mr. Hall. I think, certainly, a partnership, a financial 
partnership among the Federal Government, the State government, 
and local interests needs to be there. I think incentives, in 
other words, need to be provided through grants and loans, 
through tax incentives, to those who are in the private sector 
so that they can make the investments necessary. And in the 
agricultural sector, obviously, to the extent you conserve, you 
ought to be able to keep the water that you have conserved. 
That is a pretty strong incentive.
    Mr. Dooley. On your proposed new storage capacity, and this 
relates, I think, to Mr. Ose's opening statement where he said 
he was willing to meet Senator Feinstein halfway, and I think 
he was implying that he thinks that in her CALFED 
reauthorization proposal, and you can correct me if I am wrong, 
Mr. Ose, is that there needs to be specific authorizations for 
some of these components. What is ACWA's position on that? Do 
you suggest, in the number of proposals that you have here, is 
ACWA on record as supporting the actual authorization as being 
in the CALFED bill?
    Mr. Hall. ACWA is on record supporting the record of 
decision that was issued in August of last year, and what the 
record of decision calls for is for an enlargement of Shasta 
Reservoir, an enlargement of Los Vaqueros Reservoir, and in-
delta storage, either the delta wetlands or its functional 
equivalent. It calls for further study of projects like Sites 
Reservoir with the clear understanding that the record of 
decision recognizes that there is a need for upstream of delta 
off-stream storages, like Sites Reservoir would provide.
    So while Sites is not quite ready to go, it clearly is the 
leading candidate for the kind of project that CALFED has said 
needs to be built. So we support going ahead with the studies 
necessary to determine whether, in fact, Sites can meet the 
benefit cost and environmental and economic feasibility tests, 
and if it does, it should be built.
    Mr. Dooley. In the last draft proposal that I saw from 
Senator Feinstein, I understood that it included the record of 
decision and basically included what I thought was the position 
that you just articulated. Is there a difference between what 
Senator Feinstein has offered and what you have just stated?
    Mr. Hall. My reading of the bill indicates that those first 
three projects that I identified, Shasta, Los Vaqueros, and in-
delta storage, that once the studies are done necessary to get 
a permit, they would go to the Secretary of Interior for 
approval, and that is sort of an internal due diligence kind of 
process. Projects like Sites would go to the authorizing 
Committees, beginning with this Subcommittee and then to the 
full Committee, and I think that is probably an appropriate 
demarcation or distinction between those two projects and 
probably a good way to go.
    Mr. Calvert. Mr. Osborne?
    Mr. Osborne. I am going to take a little different tack 
here. I am very interested in fishing, and I know that is 
probably a major difficulty for some of you folks, but I have 
looked at some of the charts there and in increasing your 
storage capacity, what will that do to the salmon runs? You are 
talking about the Sacramento River and some of the other 
places. Do you have any information there?
    Mr. Hall. Well, I do, and from all of the available 
information, it will improve the salmon runs, and let me 
explain how. We are not talking about putting dams on live 
streams. These are all off-stream storage reservoirs. The water 
would be pumped or diverted from the river during extremely 
high-flow periods, stored, and then re-released during drier 
times. The way our plumbing system works, all of this watershed 
feeds toward what we call the San Francisco Bay Delta Estuary. 
It is our largest and most important estuary, but it is also 
the hub of our water resource system. So the water users and 
the fish have to share it.
    What these reservoirs will do is allow us to provide more 
in-stream flow during these dry periods to protect fish that 
are migrating upstream and fish that are migrating downstream 
while at the same time being diverted when it is safe for the 
fish to divert and used for consumptive purposes, as well.
    It is a pretty well-designed system. It speaks to what we 
call the time value of water. In California, there are periods 
of time when we have got more than we can handle, and that is 
called a flood. There are a lot of periods--every year, it does 
not rain from May through October, so we have got to have water 
stored to meet needs during that period of time, both fish and 
human needs. And, of course, we do have droughts, and this year 
is a very dry year. Our snowpack is 63 percent of normal. So we 
are going to need the storage this year, not only to get us 
through the dry times but to get us through what we would 
normally think of as the wet times.
    As I said earlier in my testimony, right now, we have a 
huge conflict because there is not in those dry times enough 
water for both fish and people. We have got to store it when it 
is wet so that there is enough for fish and people. I believe 
if we make those investments, combined with investments in the 
habitat that we have already begun to make, you will see fish 
populations recover.
    Mr. Osborne. Thank you. I have no further questions, Mr. 
Chairman.
    Mr. Calvert. If the gentleman would yield some of your time 
over to me just for a second, I would like to carry on just 
what you said, because it is very important that as we are 
involved in an unfortunate energy shortage in the West, there 
was a comment made, I think at the previous hearing, we are 
making decisions now that sometimes we may not have made a year 
or two ago because of the crisis.
    If we do not have this additional storage, then additions 
may be made somewhere down the road where we would make 
decisions, whether it be for fish or for people, and I suspect 
that the latter will win out. So the additional storage, I 
think, if it is used properly, will not only assist in the fish 
populations but make sure that we have the storage necessary to 
make sure we meet both of those priorities.
    With that, Mrs. Solis, you are recognized for five minutes.
    Mrs. Solis. Thank you, Mr. Chairman.
    My question is for Mr. Hall. I wanted to ask if at all it 
is possible to compare the energy requirements of pumping water 
out of the delta down to Southern California with the energy 
requirements of water recycling.
    Mr. Hall. There is--I would like to speak to that, because 
we get water from a variety of sources. The surface water that 
we deliver from the delta is a relatively low energy user in 
comparison to other ways that we get water. For instance, if 
you deliver water out of the delta into Central Valley 
agriculture, it uses about four times less energy than pumping 
it from underground. Likewise, although I do not have a similar 
ratio on reclamation, reclamation is a relatively large energy 
user. It requires a lot of process, a lot of energy demand in 
order to take raw wastewater and turn it into usable reclaimed 
water.
    Mrs. Solis. To your knowledge, has anyone done a study on 
that?
    Mr. Hall. I do not know of a detailed study, but I do know 
people in the business who are very familiar with designing 
reclamation plants and I would be happy to provide that for 
you, Congresswoman Solis.
    Mrs. Solis. Just another quick question. You know, in the 
San Gabriel Valley, we have a very large aquifer there. Talking 
about storage, what are your thoughts on potential storage 
usage there for Southern California?
    Mr. Hall. Let me speak generally first on groundwater 
storage. I think much of the new water development that we do 
in California will be storing water underground. There is 
tremendous storage capability in California underground. It is 
relatively inexpensive. It is somewhere between environmentally 
benign and environmentally beneficial, depending on how it is 
designed and operated. So I think there is a lot of potential 
there.
    In Southern California, I commend you because you have 
taken the lead, not only in the San Gabriel Valley but in the 
West L.A. Basin, in Orange County, and elsewhere in the inland 
empire. There are groundwater projects either operating today 
or being planned and implemented, and I think the San Gabriel 
Valley is, frankly, one of the Los Angeles Basin's most 
valuable resources. It makes sense to not only protect it from 
contamination, but to make maximum use of it.
    Mr. Calvert. I thank the gentlelady.
    Mr. Ose?
    Mr. Ose. Thank you, Mr. Chairman.
    Mr. Hall, if I understand your graph here, the one with the 
big blue thing--
    Mr. Hall. Yes, sir?
    Mr. Ose. From 1992 to 1999, we had a reduction in delivery 
capability for whatever reason from about 5.2 million acre feet 
of water down to about 2.5 million acre feet, is that correct?
    Mr. Hall. That is correct.
    Mr. Ose. From your understanding of the situation in 
California, for the upcoming year, are we in a surplus or a 
deficit as it relates to deliverability of water?
    Mr. Hall. Most areas, certainly in the Central Valley 
Project Service area, which is the Federal project, and the 
State Water Project service area, they are substantially below. 
They are looking at about 40 percent deliveries right now.
    Mr. Ose. So we are in a deficit?
    Mr. Hall. Yes, a 60 percent deficit.
    Mr. Ose. Based on historical norms, how long can we expect 
the shortage to continue before we go back to wet years?
    Mr. Hall. Well, I think I understand your point, and if it 
is that we tend to have dry years back to back instead of one 
at a time. Of course, it is impossible to predict that, but in 
1928 through 1934, in 1976 and 1977, 1977 being the worst 
drought, one-year drought of record, and in 1986 through 1992, 
those were all back-to-back-to-back dry years. It could be a 
boomer of a wet year next year. It could be dry for the next 
ten. It is literally impossible to determine, but we often do 
get dry years back to back.
    Mr. Ose. What is the economic consequence of a 60 percent 
reduction in deliverable water supply?
    Mr. Hall. Well, I cannot recite the loss off the top of my 
head, but it has been well documented that in California, when 
urban and agricultural areas are short, there are substantial 
economic dislocations in the hundreds of millions and billions 
of dollars. During the last drought, some of the water users 
received one year no water at all from the project. They paid 
for 100 percent of it. They got none of it. I do not know of 
any small business that can be sustained on that basis.
    I will tell you this. Because of the reallocations of water 
back to the environment, if we were to have a repeat of the 
1986 through 1992 drought, those same water users who did not 
get water in one year, they would not get water for 3 years. 
Other urban water users, while they would get some water, they 
would be in the 30 to 50 percent supply range, requiring 
extraordinary rationing for industry and for homes.
    Mr. Ose. If I understand your testimony, the only way to 
assuredly meet the demands given the fluctuation in 
meteorological conditions is to create storage where we could 
hold water for dry years.
    Mr. Hall. Well, I really do think, if I can refer you to 
the last two charts, I think it is a mix. We clearly need 
storage. If we also implement the measures that are on the 
next-to-last bar chart, including conservation, reclamation, 
and the other projects that are listed there, it will all go 
toward correcting the imbalance that currently exists between 
demand and supply in California.
    Mr. Ose. So you need both parts?
    Mr. Hall. We need both parts.
    Mr. Ose. Okay. Now I want to go to Mr. Cook. Mr. Hall's 
testimony reflects current situation analysis. However, if we 
start losing water off the Colorado in California, does it help 
us or hurt us and to what degree is it positive or negative?
    Mr. Cook. Metropolitan Water District has a fairly 
substantial contract, I think, with water out of Northern 
California and I suspect as the water supply reliability from 
the Colorado River changes with time as the Upper Basin 
continues to develop and Lake Powell and Lake Mead are drawn 
down and surplus capability is stretched out further and 
further after 2015, the demand on the Metropolitan Water 
District will then increase from the northern part of 
California, not decrease.
    Mr. Ose. Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentleman.
    Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman. I have a couple 
of questions, both for Mr. Hall and to Mr. Cook.
    To Mr. Hall, given that we know we will be facing drought 
conditions as a matter of cyclical issues, given that we have 
by the year 2015 to live within certain water allocations, 
given that we have found a way to be able to reuse some water 
by treating it with tertiary treatment and that two-thirds of 
it is pumped into the ocean and that EPA now is mandating 
sanitation districts to give it a fourth treatment before it is 
pumped into the ocean, is it possible--has anybody begun to 
look at recuperating that water?
    If you are giving it a fourth treatment, basically, it is 
cleaner than the water we are now drinking, according to 
analysts. How do we begin to look at either nature's natural 
filtering to pump it back into the aquifers, back into 
reservoirs, or into lakes and rivers that need the infusion of 
water, which will make it extremely usable? I mean, there will 
be no contaminants in it. Have we looked at that? Is anybody 
aware of what is happening, to put it all together and say, we 
need to work on water marketing that includes not only the 
cleaning, the storage, the recycling, all of these different 
things? How do we package this and is it important for us to 
know that you are looking at it and how we can address it?
    And to Mr. Cook, the Upper Basin, again, with Title 16, can 
we get some support for California's, given that we are doing 
all these different things to try to cut the use of water, for 
the funding for these projects? Gentlemen?
    Mr. Hall. Would you like me to respond first, Mr. Cook?
    Mrs. Napolitano. Yes.
    Mr. Hall. I think you have hit on it Congresswoman. We do 
need to package this combined water treatment, water marketing, 
and water supply and water quality in one package, and I have 
to say, although it has got its problems, CALFED has done a 
pretty good job of doing that. The Santa Anna Watershed Project 
Authority has done something for its own area of the State that 
is entirely consistent with, compatible with what CALFED has 
produced.
    So I think those are two examples of thinking along those 
very lines. I want to give you one more that is very recent. 
Orange County Water District and Orange County Sanitation 
District just signed a major agreement to reclaim hundreds of 
thousands of acre feet of water, put them in the groundwater 
basin for storage, hitting on the concept that Congresswoman 
Solis mentioned, to make that water available. It is not going 
to the ocean, it is going into the ground. We will reuse it. It 
does take advantage of nature's natural filtering mechanism to 
accomplish that.
    That is the kind of measure that I think we can take to 
reduce our demands on the bay delta system and to reduce our 
demands on the Colorado, and I want to agree with Mr. Cook. If 
the operating criteria and guidelines had not been established, 
California would be worse off, not better off. So we support 
that. And like you, I hope, in return, Mr. Cook will support 
funding for Title 16.
    Mr. Cook. Well, obviously, I cannot speak for the 
Congressional delegations of the Upper Basin States, but I 
suspect to the extent that those projects make economic sense 
that they surely would not object to them and perhaps would 
support them.
    Mrs. Napolitano. I would appreciate any advice that you can 
so that we can become successful, because I think it is going 
to be on all of us to work together to make it happen.
    Mr. Cook. Obviously, and we agree. That is where we have 
been for quite some time now in terms of the other Basin 
States.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentlelady.
    Mr. Radanovich?
    Mr. Radanovich. Thank you, Mr. Chairman.
    Mr. Hall, in your delivery capacity charts, you have shown 
that since the implementation of CVPIA in 1992 that there has 
been water taken from a finite source that went to the 
environment. Where was it taken away from during that period?
    Mr. Hall. Most of it was taken away from contractors south 
of the delta, downstream of the delta. In the Central Valley 
Project Service Area, some of it was taken from the State Water 
Project Service Area. And there were a few others who lost 
water, but most of it was taken from those two contractor 
groups.
    Mr. Radanovich. Is it safe to say that those groups have 
been in a shortage situation since that time?
    Mr. Hall. In particular, the San Luis Unit of the Central 
Valley Project has been critically short of water since then.
    Mr. Radanovich. I notice in your other chart where you 
showed the funding dedicated to environmental restoration, 
