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<br />Committee by one vote. Opposition centered around the potential for harm to <br />downstream water rights holders (which suggests a concern over the ability to determine <br />how much water is actually conserved).93 <br /> <br />One major water conservation/transfer agreement that has been reached was not <br /> <br /> <br />consummated under an incentive-based statute. The Metropolitan Water District of <br /> <br />Southern California (MWD) and the Imperial Irrigation District (lID) concluded four <br />years of negotiations in December 1988 on an arrangement whereby MWD will finance the <br />construction and initial operation of water conservation measures in the Imperial Valley in <br />exchange for the transfer of 100,000 acre-feet per year of conserved water to its urban <br />users. The conservation facilities will cost an estimated $92 million upfront. MWD will <br />also cover up to $23 million in IID's indirect costs (which includes environmental <br />mitigation expenses), defray $14 million in operating costs over the first five years, and pay <br />$3.1 million in annual costs for the 35-year life of the agreement.94 <br /> <br />It is important to emphasize that the agreement does not involve the acquisition of <br />lID water rights. MWD will cover IID's conservation costs and have access to conserved <br />water as part of a revised contract among IID, the Bureau of Reclamation, and two other <br />districts using Colorado River water in Southern California. lID has contended that it <br />should be able to market conserved water under California's conservation/transfer statute; <br />MWD has argued that it should have access to the water as the next senior user on the <br />Colorado River. The two sides have essentially agreed to disagree on the legal mechanism <br />for transferring water in order to proceed with the conservation measures.95 <br /> <br />The MWD-IID agreement may not be the best example of a negotiated settlement <br />to transfer conserved water and avoid basin-of-origin impacts. Imperial was faced with a <br />state Water Resources Control Board order to devise a conservation plan to preclude <br /> <br />48 <br />