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~.RI=f .. U tV 0 AtW MPfH Al HH bAi ~~ ~ ~iH [I OPERATING HEADQUARTERS. P. O. BOX 937 . IMPERIAL. CALIFORNIA 92251 Background on California's Quantification Settlement Agreement (QSA) In April 1998, the Imperial Irrigation District (lID) ~nd the San Diego County Water Authority (San Diego) announced the largest agricultural-to-urban water transfer agreement in the history of the West. Under the agreement, San Diego would pay lID a per acre-foot (A F) charge that would be used primarily to fund on-farm conservation improvements. Over time, these improvements could yield 200,000 AF annually of conserved Colorado River water for use by the San Diego region for the n~xt 75 years. The landmark agreement ignited long-smoldering tensions among California water agencies that draw their supplies from the Colorado River. Coachella Valley Water District.(eVWD) threatened to contest the transfer on the grounds that as the next priority user it was entitled to any Colorado River water not used by lID. The Metropolitan Water District of Southern California (MWD), which wholesales water to San Diego, also opposed the trans(er agreement. And although supportive of agriculture-to-urban water transfers, the Interior Department raised concerns about how conservation by lID could be verified. At the same time, the other six Colorado River Basin states increased pressure on California to live within its basic apportionment of 4.4 MAF annually. California has used an average of 5.2 MAF annually. The water in excess of California's basic 4.4 MAF apportionment, roughly 700,000 AF, has been used by MWD, which serves California's largest urban areas, including Los Angeles and San Diego. Initially, California was able to exceed its apportionment because Nevada and Arizona had not fully developed their apportionments, and under the Law of the River (see attached outline), California could claim - temporarily - their unused shares. However, since 1997 both Nevada and Arizona have made full use of their apportionments. The excess water to meet Southern California's urban needs now comes mainly from Colorado River flows that the Secretary of the Interior has declared to be surplus. The Secretary can make a surplus declaration-when there is enough water in Colorado River reservoirs to meet needs in excess of the 7.5 MAF apportioned to the Lower Basin. Surplus determinations are made annually according to a set of guidelines established by federal regulation. The turmoil caused by announcement of the lID-San Diego transfer agreement in early 1998, together with pressure from the Basin states and the Interior Department, eventually brought the California water agencies to the table to develop, along with the state, the Quantification Settlement Agreement (QSA). The QSA has become the core of the California Colorado River Water Use Plan, the blueprint for bringing the state within the 4.4 MAF apportionment.