showed the skyrocketing amounts going toward environmental 
restoration, you forgot to show the chart that showed the 
skyrocketing sums of money going to increased water storage. 
Did you intentionally leave that out or what is the deal?
    Mr. Hall. Well, that has not happened yet, and really, that 
is what we are here for, is to urge Congress to consider as a 
part of this authorization ramping up the investment in our 
water infrastructure, not just storage, but the other measures 
on that next-to-last chart. If we make those investments, we 
can bring into balance our supply and demand. If we do not, we 
cannot.
    Mr. Radanovich. And I feel comfortable that we are 
beginning to address those long-term needs. I guess the point 
that I want to make is that since 1995, certain segments of 
California have been facing water shortages and it is going to 
be a while before long-term water increases are made available 
to the public, and I am glad that we are finally making 
investments to do that, but what about regulatory relief on the 
short term for those that are already suffering, have been 
suffering, and will, God forbid that we get into another series 
of droughts?
    Mr. Hall. Well, there are some measures that do clearly 
need to be taken. The record of decision called for certain 
actions to be taken to improve the flexibility in the way the 
regulatory requirements work, particularly with respect to the 
Endangered Species Act. But there are some ambiguities in the 
record of decision which we believe Congress could help 
clarify.
    For instance, a wonderful concept was developed in the 
record of decision, and that is that you would have the 
regulatory agencies essentially acquire from willing sellers a 
certain block of water. In this case, it is 180,000 acre feet 
annually. That water would be dedicated to meet the needs of 
endangered species instead of taking it from project users on a 
non-voluntary, uncompensated basis. It is a great concept. The 
concept was to provide assurances to those water users that 
their water would not be taken instead.
    However, what is left unclear is what the priority would be 
for that water in that what we call environmental water 
account. Is it primarily to make sure that you avoid jeopardy 
for listed species? We believe that is the intended purpose. 
But the Fish and Wildlife Service is now saying,``well, we are 
not so sure. We may want to use it for something else.'' And 
frankly, that completely undoes the assurances that we believe 
were part and parcel of the record of decision.
    So I believe that is the sort of issue that does need to be 
addressed so that we not only make the investment, we know that 
the investments will lead to balanced outcomes. We do not want 
to try to rewrite the Endangered Species Act or the Central 
Valley Project Improvement Act. We do think that the record of 
decision in some areas, it does need to be clarified so that, 
again, we all know what the rules of the road are.
    Mr. Radanovich. So in your opinion--you mentioned the 
Endangered Species Act and CVPIA, which is the main regulatory 
authority on the distribution of water. Do you think that there 
is enough leeway in both those laws to get us through a water 
shortage if they are done correctly administratively or do you 
think that there is going to need to be a change in those laws 
in order to accommodate people in the short term before we get 
long-term water storage?
    Mr. Hall. I think we need two things. We need the 
investments that I have called for and we need the discretion 
that the regulatory agencies have under existing law to be 
exercised in a way that minimizes the amount of water taken 
from water users in order to accomplish the necessary 
environmental purposes. Right now, that is not being done.
    Mr. Radanovich. All right. Thank you.
    Mr. Calvert. Mr. Dooley, any additional questions?
    Mr. Dooley. No.
    Mr. Calvert. I have one question. We mentioned clearing 
some things up and Mr. Radanovich did an excellent job of 
bringing this out, also, but do you think it is inconsistent 
with the ROD to also have more specific language in regards to 
storage, because there apparently is a perception that more 
attention is brought toward the environmental side of this than 
there is on the storage side of this. This is a balance, as you 
know, around here in trying to balance the needs of the 
environment to the needs of additional water and certainly 
storage is a part of that. Do you think there are any 
inconsistencies in having language in any potential legislation 
pointing that out?
    Mr. Hall. That storage is going to be part of the plan?
    Mr. Calvert. Well, more specific language in stating that 
the storage is going to be built.
    Mr. Hall. I would not rely solely on my opinion. I am 
relying on the people who actually wrote the record of decision 
and they tell me it was their clear intent that additional 
surface and groundwater storage would be part of this plan.
    Mr. Calvert. So it is not inconsistent for us to--
    Mr. Hall. I do not believe so.
    Mr. Calvert. Great. That was what I wanted to hear. Any 
other additional questions?
    [No response.]
    Mr. Calvert. One more question for Mr. Cook, another issue 
but certainly something to do with the Colorado River. How are 
the lower lake levels at Glen Canyon Dam and Hoover Dam going 
to affect power generation this summer?
    Mr. Cook. They will not be down a great deal this year. 
Water supplies from the Upper Basin, again, like in California, 
are not very good. We are looking at forecasts in the 80 
percent. It will drop Lake Powell some. Lake Mead's demands 
will drop it some this year, too.
    I suspect that, at least out of Lake Powell, the power 
capability at Lake Powell is constrained as much by the Grand 
Canyon Protection Act and the work that has been done there for 
environmental purposes. About a third of its capacity is 
currently not available except under emergency measures. Lake 
Powell is only down about 25 feet now, and so it is still 
fairly capable of developing--
    Mr. Calvert. Well, we may have some emergency measures this 
summer.
    Mr. Cook. You have been doing that, and I think we have 
responded when we can.
    Mr. Calvert. I appreciate that. Are there any additional 
questions for this panel? Mr. Ose?
    Mr. Ose. Thank you, Mr. Chairman.
    With the price of power in California, recognizing that the 
Bureau in many cases generates its own, does Congress need to 
prepare itself for additional funding being provided to the 
Bureau for pumping purposes? Do either of you have any input on 
that, within the CVP?
    Mr. Hall. First of all, I would invite you to talk to the 
Bureau. I do not know what they have done to amend their 
budgets. They do buy power and generate power. They buy a lot 
of their power from WAPA, which is not an investor-owned 
utility, and they generate some of their own.
    I guess what I would like to see Congress take a look at is 
whether we are maximizing the use of the hydroelectric 
facilities that the Bureau owns and operates and are we doing 
as much as we can, again, to balance the needs of fisheries 
with human needs, not just for water but for power. Again, I am 
not trying to shortchange the fish. I just want to make sure we 
are making maximum use of these assets for both environmental 
and human purposes. I am not sure today that we are.
    Mr. Ose. But you do not have any information about the 
relative lack or surplus funding that the Bureau may have right 
now due to power?
    Mr. Hall. We can certainly get it and provide it to you, 
but I do not have it today.
    Mr. Ose. Thank you. Thank you, Mr. Chairman.
    And for our last question, Mrs. Napolitano.
    Mrs. Napolitano. Right along the same line that my 
colleague was talking about is who do you think, or how can we 
pay for this new water infrastructure? What would be the ideal 
way that we should start looking at, because it is going to 
cost money. It is not going to be free. That is one question. 
The other one is, talking about the question you just answered, 
it seems to me I just read that even though some of the lakes 
where the salmon fisheries are, that even though the water is 
down, there is a record number of hatchlings or fingerlings or 
whatever you call them? They have increased for some reason?
    Mr. Hall. There are very healthy counts of both in-
migrating and out-migrating salmon in the Sacramento main stem 
and its main tributaries today.
    Mrs. Napolitano. Is that not unusual? I mean, normally, you 
would think that you would be losing some of that reproductive 
process.
    Mr. Hall. Well, we have had six wet years. We have invested 
a lot in the ecosystem. We have curtailed pumping 
substantially. All of those things are supposed to help fish 
and it appears they are.
    Mrs. Napolitano. What would you think would be the ideal 
way to make sure that these new projects in this new water 
infrastructure can be addressed financially?
    Mr. Hall. Well, I think what works best is a partnership at 
the Federal, State, and local level. I am not prepared to say 
what the cost sharing should be among the various parties 
because a lot of that depends on how the project is used. Some 
of the projects will be almost entirely environmental benefits. 
Some of them will be almost entirely water user benefits. Those 
cost shares should be different.
    I will say this. I think every project ought to mitigate 
its own impacts, but only its own impacts, and too often, there 
are various stresses on the system that are not accounted for 
and so all of the impact mitigation is placed on the project, 
the water project.
    Well, in the Bay Delta Estuary, we have a lot of stress on 
fish. Some of that comes from invasive species. There are a lot 
of species that are not native to those waters that have moved 
in through a variety of means. They are predators to the fish 
that are endangered or they compete for food or they just 
compete for habitat. They have had a tremendous impact. In 
fact, some ecologists think they have had more impact than any 
other single factor. That is not accounted for. Pollution is 
not accounted for. Over-fishing is not accounted for. Every 
time there is a mitigation requirement, it is on water 
projects.
    Frankly, that is not appropriate, because what happens is 
on those water users, it has placed the entire burden for 
mitigating for all of those impacts and for meeting the 
requirements of the Endangered Species Act. The Endangered 
Species Act provides broad societal benefits through the 
preservation of species. The costs for that preservation should 
be broadly shared.
    So whatever test, whatever cost-sharing formula is created, 
in our view, it has to meet the test of, is it fair to place 
all of the burden on a few water users or should broad societal 
benefits be shared broadly in terms of their cost. We obviously 
believe they should be shared broadly.
    And what is going to happen is that you are going to take a 
lot of water that has been developed in previous years which is 
relatively inexpensive and you are going to replace that with 
high-cost water and then you are going to say, well, you water 
users are just going to have to pay the bill, when, in fact, 
that water has been reallocated to meet a broad societal 
benefit. I can tell you, we are going to argue very vigorously 
that we ought to mitigate the impacts that we create, but we 
ought not be responsible for anything beyond that.
    Mr. Calvert. Mr. Radanovich?
    Mr. Radanovich. One last quick question. Mr. Chairman, you 
had mentioned balance between three stakeholders, the way I see 
it, environmentalists and agriculture and urban water users in 
California, and I know back in 1995, when the first funding of 
CALFED began to originate, the idea was that no stakeholder 
would be pushed out or let out ahead too far of the other one 
in order to keep everybody on the same page in developing a 
California water plan. Can you tell me, though, Mr. Hall, what 
has been the proportion of funding between urban and ag and 
water since that time?
    Mr. Hall. You mean how much for water supply and quality 
versus the environment?
    Mr. Radanovich. Yes, or if we want to do it as simply as 
possible, a ratio between fish and people, which would lump up 
ag and urban together.
    Mr. Hall. It is clear that the Federal money, there was 
$430 million authorized and, I believe, $160 million 
appropriated, and the vast majority of that, virtually all of 
it, went to environmental projects. Now, I want to say, in 
fairness--
    Mr. Radanovich. But there were ancillary benefits to 
agriculture and urban users.
    Mr. Hall. Right, there were, no question about it. I mean, 
stabilizing the population helps. Plus, some of that money was 
invested in fish screens. Fish screens allow people to pump 
water without hurting the fish, so there is a multiple benefit 
there, no question about it. But all of that money, virtually, 
went to the environmental side. It is just that it did have 
some ancillary benefits.
    On the State side, there was a $1 billion bond issue in 
1996. That was an environmental bond issue. Again, some 
ancillary benefits. And last year, there was a $2 billion bond 
issue and that went for multiple things. It went for 
environmental work, it went for water reclamation and 
conservation, it went for local groundwater projects, it went 
for some improvements in the delta. It is much harder to sort 
out how much for water supply, how much for the environment. 
The bulk of it to date has been for environmental restoration.
    But I want to say something about that. I am glad that has 
happened, because if we had not done that work, I do not 
believe we would be even poised to make the investments that we 
are making today because those fish populations would have 
crashed. I firmly believe that. I am glad we did it, but we 
cannot stop there. If we do, we are going to be in water where 
we are in energy, and that is not just going to impact 
California, it is going to impact the entire West.
    Mr. Radanovich. And I think it is important for members to 
recognize that when we do get into additional funding, that the 
lion's share has been environmental funding up to this point 
and the focus does need to be on long-term storage.
    Mr. Calvert. I thank the gentleman.
    Mrs. Solis?
    Mrs. Solis. Thank you, Mr. Chairman.
    You touched on a sensitive nerve there for me in my 
district because we have obviously a problem with contaminated 
water in our area, a Superfund site out in the San Gabriel 
Valley. And when you talk about sharing the responsibility for 
cleanup, if a project comes in and begins the mitigation 
process and they find that there are other ancillary or other 
problems that have come about through other responsible 
parties, this has been an ongoing issue for us down there, in 
trying to make those responsible that have been identified by 
the Federal Government to come to the table. We have had 20 
years of litigation and we have yet to see any resolution.
    What would be a quick way, or I am sure you have put a lot 
of thought into this, that we could start to begin this process 
of providing relief, because as you say, this is a benefit for 
everyone down there? We are talking about over three million 
people in that area.
    Mr. Hall. I certainly believe in the concept that whoever 
is responsible for the contamination should bear that 
responsibility, though, as you point out, it is often extremely 
difficult to find them and to compel them to pay. In the 
meantime, you cannot let the resource be further degraded. I 
think both at the local and the State as well as at the Federal 
level, steps do need to be taken to provide the necessary 
cleanup and remediation of those contaminated sites, because if 
you do not, then it does not matter who is paying in the end, 
they are going to pay a lot more.
    So I guess I would advocate a two-prong strategy. Go after 
the responsible parties, but at the same time, do not wait 
until all those ``i''s are dotted and ``t''s crossed to start 
cleaning it up, because if you do, the mess is going to be a 
lot bigger.
    And the other thing is--forgive me for getting on my 
soapbox--I think Congress can do some things to stop cleanup 
before it starts. One of them is we need to stop using MTBE in 
California. We are polluting a lot of groundwater. We can meet 
Federal clean air standards without using it and we need to 
stop using it.
    Mrs. Solis. Thank you.
    Mr. Calvert. Thank you. We are not going to bring up 
ethanol.
    [Laughter.]
    Mr. Hall. I did not say, do not use ethanol. I just said, 
do not use MTBE.
    Mr. Calvert. No, that is kind of an inside joke up here on 
the Hill. Forgive us.
    Mr. Hall. I am pretty familiar with that joke, actually.
    Mr. Calvert. All right. We thank the first panel for your 
testimony and for answering our questions.
    Mr. Calvert. The second panel with us today is Ms. Sunne 
McPeak, President and CEO for Bay Area Council; Mr. Ryan 
Broddrick, Director of Conservation Programs for Ducks 
Unlimited; and Mr. Stuart Woolf, President of Woolf 
Enterprises.
    Ms. McPeak, once you get situated there, you may begin your 
testimony.

