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000385 If California chooses the "hard landing" approach, California will lose access to surplus water beginning January 1, 2003. Cities in Southern California will bear the immediate shoman, potentially losing as much as half of the Colorado River water they currently receive. Because the Metropolitan Water District in Southern California had the leadership and foresight to develop alternative water supplies. people there will continue to see water flow from their taps. But over time, the reduction in Colorado River water could have very real impacts to all water users in Southern California. As you all know, the operations of the Colorado River reservoir system are detennined in each year's Colorado River Annual Operating Plan. The Annual Operating Plan is developed with input from the Basin States, Tnoal representatives. environmental groups and other members of the public. I signed the 2003 Annual Operating Plan this moming_' The Annual Operating Plan implements the Surplus Guidelines. It provides that if the California entities do not sign the QSA, surplus deliveries of water to Southern California cities will automatically be suspended in 2003. As Secreta1y and River Master, I must enforce the Law of the River_ This means I will hold California to the express covenant it made in 1929 to limit its use of the Colorado River to 4-4 million acre-feet. No alternative is permitted under the Dect"ee of the United States Supreme Court in Arizona Y. California. Absent enforcement of the limirs established in the Law of the River, the allocation of the right to consume water among the states would be meaningless. Enforcing the seven-state agreement preserves the important principle that agreements will be honored. These commitmentS were carefully negotiated by all seven Basm states and the Interior Department. California helped craft the agreement. If this agreement is not enforced, other water negotiations and agreements will be at risk. Another decade-long round of U.S. Supreme Court litigation on the Colorado River is a very real danger_ rfthe California entities choose not to take the steps necessary for the gradual, voluntary reductions contemplated under the seven-state agreement, California will lose access to exna water available under the Interim SUIplus Guidelines_ In such an event, California will be forced to live within its 4.4 million acre-feet apportionment from the Colorado River in 2003. While we understand the desire of California entities to obtain certainty with respect to concerns about what the future may bring, the Law of the River does not provide any exception to the requirement that California live within its legal entitlement of water from the Colorado River. My hope is that the California entities can still sign the QSA before the December 31 Sl deadline. I am directing the Bureau of Reclamation - under the guidance and direction of Assistant Secretary Bennett Raley-to work with the California entities to achieve that goaL I am also directing my staff to initiate consultation with representatives of Cali fomi a and the other Basin States on the appropriate mechanism for implementing the 4.4 million acre-foot limitation on January 1.>1. While we have not yet finalized the details. it is fair to say that there will be an actual reduction in diversions through the Colorado River Aqueduct in Januaty 2003. In the event that the: QSA is not signed by the deadline, it is possible for California to have the Guidelines CRWtJA - Dec. 16. 2002 Page 3 of 7