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L(':l l!? C) N o o Since November, the Bureau and CVP contractors have had eight negotiating sessions. "The negotiation approach of sharing concerns and interests is being used in the hope that both sides will thoroughly understand each party's wants or needs and work together as panners to develop a viable, long~term water service contract," said John Davis, special projects officer with the Bureau. In addition to specific regional concerns, these are the other key issues under debate: Tiered pricing. The CVPIA requires the Bureau apply a new tiered pricing schedule when the water contracts are renewed, in which contractors pay a higher price for 20 percent of their supply. The Bureau's draft proposal applied the higher rates to the last 20 percent of Category I water and to all Category II water. Contractors say this approach will price them out of business. The tiered pricing system was intended to encourage water conservation. Con~ tractors, however, say it will discourage conjunctive use programs, buying more water in wet years and storing it underground for dry years, because of the price of the water. Bureau officials say they are willing to receive alternative proposals from the contractors on how t() implement the tiercd pricing provi~ sions of the CVPIA. Contract renewal. The Bureau has not cOInmitted to subsequent renewal beyond the first 25~year term, pointing to language in the CVPIA that says the secretary of Interior may renew contracts after the initial tenn. In the past, the United States has promised to ensure continued water service. This has becorne a major bone of contention among CVP irrigators who argue that without a promise of renewal it will be difficult to gain financing for district improvement projects and farming operations, and plant permanent crops. Shortages. The Bureau will accept no liability for water shortages that January/February 2000 result from sources outside the control of the contracting officer or from actions taken to meet "legal obliga- tions." (See May/June 1997 Western Water for more discussion of this issue.) Additional supplies. CVP users arc angry that the draft renewal contract does not identify methods by which Interior would work to restore water lost from CVP yield, improve water supply reliability or provide flcxibility for contrac- tors to deliver non~ CVP water to help meet supply demands. The CVPIA, they say, requires that Interior take action by 2007 to replace water lost to contractors due to implernenration of the CVl'IA. The Bureau did complete a water augmentation plan in 1995 and presented it to Congress, and is now working on a supplement to that plan. While working on the PElS, Bureau officials learned increased withdrawals by senior water rights holders and contemporary water requirements f()r the environment (the ESA, the Delta Accord and the fish-doubling plan) would reduce their ability to deliver water to CVP water service contractors. Especially disturbing to CVP usets is the assessment that in a drought, urban users in Santa Clara Valley and Contra Costa Water District could see CVP deliveries potentially drop by half. (The Santa Clara Valley also receives water from local groundwater aquifers and the SWP.) Irrigators on the west side of the San Joaquin Valley could receive no CVP water in certain drought years. In recent weeks, the debate over the 800,000 acre~feet of environmental water has shifted to the political arena as west side water llsers pressure the Bureau, Gov. Davis and Babbitt to change the policy. In lace January, CVP~ SWP operations were the focus of a joint legislative hearing convened by the state Senate's Agriculture and Water Resources and Assembly's \'(latcr, Parks rmd Wildlife commIttees. 11