   STATEMENT OF SUNNE McPEAK, PRESIDENT AND CHIEF EXECUTIVE 
                   OFFICER, BAY AREA COUNCIL

    Ms. McPeak. Mr. Chairman, I am President of the Bay Area 
Council, a business-sponsored, CEO-led public policy 
organization that was established in 1945 to promote economic 
prosperity and quality of life in the region that includes nine 
counties that rim San Francisco Bay and the metropolitan cities 
of Oakland, San Francisco, and San Jose, including Silicon 
Valley. The economy of that region today is about $250 billion 
annually.
    The organization that I represent has been involved in 
California water policy issues for more than a decade and has 
closely followed the CALFED process since its inception and the 
signing of the Bay Delta Accord in 1994. I personally have been 
involved for about 28 years in California water politics and 
various water issues.
    We come here today to commend your leadership, your spirit 
of cooperation, and your commitment to moving forward, and to 
doing so with a focus on the future. We want to urge you to be 
a full partner in the implementation of solutions that came out 
of the CALFED process. A full partner is not only investing in 
funding, although I am going to emphasize that point, but it is 
moving ahead together with the Federal agencies as partners at 
the table and Members of Congress also fully engaged in the 
oversight of managing California's water resources, not just 
for California but for the nation as a whole.
    The bay area clearly has an economy that has been built on 
a very important and valuable ecosystem, the Bay Delta Estuary, 
but we also have joined with other employer organizations 
throughout California, and I attach to my testimony today a 
position paper that we had submitted 2 years ago that 
foreshadowed the solution for the CALFED program that was 
joined in by 15 organizations, some Statewide, some other 
regional in California, because we see our region connected to 
others in our State and to the nation as a whole.
    I guess the message that we would like to underscore is 
that it is time to move forward with the solutions. The 
solutions involve the full mix that you heard from Mr. Hall. We 
have actively and aggressively pursued efficient water use, 
conservation, and reclamation. We urge a robust water market. 
But we also respectfully have ardently supported and urge you 
to invest in the infrastructure, conveyance and storage.
    The mix is needed in order to be able to protect the 
environment as well as to ensure a continual prosperous 
economy. It is not possible in our State to be able to handle 
the differences in weather. The wet years and the dry years are 
often the abnormal rather than the normal that we sometimes 
talk to in statistics, and we have got to be able to have 
flexibility in the system. So we are here to urge the 
participation of Congress in that continuing partnership and to 
invest in storage, to invest in the conveyance facilities.
    We also had discussion on the last panel about groundwater 
storage or sometimes we would call it a dual-use or a mixture 
between storage that is surface and underground storage. May I 
suggest that oftentimes advocates for underground storage 
forget that it is a lot more difficult to get water into the 
ground and it takes a lot longer to do the recharge than it 
takes to collect it. In other words, we have precipitation 
rates that always exceed percolation rates, and so if you do 
not have the combination of surface storage, we cannot actually 
optimize groundwater storage.
    With that, we would be happy to answer questions as a part 
of the panel.
    Mr. Calvert. I thank the lady.
    [The prepared statement of Ms. McPeak follows:]

 Statement of Sunne Wright McPeak , President & CEO, Bay Area Council, 
                       San Francisco, California

