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Central Valle The federal government has long played a major role in development of the West's water resources. With passage of the Reclamation Act of 1902 and the leadership of President Theodore Roosevelt, the U.S. Bureau of Reclamation (Bureau), a branch of the Department of the Interior, was created to reclaim Western lands, primarily for agricultural development. A massive project to benefit California's vast Central Valley was the focus of state and federal attention. Originally it was conceived and approved by California's governor in 1933 as a state project to control flooding, store water and produce electricity. But the state encountered Depression-time difficul- ties in financing it. Attempts to obtain federal grants and loans failed and the state asked the federal government to take over. In 1937, passage of the Rivers and Harbors Act authorized construction of the initial features of the federal CVP and by 1951. most were completed. The CVP encompasses some 20 reservoirs with a combined storage capacity at 11 million acre-feet, 11 power plants and three fish hatcheries. The dams and reservoirs of the CVP were constructed primarily for river regulation, navigational improvement and flood control. In a normal year the CVP delivers about 7 million acre-feet of water, 95 percent for irrigation and 5 percent for urban use. It provides water to 3 million acres of farmland in the Central Valley - about one-third of California's irrigated acreage - and water to about 2 million urban customers. The project also provides water for power generation and recreation. Major features of the CVP include Shasta Dam and reservoir on the Sacramento River, Trinity Dam and Clair Engle Lake on the Trinity River, Folsom Dam and reservoir on the American River, Friant Dam and reservoir on the San Joaquin River, New Melones Dam and reservoir on the Stanislaus River and San Luis Reservoir, a joint federal-state storage facility. Conflict over the construction of New Melones Dam galvanized the river-preservation movement in California. The struggle between environmentalists and water developers lasted from the early 1970s until the Stanislaus Canyon was flooded in 1982 and 1983 during a high runoff year. The federal government financed nearly all construc- tion costs on most CVP projects, with costs to be reimbursed by state and local agencies over a period of decades. To date. $1.7 billion of the project's $3.4 billion cost has been repaid. In 1986, the Bureau approved a new irrigation rate-setting policy and CVP Pro · ect ., ~~-~ ~ I!::;; customers will see their costs rise as contracts with previously fixed water rates are renewed. Deficits accumulated under previous contracts must be repaid with interest. Also, under the 1992 CVP Improvement Act, a tiered pricing structure was established for renewed long-term water contracts. Shasta Dam and ,.e.~'elT()ir 011 the upper Sacramento Ri\'ef is the C\,P's largt'st stomge facility. capable oj holding ../.5 millioll acre- feet of Inlier. The CVP and other federal reclamation projects created a subsidy in the form of interesHree water and facilities for irrigation users, a feature designed to bring settlers to the West and bolster the economy and national security. The 1902 Reclamation Act included a provision limiting this low-cost water to farmers who owned 160 acres or fewer. The limitation was long opposed by farmers and the Reclamation Reform Act of 1982 increased the allowable acre- age to 960. The question of state or federal ownership of the CVP has been an issue since the project's incep- tion. Disagreement simmered over how the project would be administered and who would benefit. In 1945, the secretary of the Department of the Inte- rior suggested a purchase price of $357 million - then considered an incredible cost - and eventually the state dropped the proposal. In 1992. the discus- sion was breached again, but stalled. CVP users launched an unsuccessful effort to buy the project in 1995, halted by disagreements over Ihe purchase price, liability issues and conCerns about the rate charged for water supply. 9