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CVPIA - - --- .. ~. -~ l" f4 The /992 evp Improreme1l1 Act 1lIloH'.~ water 1l.\'erS to sell CVP water/or {l profit to allY other emiry. including olles oll/side Ihe CVP ser\'ice area. Picfured abm'e. Shasta Dam, keystone of the CVP. 12 In addition to reallocating a portion of CVP supplies fa the environment, the 1992 CVP Improvemenf Acf (CVPIA) also greatly advanced the concept of water marketing. Under the law, CVP water users are allowed to sell CVP water for a profit fa any other .., entity, including ones outside the CVP service area - a practice previously pro- I hibited. Transters must be approved by the secretary of the Department of the Inte- rior. Additionally, those transfers involving more than 20 percent of CVP water under long-term contract must be approved by the local irrigation district. Transfer of CVP surface water is prohibited if it would increase long-term adverse impacts on groundwater supplies. One of the most contentious issues involv- ing transfers of CVP water is who should approve transfers, the water district or farmer. At issue is whether the water in question is perceived as a shared local resource controlled by the district or a resource belonging to the individual farmer. Supporters of local district control contend that water agencies were formed to protect the interests of all and they should have a strong role in marketing decisions. Some economists believe the best way to estabiish a market is to allow farmers to make decisions regard- ing buying and selling water. The first proposal for a fong.ferm transter oufside the CVP service area under the CVPIA was with. drawn because of unresolved issues regarding the effect on groundwater due to fallowing. The contro- versial agreement involved MWD buying water from the Areias Dairy Farm in the San Joaquin Valley while at the same time contributing to an environmental restoration fund under CVPIA. The Central Califor- nia Irrigation District (CCID), which supplies water to Areias' land, claimed the transfer woufd adversely affect groundwater conditions in the district due to fallowing and increased use of groundwater as a substifute supply by Areias. CCID claimed this transfer would have an unreasonable impact on the overall water supply, operations and financial condi- fions within CClO. In 1995, the CCID submitted a transfer application to the Bureau on behalf of one of its water users, Redfern Ranches. The agreemenf called for the ranch to fallow some of its land from 1995.1997 and transfer the water to three adjacent CVP districts in 1996 and 1997. The amount of water to be trans- ferred was dependent on the number of acres fallowed, with each idled acre providing about 2-1/2 acre-feet of transferable water annually (2,500 acre- feet annually maximum). The Bureau approved the transfer after determining that it would not cause any significant environmental impacts. Redfern Ranches chose to extend the transfer agreement for an addi- tional five years in 1997, though refrained from trans- ferring any water in 1998 because of EI Nino. In 1999, the ranch transferred approximately 1 ,260 acre-feet. Although the CVPIA advanced the idea of out-of- service.area transfers, issues still remain that preclude such transfers. The Bureau is hoping a new water marketing clearinghouse being proposed for the state (see sidebar) will help in making the details of each transfer accessible, and will provide a better understanding of the proposed transfers. WATER TRANSFER CLEARINGHOUSE Many proponents of water marketing have said a statewide water transfer "clearinghouse" is necessary to truly open up the water market in California, Such a clearinghouse would more than likely be available on-line and through a personal computer. With such a tool at their disposal, those in the business of buying and selling water - both state contractors and private entities - could access potential buyers and seffers; obtain lists of recent water transfers; determine the "going rate" for water; and buy and sell available water. Such a site also could refay information about region-specific groundwater levels, weather forecasts, precipitation levels. available storage and other water conditions around the sfate. Westlands Water District, a large agricultural district on the west side of the San Joaquin Valley, already has a functioning wafer transfer clearing- house in place dubbed WaterLink. Serving more than 600 farmers and 600,000 acres of farmfand, Waterlink is a gateway for Westlands' farmers to buy and sell water with one another over the Internet for intra-district use, Users claim the system allows them to manage their water supplies more efficiently both financially and time wise. The district hopes to expand WaterLink to include other agricultural regions around the state.