    The Bay Area Council is a business- sponsored, CEO- led, public- 
policy organization founded in 1945 to promote economic prosperity and 
quality of life in the region. The Bay Area region encompasses the nine 
counties that rim San Francisco Bay and 100 cities, including Oakland, 
San Francisco and San Jose, the heart of Silicon Valley. The economy of 
the Bay Area is approaching $250 billion annually. The regional economy 
not only is dependent on an adequate supply of quality water to thrive, 
but also is closely linked to the environmental health of the Bay- 
Delta Ecosystem. As an association of major employers, the Bay Area 
Council has been involved in California water policy issues for more 
than a decade and since 1994 has been deeply engaged in the Bay- Delta 
CALFED process.
    The following points summarize the perspectives of the Bay Area 
Council as a regional organization of major employers with a history of 
involvement in California water policy.
     LCalifornia water policy is at a critical juncture. 
Decisions that are being made today about how to improve California's 
water infrastructure will having profound and lasting implications for 
the nation and the state, now the sixth largest economic power in the 
world.
     LWater policy decisions and the manner in which they are 
implemented will affect every resident and every business in 
California, which in turn has major implications for the national 
economy.
     LWhile we have come a long way over the last several years 
to craft an action plan to restore the critical hub of the state's 
water system, the Bay- Delta, we need investment to move that plan to 
reality.
     LThat is why the employers who are members of the Bay Area 
Council have invested in the development of the solutions and are now 
focusing authorize of the funds necessary to implement the solutions. 
We have joined with other business organizations in California to 
advance workable solutions. As an example, attached is a position 
statement issued in 1998 from employer organizations regarding the Bay- 
Delta CALFED program.
     LFollowing the prolonged drought of the late 80s and early 
90s, California businesses invested literally billions of dollars to 
increase their water efficiency, getting more production out of every 
gallon.
     LThose efforts have paid off tremendously. California 
water agencies now more people and more industries than in the early 
80s with almost the same amount of water. However, as the limits of 
efficiency from the current supply are approached, new investments must 
be made.
     LAs we know, permanent reductions in water usage that have 
been achieved through retrofitting industries with water efficient 
hardware lead to demand hardening. This means that conservation efforts 
in the future will not free up the additional water that will be needed 
to sustain a strong economy.
     LIronically, businesses that drive economic growth and 
productivity are among the most dependent on reliable, high quality 
water.
     LTo ensure that the economy continues to thrive, business 
needs a reliable, good quality supply of water. This is especially true 
in the high tech industry where variances in supply and quality can 
translate into more costs and a higher bottom line.
     LIt goes without saying that thriving businesses lead to 
more jobs which leads to a strong economy. Water is one of the key 
threads that holds those pieces together.
     LThe demand for jobs will only increase as California's 
population is estimated to reach 40 million by 2010 and almost 50 
million by 2020. The Bay Area is projected to generate more than 1 
million new jobs by 2020 and grow by perhaps as much as 1.4 million 
people.
     LLast year, the state and Federal Government and 
stakeholders, including the business community, supported the final 
plan to fix the Bay- Delta, California's major water infrastructure 
system. The plan is multi- faceted and calls for enormous investment in 
water quality and supply, as well as restoration of the environment.
     LSevere water shortages and economic impacts are predicted 
for California if the investments are not made now. In fact, it is 
likely that significant shortages and economic impacts will be 
experienced before all of the improvements and facilities included in 
the Bay- Delta plan can be completed and brought on line.
     LThe current energy crisis in California is a stark 
reminder of what can happen when investments are not made in 
infrastructure, resulting in deterioration of both capacity and 
flexibility to meet normal demand levels, not to mention the ability to 
respond in case of emergencies.
     LThe Bay- Delta program provides essential ingredients to 
rebuild the nation's water infrastructure in California. But 
significant financial resources will be needed at both the Federal and 
state level.
     LThe program calls for $1 billion to expand existing 
storage facilities and construct new ones. It includes $1 billion 
toward environmental and ecosystem restoration. Another $1 billion is 
earmarked to upgrade the aging water conveyance system. Improvements to 
drinking water quality for all water users is slated to receive $800 
million. Approximately $1 billion is earmarked for water conservation 
and reclamation programs.
     LThese investments are critical to drought proof 
California and to protect this vital economy.
     LA Federal funding authorization is pivotal to improving 
California's water infrastructure. Agreement last year on a plan of 
action signaled a new era of cooperation and water management that is 
historic. It is time to seize this opportunity and move forward. The 
Bay Area Council and major employers in the region join with business 
organizations throughout California in urging Congressional action to 
invest in the water infrastructure needed to support the nation's 
economy for the 21st Century.
                                 ______
                                 
    Mr. Calvert. Mr. Ryan Broddrick, you may begin your 
testimony.

STATEMENT OF RYAN BRODDRICK, DIRECTOR OF CONSERVATION PROGRAMS, 
                        DUCKS UNLIMITED

    Mr. Broddrick. Chairman Calvert, members of the 
Subcommittee, my name is Ryan Broddrick. I am the Director of 
Conservation Programs in California specifically for an 
initiative that is called the Valley Care Bay Care. That 
initiative focuses on the Central Valley of California. The 
Central Valley of California represents approximately 400 
miles, from Red Bluff to Bakersfield, approximately, consists 
of the Sacramento Valley, the delta, and the San Joaquin 
Valley.
    One of the issues that is critical to understand, Ducks 
Unlimited has been involved in the wetlands conservation 
business since 1937 and the focus in California over the last 
ten, 15, 20 years has been significant for the principal reason 
that 60 percent of the Pacific Flyway's total population of 
waterfowl resides at one point in their migration in the 
Central Valley of California, literally 100 percent of some 
populations of waterfowl, such as the Aleutian Canada goose, 
recently delisted from the Federal listing, 100 percent of the 
Pacific tule geese, 66 percent of the North American tundra 
swans, and 65 percent of North America's pintails.
    The point of one of the questions to me was, why is it 
important on a national basis to invest in the ecosystem of 
California? From Ducks Unlimited's viewpoint and from my 
personal experience, the ecosystem of California is obviously a 
system that has driven a tremendous economy, it has tremendous 
diversity, it has tremendous challenges as it relates to water 
supply and as it relates to population growth.
    For us to maintain essentially the contribution to the 
North American waterfowl populations that this nation agreed to 
under international treaty as well as developed in the North 
American Waterfowl Management Plan, and as Congress has 
supported financially through the North American Wetlands 
Conservation Act, we have to recognize that wetlands in 
California are highly managed and they are highly dependent 
upon managed irrigation systems. These are not the lowlands 
that happen to be non-economical from the standpoint of pumping 
water of. They are highly dependent in the Sacramento Valley on 
the rice culture. The rice farming in the Northern Sacramento 
Valley provides substantial wintering habitat. We are highly 
dependent upon the same irrigation system that provides water 
to farmers in the San Joaquin Valley is also the system that 
provides water to wildlife areas in one of the largest 
contiguous blocks of wetlands left in California.
    California in the Central Valley is meeting this obligation 
through the North American waterfowl populations with less than 
5 percent of its historic wetlands, a tremendous success story.
    The issues, as we look over the next ten to 20 years, the 
Central Valley is going to add approximately, if you can 
believe the projections, 12 million additional people. The 
demand on resources, whether it be transportation, flood 
control, water supply, is going to be very substantial. Your 
investment in the development of management of water and 
management of lands and innovation and how we do that, applying 
some of the best management practices that have been developed 
for agriculture in the context of wetlands, be sure that the 
fish passage that we develop and the flows for fisheries, I 
think, have been very substantial.
    Our interest at Ducks Unlimited has been very specifically 
making sure that salmon restoration was done in a fashion that 
ensured the recovery of salmon, but also provided a reliable 
supply for the adjoining lands that oftentimes are seasonally 
flooded that provide support to waterfowl, but more importantly 
or as importantly provide the terrestrial habitat to hundreds 
of other species, many of which are threatened or endangered.
    So the reality is the ecosystem in California is a 
landscape improvement. It has to be done in concert with all 
the beneficiaries of the water system. It has a history of 
obviously having a chance for conflict. There are great 
opportunities. It is a good national investment. Lots of 
imagination, energy, and local money can go into the solutions 
and we look forward to the opportunity to doing that. Thank 
you.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Broddrick follows:]

 Statement of Ryan Broddrick, Director of Conservation Programs, Ducks 
                            Unlimited, Inc.

    Good afternoon, Mr. Chairman and Members of the Subcommittee. On 
behalf of Ducks Unlimited, Inc., the world's leading wetlands and 
waterfowl conservation organization, thank you for the opportunity to 
address the question of why it is important to direct private, state 
and Federal resources towards improving the ecosystems in the State of 
California.
    Since 1937, the mission of Ducks Unlimited has been to fulfill the 
annual life cycle of the needs of North American waterfowl by 
protecting, enhancing, restoring and managing important wetlands and 
associated uplands. To accomplish this mission it has been helpful to 
form alliances with a variety of public and private partners. Over the 
last 10 years in California it has been increasingly important to find 
opportunities to accomplish our mission for waterfowl within the 
broader context of improving the ecosystem overall. Our approach has 
been to focus on practical cooperative solutions to conservation 
challenges.
    California, specifically the Central Valley, is one of the most 
important wintering waterfowl areas in the Pacific Flyway with up to 60 
percent of the total duck and goose population using the Central Valley 
during their annual migration. The Central Valley consists of the 
Sacramento Valley in the north and the San Joaquin Valley in the South. 
The Valley extends approximately 400 miles from Red Bluff in the north 
to Bakersfield in the South. As an illustration of how unique 
California's role is in the Pacific Flyway, consider that in an average 
year, the Central Valley supports 100 percent of the world's population 
of Aleutian Canada Geese; 100 per cent of the Pacific Tule Geese; 66 
percent of North America's Tundra Swans; and, 65 percent of North 
America's pintails.
    The Central Valley is providing this nationally significant role in 
support of continental waterfowl populations with only a fraction of 
the historic wetlands, two thirds of which are privately owned, and 
dependent upon large acreages of rice and other grain crops that 
provide significant habitat value during the winter migration. The 
wetland, riparian, upland, and agricultural lands that provide habitat 
for waterfowl, also provide essential habitats for hundreds of other 
wetland dependent plant and animal species, supporting over 50 percent 
of California's threatened and endangered species during some stage of 
their life cycle. Accomplishments to date are quite remarkable, but 
that success is tenuous.
    Projections for growth in the Central Valley approach 12 million 
new residents over the next 20 years, placing tremendous demands on 
natural resources. Demand for additional water supplies, improved flood 
control, housing, transportation, conversion of agricultural lands, and 
changes in crop selection will provide significant challenges to 
maintaining a healthy and diverse ecosystem.
    In a recent survey conducted by the Public Policy Institute of 
California in collaboration with the Great Valley Center, 81 percent of 
respondents indicated support for, preserving wetlands, rivers, and 
environmentally sensitive areas. To capitalize on this support, as well 
as meeting the obligations established in various local, state, and 
Federal laws, we must approach our opportunities for sustainable 
growth, economic vitality, and ecosystem restoration as interrelated 
and interdependent.
    The Central Valley does not represent the full spectrum of 
ecosystem improvement opportunities that exist in California, yet it is 
illustrative of how dynamic and adaptable solutions must become. The 
Sacramento Valley drains to the south, while the San Joaquin drains to 
the north, both converging in the Delta where the waters combine before 
flowing to the San Francisco Bay. The natural hydrology of the Central 
Valley has been dramatically altered by water development. That water 
development has fueled economic growth of national significance. To 
maintain those benefits the investment in ecosystem improvement must be 
continued. However, the Central Valley is highly dependent upon the 
availability of managed water. As demand for water grows and historical 
uses are modified to meet emerging urban, agricultural, and 
environmental needs, great care must be taken to insure we do not 
unconsciously trade one ecosystem or economic improvement at the 
expense of another.
    My experience, to date, indicates that the public in California has 
recognized the interrelated and interdependent relationship with a 
history of support for various propositions and initiatives that have 
directed billions of dollars into the protection and restoration of 
wildlife resources, while at the same time supporting investment in 
infrastructure to maintain and build economic vitality. The dynamics of 
support for both ecosystem health and economic growth has forged 
interest-based alliances that bring remarkable resources to focus on 
conflicts that have persisted for decades. Private landowners in 
California remain the backbone of wetland ownership providing 
stewardship to two-thirds of the remaining wetlands of the Central 
Valley. Through Ducks Unlimited, Inc. and other conservation 
organizations, millions of dollars are generated through grassroots 
fundraising, foundations, trusts, and grants to improve various 
habitats and invest in research.
    Ducks Unlimited believes that wetland conservation in the west is a 
race against time and that the next 10 years will significantly 
determine if the North American Waterfowl Management Plan population 
objectives will become a reality. In recognition of this limited window 
of opportunity, Ducks Unlimited will be initiating major new 
fundraising efforts in support of the Pacific Northwest and California 
Central Valley/S. F. Bay.
    California has great potential to improve ecosystems for a variety 
of reasons that include not only the diversity and resiliency of its 
natural resources, but also the history of diverse public/private 
partnerships. We believe precedent exists to show that improving 
ecosystems in complex environments such as California, are of national 
concern and can aid with resolution of similar problems elsewhere in 
the nation.
                                 S6602_
                                 
    [A chart included in Mr. Broddrick's statement follows:]
    [GRAPHIC] [TIFF OMITTED] T1508.008
    
    Mr. Calvert. Mr. Woolf?

    STATEMENT OF STUART WOOLF, PRESIDENT, WOOLF ENTERPRISES

    Mr. Woolf. Mr. Chairman, members of the Subcommittee, my 
name is Stuart Woolf. I am the President and CEO of a family 
farming operation in Western Fresno County. Our operation grows 
a diversity of crops and we have also integrated into some food 
processing businesses, including a tomato processing plant 
known as Los Gatos Tomato Products, and almond processing, 
known as Harris Woolf California Almonds.
    I want to speak for just a moment about the value of 
California agriculture to this nation. California represents 
less than 3 percent of this nation's harvest cropland. It 
receives less than 3 percent of USDA program support payments, 
and yet it generates about 13 percent of the Nation's gross 
farm product. It also generates a like amount of the Nation's 
net farm exports. The costs of farming in California are 
slightly higher, so it only represents about 12 percent of the 
Nation's net farm income. California agriculture is a great 
investment.
    As California's success is due in great part to it's God-
given resource of extremely fertile land. Most of the state's 
farmland rank in class one or class two soil classifications. 
They are very productive. We also enjoy long hot summers, with 
a Mediterranean climate. Harvest seasons are longer, our yields 
are higher than most anywhere else in the world. We can grow 
over 250 different crops in the State. The long summer also 
allow for a very efficient and productive processing industry. 
We can run our processing facilities longer than they can 
anywhere else in the world.
    With that said, I would like just to comment briefly on our 
own operation and offer it as an illustration as to what some 
of these advantages may look like. Currently on our ranch, we 
are growing more tomatoes than Australia. This past year, we 
grew over 400,000 raw tons. Our neighbors grew a like amount. 
We ran the fruit through an energy-intensive tomato processing 
facility. Our yields are typically twice that of our foreign 
counterparts, and we do this using less natural resources than 
virtually anywhere else. Once we harvest the tomatoes and send 
them through our plant, we capture the water that is in the 
tomato and recycle it. The same yields and efficiencies can be 
found in the other crops we grow.
    Considering these strengths, I have been very optimistic 
about the growth of our business. Over the past 10 years, we 
have grown our business tenfold. We did it internally, without 
buying other businesses. And yet today, as I look out to our 
future, I do not know that I can keep investing given the risk 
of unreliable energy and water.
    As it relates to water, I can assure you that the water 
being used within the Valley is generating a great return from 
agriculture. Given the fact that we are receiving less water at 
a higher cost, we have been forced to be far more efficient 
than we ever thought we could be. Today's issue is whether or 
not we will be able to have a reliable and affordable source in 
the future. I can be the most efficient grower in the world, 
and yet if I do not have access to the basic resources required 
to farm, it really makes no difference.
    So today, I am trying to make decisions about my company's 
future based upon the State and Federal Government's commitment 
to infrastructure. I strongly encourage you to consider the 
value of California agriculture and its dependence upon basic 
resources. Thank you.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Woolf follows:]

     Statement of Stuart Woolf, President & CEO, Woolf Enterprises

    Chairman Calvert and members of the Subcommittee, I would like to 
thank you for the opportunity to testify on behalf of the many farmers 
in California and the United States who feed and clothe our families 
and provide the people of our world with safe and affordable food and 
fiber products.
History of the Woolf Family
    I grew up on the west side of the San Joaquin Valley, in the midst 
of a large farming operation. My father, Jack Woolf began his career 
shortly after World War II as the general manager of Giffen Inc., a 
pioneer farming operation owned by Russell Giffen. At its peak, Giffen 
Inc. farmed more than 120,000 acres in the area. My brothers and 
sisters and I quickly became an integral part of west-side agriculture.
    Federal Reclamation Law came to the Westlands Water District 
service area in the early 1960's. As part of the contract offered by 
the United States to provide water and drainage service to these lands, 
Mr. Giffen entered into an agreement to sell his landholdings after 10 
years of receiving Federal water benefits. Giffen Inc. was ultimately 
sold to over 50 family farmers seeking to become part of the 
development of the arid west. My father acquired land from Mr. Giffen 
in 1974 and began farming on the basis and commitment of a 40-year 
contract for a reliable surface water supply from the Federal Central 
Valley Project.
    As a farmer in a Federal reclamation water district, we are limited 
to the number of acres we can own and farm with Federal project water. 
In some cases, such as the Giffen Inc. situation, lands must be sold at 
Bureau of Reclamation-approved price levels. These restrictions were 
embraced on the promise of reliable water supplies, completed water 
distribution systems, and drainage service. However, today we attempt 
to farm with inadequate water supplies, no drainage service and the 
debt associated with on-farm water distribution systems that were 
financed with our own dollars when the United States failed to meet its 
contractual commitments.
    My three brothers, two sisters and I are shareholders in Woolf 
Enterprises, a collection of family operations. Our interests include 
landholdings in western Fresno and Madera counties; Los Gatos Tomato 
Products, one of California's largest bulk tomato paste processing 
plants; Harris Woolf Almond, an almond processing and marketing 
company; Huron Cotton Ginning Co.; and Cal-West Rain, a drip-irrigation 
equipment company. We employ over 560 people each year, 139 full-time 
and 424 seasonal, and are actively involved in the community of the
The Woolf Mission
    The mission of the Woolf operation is to be known as ``The Best Ag 
Resources Managers.'' Virtually every decision made in our operation is 
measured against this objective. As one of many, many farmers in this 
country, we are challenged to manage land, make water use decisions, 
employ a workforce, and apply inputs to our landholdings that meet this 
objective. Farming requires a great deal of resources--each year the 
Woolf farming entity uses surface water, groundwater and market 
transfers to meet the crop water requirements, applies over 1 million 
labor hours, and over 224,000 decatherms of natural gas and 9.3 
megawatts of electricity for groundwater production. Los Gatos Tomato 
Products uses over 1 million decatherms of natural gas during the 
annual tomato processing season, which runs from July 1 to September 
30. Harris Woolf Almond uses over 1 million kilowatts of electricity 
each season. In today's agricultural economy, utilization of these high 
cost inputs must be done with a high commitment to efficiency.
    I believe that we, as one of the nation's farmers, are the ultimate 
stewards of this country's natural resources. We care about soil 
quality and invest dollars and sweat to improve the productivity of our 
lands; we care about efficient water use and take the necessary steps 
to assure maximum applied water efficiency; and our trees and vines 
produce clean air by scrubbing carbon dioxide from the atmosphere and 
converting it to oxygen. We have installed high-cost drip irrigation 
technology on more than one-fourth of our landholdings, employ laser-
leveling to the majority of our ranch, and utilize global positioning 
satellite technology on our field equipment to reduce capital, fuel and 
labor costs and allow us to work over installed drip equipment without 
damaging it. A prerequisite of successfully farming in California and 
the rest of the nation is to ``do more with less'' and we are truly 
committed to this objective.
The Significance of California Agriculture
    My family grows almonds, pistachios, processing tomatoes, Pima 
cotton, wine grapes, garlic, lettuce, and onions, contributing to the 
$3 billion dollar gross annual farm income of Fresno County, the number 
one ag-producing county in the United States. Our neighbors, Kings, 
Tulare, and Kern Counties, typically rank in the top five in the nation 
each year. The San Joaquin Valley of California, where all of these 
counties are located, is truly the fertile valley of the United States, 
serving to feed not only Californians, but all of our neighbors and 
fellow citizens throughout the country, as well as a few hundred 
million people world wide.
    We are a member of a very large family, California's farmers, who 
in 1998 produced $27.7 million in total farm income, approximately 13 
percent of the total ag production of the United States. This gross 
farm income multiples through the state and national economies, 
generating sales and income taxes that support social programs and 
county services, and provide key revenues to the state and Federal 
budgets. These dollars multiply through the economy over 2.5 times, 
generating nearly $80 billion in gross state and national product each 
year.
    Expansion of the California population will present more challenges 
to our state and Federal political leaders. Urban encroachment 
continues to whittle away at prime farmlands. In California between 
1988 and 1998, about 166,000 acres of cropland (1.5 percent of total 
cropland) were converted to urban and build-up uses. This conversion 
will continue to occur at ever-increasing rates, challenging the 
remaining farmers to produce more with less and our political leaders 
to develop Federal policies that maintain our diverse and high quality 
food supply.
    If there are any questions about the significance of California 
agriculture and it's effects on the nation's food supply and ag 
economy, consider these facts from the California Department of Food 
and Agriculture:
     LFor more than 50 consecutive years, California has been 
the number one food and agricultural producer in the United States.
     LCalifornia produces 350 different crops and commodities. 
Products exclusively (99 percent or more) grown in California include 
almonds, artichokes, dates, figs, kiwifruit, olives, persimmons, cling 
peaches, pomegranates, pistachios, prunes, raisins, clovers, and 
walnuts.
     LNearly 1 in 10 jobs in California are ag-related.
     LCalifornia exports in 1997 totaled $6.7 billion, about 20 
percent of the total California ag production and about 13 percent of 
the total United States ag export.
     LLeading exports for California commodities include 
cotton, almonds, wine, table grapes, and oranges; destined for Japan, 
Canada, Hong Kong, South Korea, Germany and the UK.
    But California does not stand alone. Farmers in the other top-
producing agriculture states of Texas, Iowa, Nebraska, Illinois and 
throughout the country are all key contributors to the national 
economy. Years ago, our political leaders recognized that a safe and 
independently produced food supply was critical to our success. Farm 
support and land reclamation programs have contributed to our 
independence and productivity as a nation. These programs have focused 
on the needs and benefits of various regions in our country. Land 
reclamation has developed the arid western states into a widely 
diversified agricultural machine. Commodity supports have served to 
protect and maintain the corn, soybean and grain-producing engine of 
the central states. These programs have been among the greatest 
investments of the American people, by generating huge economic 
productivity many times greater than the Federal support.
Impacts of Water Supply Uncertainty
    Unfortunately, this economic engine can only run with adequate 
water supplies. The current energy crisis highlights the impact of 
shortages in basic resources on the citizens and businesses of this 
country. Water supply uncertainty has the same impact and has plagued 
the Woolf operation and other farmers in California. In 2001 we will 
fallow approximately 20 percent of our total landholdings due to 
inadequate water supplies from the Federal Central Valley Project. With 
adequate water supplies, these lands are capable of generating 
additional gross farm income. Without adequate water supply, these 
lands present our operation with annual carrying costs of nearly $300 
per acre, with little or no opportunity to generate income.
    The rapid decline of CVP and State Water Project water supply 
reliability is forcing many farmers in California to idle land and sell 
water supplies to cover a portion of their annual debt. A conservative 
estimate is approximately 20 percent of the ag land in the CVP export 
service area will be fallowed in 2001, despite average rainfall 
conditions and above normal water storage throughout the State. While 
it remains to be seen how much we can mitigate this massive fallowing, 
we can certainly expect a large negative impact on the California ag 
and national economy.
    Looking forward, we are very concerned about our ability to sustain 
our historical operating levels. If water supplies are inadequate today 
in normal to above-normal conditions, what will happen when we enter 
the inevitable drought? Who will have the ability to survive? What will 
be the impact to local communities, the State and national economies?
    The answers to these questions depend on the ability of our Federal 
and state legislators to develop balanced and effective policies in the 
critical arenas of water and energy resource management. We are all 
here today because we recognize the opportunity to address matters of 
national significance. If balanced resource management policies can be 
developed and implemented, then California agriculture will survive. If 
equitable and sustaining policies can not be developed, then a large 
part of the United States'' food producing capabilities will be lost.
    In 1994, we embraced the Secretary Babbitt/Governor Wilson Bay-
Delta Accord because it promised interim stability and a program, later 
titled CALFED, that would restore balance to the regulatory decision-
making process and establish hope for future water supply improvements 
through increased water storage and conveyance capacity. CALFED became 
our hope, our promise that things would ultimately get better.
    Today, we remain convinced that CALFED is the best opportunity for 
Californians, and particularly its farmers, to regain the critical 
level of water supply stability to maintain our unique and high level 
of ag productivity. However, if CALFED is to succeed, Congress must 
take legislative action to authorize this program and establish basic 
guiding principles and direction for the current and future 
administrations. These principles must restore balance to the 
implementation of regulatory actions and environmental restoration 
programs. Congress must provide direction that balance and preservation 
of our agricultural economy is a critical component of national 
resource management policy.
Conclusion
    The basis of every great society is a strong commitment to 
agriculture. Over the years, our political leaders have recognized the 
importance of a safe and affordable food supply to the American people. 
Farmers have been provided the tools and supports to lead the United 
States to the highest standard of living and the safest and most 
diverse food supply of any country in the world. Our economic diversity 
and productivity starts at the farm - The successes of America's 
farmers has allowed millions of American citizens to pursue careers 
outside of agriculture instead of growing their own food supply.
    The productivity of the California farmer has played a key role in 
allowing the United States to achieve a strong position in 
international trade, contributing food products to other countries, 
strengthening the American dollar, and allowing affordable access to 
foreign commodities critical to the US economy. In order to maintain 
these incredibly high standards and accomplishments, we have reached a 
point where our legislators must reconfirm our nation's commitment to 
agriculture and provide the appropriate policy direction, program 
authorization, and funding.
    It is very clear that California agriculture is critical to the 
nation, in terms of food production, safety, economic strength, and 
international trade. This is a resource that we must protect.
    I appreciate the opportunity to testify before you today and stand 
ready, as one of millions of farmers in the nation, to assist you in 
preserving a very important segment of our economy.
                                 ______
                                 
    Mr. Calvert. Ms. McPeak, could you describe for us how the 
recent power crisis and the issue of future water supplies have 
affected the business climate in California, both now and as 
businesses look at future plans to expand or to do business in 
California?
    Ms. McPeak. Both the power crisis and the prospect of 
unreliable water supplies threaten continued investment. The 
power crisis has reminded us why we are here talking about 
water. We want to invest in the infrastructure when we have the 
opportunity to do so.
    Let me talk about just the power shortage and the quality 
of power availability problem for a moment. We have 
experienced, as has the rest of the State, rolling blackouts, 
and when high-tech manufacturing has a 60th of a second 
interruption, the whole plant will go down. It will be offline 
for maybe 4 hours at a time, but that is multi-million dollars 
lost. That kind of an experience has caused companies to 
publicly announce they will no longer invest in California. 
They will no longer invest in the Bay Area, but they are 
talking about the entire California.
    Mr. Calvert. Specifically, that was Intel Corporation?
    Ms. McPeak. Intel. I mean, Peg Barrett announced at our 
annual outlook conference on January 12 that he will no longer 
invest and he referenced the State as a third world country, 
because that is what he in his plants, if they are abroad, have 
to face in countries that are not as developed.
    The under-investment in our water infrastructure has a 
similar parallel, which is it is very unstabilizing, 
destabilizing, to not have access to a quality, reliable water 
supply.
    Mr. Calvert. Is it accurate to say, just to add in here, I 
talked to a lot of CEOs of various companies in California, 
that they look at the future of the infrastructure in 
California, whether it is transportation, water, or other 
infrastructure needs, certainly electricity, and they look at 
the prospects of that being fixed or not fixed and then make 
those decisions with, quite frankly, being responsible to their 
stockholders and the people who invest in their companies. And 
so if they do not see that, then they make decisions like Intel 
and Sun Microsystems and others to no longer do business in 
California. Is that basically what you see happening right now?
    Ms. McPeak. Yes. Certainly the looking at whether or not to 
continue to invest is a question that all of the companies are 
facing.
    Mr. Calvert. Certainly, you mentioned not only the quantity 
of water and electricity but also the quality. The water 
quality that is utilized in the manufacturing process has to be 
of a high quality, is that not also correct?
    Ms. McPeak. That is correct.
    Mr. Calvert. You mentioned by 2020, there will be 1.4 
million new jobs in the Bay Area.
    Ms. McPeak. I did in my testimony, written testimony.
    Mr. Calvert. Right. How are you anticipating to meet the 
water demand of this new growth?
    Ms. McPeak. We are supporting the implementation of the 
CALFED solution, so it is possible to meet not only those needs 
in the Bay Area but all of California by the combination of 
tools that we have already discussed here today.
    Mr. Calvert. That also includes expansion of the Los 
Vaqueros reservoir?
    Ms. McPeak. Los Vaqueros Reservoir is one of those projects 
that is identified in the record of decision that could be 
expanded. I will just say to you that I supported that facility 
in 1988 when it was before the voters and I advocated that it 
be three times as big then.
    Now, there is also a regional dimension. The topic of this 
discussion is the regional perspective. Part of the CALFED 
program is that the regions themselves also are partners in the 
solution, and so there is a cooperation among the large water 
agencies within the Bay Area to look at blending and 
cooperation in a way they have not before, and part of that may 
very well be a partnership around the expansion of Los 
Vaqueros.
    Mr. Calvert. Mr. Broddrick, many of the programs, 
environmental programs specifically, are sometimes quite 
expensive and some members are concerned about the costs, 
especially indirect costs, are falling disproportionately on 
agriculture. How can the funding of these conservation programs 
be distributed fairly among the beneficiaries? That was brought 
up by Mr. Hall, also. What kind of method would you suggest to 
do that?
    Mr. Broddrick. That is a difficult question. I think the 
foundation--I am not going to give you a formula, because 
unfortunately, I do not know the one that would be durable. I 
think the allocation of the funding as it related to the $160 
million that, to a large degree, went to what you could 
identify as environmental benefits. Steve Hall referenced the 
fact that a lot of those were screening of agricultural 
diversions, and I think that in identifying the priorities for 
that screening, in part, the allocation there was, let us go to 
those screens that we know have the largest entrainment of 
fish. Let us go to those screens and have a variety of partners 
involved, both a landowner and organizations such as Ducks 
Unlimited, where we know that the water that goes through that 
screen has multiple benefits. It was having significant 
benefits to agricultural interests. It was having very 
substantial benefits to the terrestrial habitats that Ducks 
Unlimited and the wetland habitats that Ducks Unlimited was 
very interested in.
    So I think in terms of apportioning future expenditures, I 
think you need to look for the same mix. Target those projects 
that do, in fact, benefit agricultural interests, do, in fact, 
benefit the urban interest, and also provide a benefit for 
environmental restoration. That does not have to be limited to 
what I refer to as the obvious opportunities that were involved 
in fish screening.
    In Southern California, in the San Jacinto Wildlife Area, 
that wildlife area has a wetlands component exclusively because 
of the availability of water from a wastewater treatment plant. 
There are numerous opportunities, I think, similar to that. In 
the San Joaquin Valley, I have had farmers in the last 2 weeks 
contact me and say, I have land that I believe is marginal in 
today's economic standing. It has some availability of water 
during October-November-December when it is of specific 
interest to wetlands values and Ducks Unlimited's mission. That 
does not detract that water supply from farming interests later 
in the year, and they are looking at making some conversion of 
existing lands back to wetlands because it makes economic 
sense.
    I think we should invest in those where we have partners on 
the ag and urban side that say, this is a good investment for 
all of us on the environmental front. It complements--it 
contributes to an ecosystem restoration. That formula will be 
different on every single project, I assure you.
    Mr. Calvert. Thank you.
    Mr. Dooley?
    Mr. Dooley. Thank you, Mr. Chairman.
    Mr. Broddrick, in terms of the record of decision that was 
prepared last year, is Ducks Unlimited supportive of that?
    Mr. Broddrick. Ducks Unlimited is not a signature, 
obviously, to the record of decision. Ducks Unlimited has 
participated prior to the record of decision actually on 
projects that were funded through what they referred to as 
category three funding. We believe that there is a role for 
Ducks Unlimited with our engineering services and our survey 
services, with land owners that we are close to in terms of 
improving and enhancing wetlands and doing them in a fashion 
that actually meet the ecosystem goals of CALFED.
    I think the view of Ducks Unlimited, and we have not been 
engaged to the degree that the agencies have been, but the fact 
that there is an ecosystem plan and that plan will be 
implemented over a 30-year time frame, that that has some sense 
of rationale in terms of you do not change the environment and 
environmental conditions with just one year's activity.
    There is still significant debate as to what components of 
the environment are receiving the most attention, and quite 
frankly, and I think appropriately so, those species that are 
threatened and endangered, primarily fish species, have 
received the majority of the focus. Ducks Unlimited is in a 
position of trying to make sure that as they focus on 
threatened and endangered species, whether it be steelhead 
salmon or delta smelt, that it is done so in a fashion that 
complements our mission and objectives, which is maintaining 
wetlands.
    So the ecosystem restoration component that is in CALFED, 
it is a master plan. It is a good master plan. It needs a lot 
of refinement. It will be very much a product of adaptive 
management. They have committed to that. I think the science 
that they have committed to in CALFED as it relates to the 
ecosystem restoration plan is going to be critical. We do not 
know as much as we would like to know. Sometimes we do not know 
what we think we know when it comes to science. The fish and 
the wildlife have a tendency to respond sometimes out of script 
with our assessments. So I think maintaining that adaptive 
management is going to be critical.
    Mr. Dooley. In terms of the balanced approach that a lot of 
people have been talking about, does Ducks Unlimited also 
support, besides the ecosystem management, the need for the 
water storage and the water supply components that were part of 
the record of decision and are part of the bill that Senator 
Feinstein is introducing?
    Mr. Broddrick. I have not read Senator Feinstein's bill, 
and I apologize for that lack of fulfillment on homework. But 
in terms of storage in surface supply as well as groundwater 
supply, the more flexibility that you have in a system, the 
better we will be in a position to respond to those drought 
cycles, the better we will be in a position to capitalize on 
those high-water years, or a year that may not be a high-water 
year but you have got a lot of flood flows.
    We need to find a way to park, to invest that excess water 
so that we can draw upon it in subsequent years. We know in 
California we will have droughts. When we have droughts, 
fisheries, farmers, and wetlands suffer. Urban environments 
suffer. So it is prudent for the long-term management of the 
ecosystem to have as many tools at the table as you can. 
Groundwater storage, surface storage, not to predispose which 
ones, but certainly gravity-flow water and maintaining 
wetlands, concerning that the economic return on wetlands is 
not 400,000 tons of tomatoes, we do not have that opportunity.
    So the economics of water for wetlands can really drive and 
diminish the availability of wetlands. We are dependent upon 
irrigation systems for most of the wetlands in California, and 
two-thirds of those wetlands are owned by private interests, 
but they choose not to pay the increase in water cost and those 
wetlands go away.
    Mr. Dooley. Ms. McPeak, in terms of the Bay Area Council's 
support of the record of decision and also Senator Feinstein's 
approach, which this Committee is obviously going to be 
considering and most likely will introduce a bill also, in 
terms of her approach to the water supply issues, we are 
basically embracing the record of decision and then asking for 
some of the ones that Mr. Hall identified coming back to this 
Committee for authorization. Is that a position that you 
support and your Council supports?
    Ms. McPeak. The Bay Area Council enthusiastically supported 
the record of decision. We advocated for perhaps a little more 
emphasis on certain things that we thought might have been 
structured somewhat differently in the record of decision but 
had represented a major landmark accomplishment and a new 
plateau to move forward in implementing solutions.
    I have only briefly read a draft of legislation that 
Senator Feinstein is contemplating. I am sure we will be making 
comments, because what we want to see, as I have testified 
here, is Congressional action and the Federal Government being 
a full partner, the Federal agencies and Members of Congress, 
Congress as a partner in this solution.
    Mr. Dooley. Thank you.
    Mr. Calvert. Mr. Radanovich?
    Mr. Radanovich. Thank you. I have a question for both Mr. 
Broddrick and Ms. McPeak. Did your respective organizations 
take positions on the Trinity River decision?
    Ms. McPeak. We did not advocate one way or another except 
to acknowledge that the Trinity decision, when we add up all of 
the, if you will, the reductions in available supplies on one 
side of the ledger, when we add up all of the efficient water 
use measures we can think of, conservation in the urban sector, 
in the agricultural sector, add reclamation, add a water 
market, add a good watershed management, flexibility in 
operating the system, and you still end up with, in a normal 
year, which we do not have most times, an excess of demand over 
supply. And so that is why we sit here today acknowledging not 
only the Trinity River but the 4.4 plan on the Colorado, that 
there has to be an investment in the infrastructure to capture 
water when it is truly surplus.
    Mr. Radanovich. Mr. Broddrick?
    Mr. Broddrick. Ducks Unlimited did not take a position on 
the Trinity Decision.
    Mr. Radanovich. You were smart.
    [Laughter.]
    Mr. Radanovich. Mr. Woolf, can you give me an idea of what 
has been the level of commitment on water deliveries to 
Westlands, say, in the last five to 10 years?
    Mr. Woolf. I know we have not received 100 percent in any 
year. I think--
    Mr. Radanovich. Say that again, though, because I think it 
is important.
    Mr. Woolf. Well, we have had here the last, I believe, four 
or five water years prior to this season have been wet ones, 
and in our--well, in Westlands, I would think the average would 
have to be somewhere 50, 55 percent, and I am just taking a 
stab at it. I do not have the figures in front of me. This 
year, even with the reservoirs that were, relatively speaking, 
at great levels and a snowpack that was not quite 100 percent, 
we are now faced with about 40 percent in allocations.
    Mr. Radanovich. Thank you. Those are all the questions I 
have.
    Mr. Calvert. I thank the gentleman.
    Mrs. Solis?
    Mrs. Solis. Yes. For Ms. Sunne McPeak, with all the 
problems we are seeing now with the energy crisis and what have 
you, and articles that I have been reading about the users of 
our precious resources, water and electricity, has the Bay Area 
Council come up with a kind of a plan so to address this 
compelling issue that we have before us and perhaps some 
solutions as to how the Federal Government, along with the 
State, can work to help provide for assistance to meet that 
infrastructure need that you talk about?
    Ms. McPeak. With respect to power, we do have a position 
that we have shared with primarily our State representatives 
and I would be happy to--
    Mrs. Solis. Can you share that for the record?
    Ms. McPeak. --to send that to you, because it has some 
similarities to the water infrastructure that we just talked 
about. The employers that I represent for both the solutions on 
water and on power would start with saying we must be very good 
stewards of our resources. So optimize conservation, employ 
market-based solutions, but invest in infrastructure. When I 
have talked about water, I do not think personally and the 
organization I represent has concluded we must have additional 
storage, surface and groundwater, and improved conveyance. 
Likewise, on power, there must be additional generation 
facilities.
    And it is not either/or. That has been a false debate that 
we have had for too many decades in California. The common-
sense approach is, as we say, it is a sin to waste water, it is 
a crime to waste money, and so if you do not optimize 
conservation, be it water, be it power, we are being stupid. If 
we do not invest in infrastructure, we are being dumber, 
stupider. So it is a combination and no one tool will get us 
there.
    Mr. Calvert. Any additional questions?
    [No response.]
    Mr. Calvert. I have a couple of questions. Mr. Woolf, just 
can you explain in layman's terms, for the benefit of us at the 
dais that are not farmers, a couple of us up here, the 
differences between row crops and permanent crops?
    Mr. Woolf. Certainly. Permanent crops would be crops that 
certainly you do not rotate on an annual basis, and so almonds, 
pistachio, wine grapes, anything that will stay in the ground 
for probably five to 50 years.
    Mr. Calvert. Why have the Central Valley farmers been 
converting to permanent crops?
    Mr. Woolf. That is a good question, because permanent crops 
are usually, more often than not, more water-intensive. The 
reason that we have switched a number of our acres over to 
permanent crops is because when we run our budgets against our 
return per acre foot of water--we run all of our budgets based 
against our limiting resource. We can earn more per acre foot 
of water with our permanent crops.
    Mr. Calvert. So water reliability certainly affects both 
types of crops, but more importantly--
    Mr. Woolf. Absolutely. As we have converted over to higher-
value crops, our needs become more well-defined. We know 
exactly for the next 20 or 30 years that we are going to need 
X-amount of acre feet to service the pistachios or the wine 
grapes or whatever. So now our row crop acreage swings with the 
wind as it relates to our allocations on a year-to-year basis.
    Mr. Calvert. How does water quality affect crop production?
    Mr. Woolf. Different crops require different qualities of 
water. Most of the row crops, you can get by with using some of 
the local well water in conjunction with the higher-quality 
water that comes through the Project. Some crops, like almonds, 
are very sensitive and you want to use your higher-quality 
water on those. If we do not get the surface supplies, I can 
tell you it dramatically impacts your crops.
    Mr. Calvert. Mr. Broddrick, land retirement programs are 
certainly a big issue in California. I have heard a lot about 
them lately. How have conservation programs helped maintain 
land in California after it has been retired?
    Mr. Broddrick. In terms of land retirement, frankly, I do 
not think that--and I am speaking perhaps very quickly from the 
Ducks Unlimited standpoint. Ducks Unlimited has not per se been 
a recipient of the lands that were retired from a large 
retirement program that is being considered in Westlands. So we 
have not from a strict land retirement program been engaged.
    I think, however, for lack of a better term, the surrogate 
land retirement, where a land owner decides that it is no 
longer economically feasible to farm for whatever the 
circumstance, whether it be water supply or straight economics, 
we have participated where they have developed those into 
wetlands. We have been a partner with other State and Federal 
agencies in the design and facilitation of the Wetlands Reserve 
Program, as an example, where lands that have been in 
agriculture have made an economic decision to sell those. In an 
easement, they retain ownership, but we help them in the 
development of a wetlands plan, nothing on the size of as being 
contemplated as I understand Westlands.
    Mr. Calvert. Mrs. Napolitano? No additional questions?
    Mrs. Napolitano. No.
    Mr. Calvert. Mr. Dooley?
    Mr. Dooley. I just have one other question or line of 
questioning. In terms of this balanced approach and when the 
administration was working with the State and other 
stakeholders to put together the CALFED and the record of 
decision, Secretary Hayes made a very strong statement that on 
normal years is that Westlands should receive 65 to 70 percent 
of their contracted water, and as Mr. Woolf pointed out, even 
in the last few years, they have been not receiving oftentimes 
that 65 to 70 percent, and that is certainly water deliveries 
which is important not only into the Bay area but in the 
Central Valley to allow for investment decisions to be made.
    Ms. McPeak, it would be, I guess, a question directed to 
you. In order to try to achieve a balanced approach here where 
there is something in the CALFED reauthorization for everyone, 
would you think it would be appropriate that we set a standard 
that on a normal year, an irrigation district such as Westlands 
should, at a minimum, be able to receive 65 to 70 percent on a 
normal rainfall year?
    Ms. McPeak. Perhaps I could address this in a couple of 
ways. First, in addition to the word ``balance,'' we would use 
the word ``integrated,'' that it is not just trade-offs, it is 
optimizing a set of tools that are important. So it is an 
integrated approach in the CALFED.
    Secondly, as the Chairman was asking Mr. Woolf about 
delivery, say at 40 percent, and the difference between 
permanent and row crops, when you have low or less than optimal 
deliveries, what many farmers have done is go to more efficient 
irrigation practices. Those are pretty permanent installations. 
And while if you are growing it you have increased your company 
tenfold, maybe you do not have to go to the bank, but if you 
do, you are likely going to come to one of my members who are 
going to say right back, do you have any reliance on getting 
delivery of water so that you can pay me back on what you are 
borrowing to put in that efficient irrigation practice. So we 
have a relationship here.
    With respect to the assurance on delivery of water, the 
record of decision did have some language on that that we want 
to respect. I think there are different interpretations of that 
language. We would want to see as much reliability and fairness 
and assurance of delivery for the Westlands and agricultural 
areas of the State as we would want for our own region.
    Mr. Dooley. Mr. Broddrick, in terms of Ducks Unlimited, 
again, would you folks see that it would be in your long-term 
interest, specifically with Ducks Unlimited, that if Westlands 
was going to move in a direction where there is going to be 
some significant land retirement, which even Senator 
Feinstein's CALFED bill does include the provision of, still, 
by providing some certainty in terms of water deliveries, that 
that would also enhance the ability for some of these land 
owners and some of this land that was to be retired to be able 
to invest more in wetlands restoration, which would benefit 
that, is that something that you folks have looked at and have 
taken any type of position on?
    Mr. Broddrick. We were looking at it. We have not taken a 
position. How we are looking at it at this point and have 
reached no conclusions is that, as Ms. Peak indicated, it would 
need to be integrated wetlands and wetlands development. There 
is an ingredient there that is called water, and to the extent 
that that water is available or that this restoration can be 
part of and integrated with maybe a regional or local water 
supply program that may not be huge yield, but nonetheless, we 
think there are opportunities to design in the San Joaquin 
Valley a wetlands that capture high spring flows, provide some 
wetlands value, some agricultural value, but the landscape 
obviously has to be there and that would mean in many cases a 
retirement of existing farm operations. But we are looking at 
it, but once again, it needs to be integrated with the needs of 
the region. We would love to have the opportunity to recreate 
some wetlands down there.
    Mr. Dooley. And Mr. Woolf, what would be the practical 
impact in your operation if you did have a greater certainty of 
a delivery of 65 to 70 percent of the contract amount to 
Westlands in a normal water year, which would mean that in an 
abnormal year, there could be a reduction from that baseline?
    Mr. Woolf. It would have a huge impact. Right now, I am 
trying to figure out, whether or not to start making the 
investments in additional drip irrigation and conservation. Why 
make the investments in conservation if there is no water to 
conserve? I must have some fundamental level of assurance of 
delivery in order to make these decisions.
    I should also point out that in our farming operations, 
when we are talking about a 65 percent delivery, that 
translates into about 20-25 percent of what I actually need to 
grow my crops. The balance of my water comes through pumping, 
it comes through water exchanges with other farmers. And so the 
greater the reliability of that base amount, the greater 
reliability I have in making additional investments and the 
greater reliability I have in water marketing. But when you 
allow water allocations to shrink to possibly zero, I feel a 
huge swing not only in my base allocation but in water that is 
no longer available to market and trade.
    Presently, the only alternative is to pump, which means 
burning more natural gas, using more electricity, during an 
overpriced, unreliable energy crisis.
    Mr. Calvert. I thank the gentleman.
    If there are no further questions, I want to thank this 
panel for their excellent testimony and staying here to answer 
our questions. This was a very interesting session and we will 
have more as we move this process along. So we thank you, and 
with that, this hearing is adjourned.
    [Whereupon, at 3:55 p.m., the Subcommittee was adjourned.]

    [Additional material supplied for the record follows:]

    [The prepared statement of The Honorable Robert Meacher 
follows:]

  Statement of The Honorable Robert Meacher on behalf of the Regional 
                       Council of Rural Counties

    Mr. Chairman and members of the Subcommittee,
    I want to thank you for the opportunity to provide this written 
testimony on behalf of the Regional Council of Rural Counties (RCRC) to 
the Subcommittee for your hearing of April 3, 2001. We hope that what 
we have to say will underscore the importance of the counties that make 
up RCRC to the rest of California and to the Nation.
    We would like to emphasize three main points:
    First, that the landscape that makes up rural California is 
important because it provides most of the water, much of the 
electricity and much of the food that fuels and feeds California. Much 
of this land also is treasured by the nation because it refreshes us 
emotionally with its grandeur.
    Second, rural California includes examples of resources management 
that are successful and some which have become environmental tragedies, 
dependent upon the ability of people in Washington and our state to 
work cooperatively.
    Third, we would like to underscore the value of partnerships with 
locally elected county supervisors. They are closest to the people who 
live on the land and they best understand the problems associated with 
managing the land and the possible solutions to them.
    RCRC is an association of twenty-eight of California's fifty-eight 
Counties. Our membership is represented by 140 locally elected County 
Supervisors, many of whom comprise the Board of Directors for RCRC.
    RCRC's membership area is one of California's richest and most 
diverse environments. Its value is unquestioned for its beauty, 
resources and utility. It contains rich, productive farmland in the 
Sacramento and San Joaquin valleys that feed the nation. It includes 
the soaring Trinity Alps, the Cascade Range, the Coastal mountains and 
the mighty Sierra Nevada Mountain Range. It includes extensive forests 
that are both privately and publicly held, including 13 National 
Forests (Klamath, Shasta, Trinity, Modoc, Mendocino, Humboldt, Lassen, 
Plumas, El Dorado, Tahoe, Stanislaus, Sierra and Inyo).
    The RCRC member counties also provide 80 percent of the San 
Francisco Bay-Delta water supplies that quench the thirst for 20 
million people in urban areas. That same water is also used to generate 
up to 20 percent of the electricity used by California and other parts 
of the West. They include the watersheds of the Trinity River, the 
Sacramento River, the Mokelumne River, the Merced River and the San 
Joaquin River, as well as the Central Valley Project's largest man-made 
dams.
    RCRC's territory is well known to people outside of California for 
the scenic Yosemite Valley that has been so beautifully captured 
photographically by Ansel Adams, the Calaveras Frog Jump written about 
so colorfully by Mark Twain, and as the home of the Gold Rush, which 
helped America discover California. But beyond the scenery, there is 
one very clear and important point. Without the RCRC and the people it 
represents, there can be no long-term solution to water and natural 
resource problems in California or elsewhere in the West.
    In California, the responsibility for managing this land is 
primarily the responsibility of counties. For well over 100 years our 
counties have statutory land use planning authority under California 
law. They are charged with developing comprehensive General Land Use 
and Resource Plans, zoning ordinances and a process to approve orderly 
growth, while protecting the environment and providing for a viable 
economy.
    In addition, our counties are the lead agencies responsible for 
environmental analysis, according to the California Environmental 
Quality Act. Counties have regulatory authority over groundwater in 
California, as validated by a California Supreme Court decision, Tehama 
v. Baldwin. Some of the member counties also serve as water agencies to 
supply the people and lands within their boundaries. Others have their 
own public power agencies to provide electricity.
    The elected supervisors from our member counties must understand a 
multitude of issues. They include forestry, farming, water resources, 
flood control, power supplies, wildfires, police and fire protection, 
the environment, recreation, housing, traffic circulation, and health 
care.
    Most important of all, our county supervisors are responsible to 
their constituents. They are no different than the elected officials on 
this Committee, responsible to the people who put them in office. In 
our rural counties, the numbers of those people doubled between 1970 
and 1990. Some of the fastest growing areas in California are within 
RCRC's membership area, which increases the strain on each county's 
ability to provide services for local residents while maintaining the 
support for people to whom they export their resources.
    Our people fundamentally believe that those closest to the land, 
who live on the land, make the best decisions about those resources. We 
believe that a farmer in the Sacramento Valley knows how to maintain 
the agricultural viability of his land to support his family and to 
feed millions of other people without compromising the environment for 
the ducks and geese on the Pacific Flyway. A forester, standing in a 
crowded tangle of undergrowth during a crackling hot summer day knows 
that a spark is a fire, and that a fire means decades of devastation 
for thousands of acres and countless wildlife. In a far away office in 
San Francisco or Washington, it is less clear what nature's signals 
mean, or if they will be heeded.
    RCRC's member counties contain places that evoke powerful memories 
and emotions to many people. Some speak to some of the greatness of 
this nation, such as Yosemite National Park. Others are sad testimony 
to environmental failure. Who can ever forget the photographs of the 
twisted and malformed animal life in a place called Kesterson Wildlife 
Refuge; a place that was supposed to be a sanctuary for birds that, 
instead, became a poisoned well of deformity because of failed 
government policies. Let us compare the benign use of Lake Tahoe, one 
of the nation's greatest environmental treasures, with the abuse of 
Mono Lake and its legacy of dust storms that choke the Owens Valley.
    There were many factors that contributed to success or failure. But 
among the most important was the degree of partnership and cooperation 
between the Federal Government, which makes decisions in far-away 
Washington, D.C., and local elected officials who are closest to the 
problems and their solutions.
    The RCRC membership counties have a rich history and tradition of 
contributing valuable resources to benefit people in other portions of 
the state--and the rest of the West. That's true, for example, when 
electricity generated by hydro facilities in California's rural 
counties is exported to the Pacific Northwest to help people in that 
area meet their winter-time heating needs.
    California depends heavily on rural California for its water, 
hydroelectric energy production, minerals, food, fiber, building 
materials and outdoor recreation. Even so, the interests of rural 
counties are often overlooked or ignored because their political 
representation is so overshadowed by the more populated urban regions 
of California. But people in rural counties today are more vigilant. 
They are unwilling to do business on a firm handshake, a pat on the 
back and promises for the future.
    California's rural counties are undergoing tremendous change. In 
some areas, significant population growth strains the ability to share 
resources. And that growth demands the opportunity for economic 
development in years ahead. They see the promise of becoming part of 
the technological future of our state, while still being connected to 
the landscape. They have no intention of allowing that future to be 
traded away as off-site mitigation for another area's problems.
    The leaders of these counties firmly believe that all people's 
views are valuable. They also believe that the best solutions are those 
developed locally. Our leadership sees the Federal and State government 
as potential partners in problem solving. But, it is a partnership 
that, in the past, has not lived up to its full potential to protect 
the interests of all the people who are affected by the decisions it 
makes.
    How decisions are made can ultimately be more important than the 
decisions themselves. If the people on the landscape have no faith in 
the decision-makers, the process implementing the decision will fail. 
Our Republic is anchored on the premise that the people's elected 
representatives make the decisions that affect their lives. Further, 
there must be a fundamental accountability between those who make the 
decisions and those whose lives are affected by them. The Supervisors 
of our rural counties live with that reality each week during their 
board meetings and every four years during elections. However, all too 
often they are caught between poorly thought out Federal and state 
actions and a public whose lives are harmed by those actions.
    There is a new Federalism in Washington. It encourages, rather than 
stifles, local solutions and collaborative processes. There is a new 
vision of government in Washington, in which local people have a voice 
and a role in making decisions. There is a new leadership ethic in our 
nation's capital; one that gives those it leads a voice in their own 
future. There is new hope for Washington, and it is that those elected 
to serve in Washington will hear those who are elected to serve back 
home.
    And in that spirit, the supervisors who represent the Regional 
Council of Rural Counties, looks forward to a cooperative partnership 
with people in Washington. A partnership that will help California and 
the West meet its water and energy needs; that will preserve national 
treasures for the country to enjoy; and that will preserve the ability 
of rural counties to maintain their quality of life, provide services 
to its citizens and protect its ability to develop economically.
    Thank you for your consideration.

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