In a decision that could complicate Gov. Gavin Newsom’s push to build a giant water tunnel and remake California’s water system, a state appeals court has rejected the state’s plan for financing the project.
The 3rd District Court of Appeal ruled against the state Department of Water Resources’ plan to issue billions of dollars in bonds to build the 45-mile tunnel beneath the Sacramento-San Joaquin River Delta.
The decision is a win for California ratepayers and taxpayers, said Roger Moore, a lawyer representing six counties in Northern California and two water agencies in the Delta region.
He said it underlines that state agencies “have to take real steps to make sure that there is transparency and accountability.”
Upholding a 2024 decision by a Sacramento County Superior Court judge, the court ruled the water agency does not have the authority under a 1959 law to issue bonds for a new “unit” of the State Water Project, which delivers water from the Delta to farms and cities, and “exceeded its delegated authority” in planning to finance the tunnel through bonds.
Kirsten Macintyre, a spokesperson for the department, said the court didn’t say the Department of Water Resources lacks the authority to build the project or borrow funds to pay for it, but rather that the description the state presented in the case was “overly broad.”
“While DWR respectfully disagrees with that conclusion, we have taken additional steps to resolve the issue,” she said in an email.
Last year, the agency opened a second court case in an effort to confirm its bond-issuing authority, a step that Macintyre said was taken to “address the court’s concerns.”
If the appeals court decision stands and the ongoing case doesn’t bring a different conclusion, it might lead the Newsom administration to revise its plan for financing the project. Officials could also petition for the California Supreme Court to hear the case.
State officials have said that the tunnel, called the Delta Conveyance Project, ultimately would be paid for by participating water agencies that agree to repay the bonds.
The tunnel would create a second route to transport water from new intakes on the Sacramento River to the south side of the Delta, where pumps send water into the aqueducts of the State Water Project.
The system of aqueducts and pipelines transports water from the Delta to 27 million people in cities from the Bay Area to San Diego, and to 750,000 acres of farmland.
In 1960, California voters approved bonds for the construction of the State Water Project. Legislation in 1959 had given DWR the authority to build the Feather River Project, an initial component of the State Water Project.
But in the ruling last week, the court said DWR officials were wrong to rely on that provision. The three judges said it doesn’t allow the agency to issue bonds “under the guise of a ‘further modification’” of that original water system.
Newsom has said the project is essential for the state’s future and has made it a central priority of his administration.
State officials and supporters of the project have said the tunnel would modernize the state’s water system for more severe droughts and deluges with climate change, and would withstand sea level rise and the risks of a major earthquake in the region.
Opponents, including environmental advocates, fishing groups and tribal leaders, argue the project would harm the Delta’s communities and ecosystem, and further threaten native fish that are already in decline.
California’s mountains are covered with snow, reservoirs are mostly filled and hills across the state are sprouting green grass and wildflowers after the latest round of soaking storms.
The snowpack across the Sierra Nevada now stands at 105% of average for this time of year, and state officials will provide an update on conditions Tuesday when they conduct their April snow survey, which is typically when the snowpack reaches its peak.
The state’s major reservoirs are at 116% of average levels, and are set to rise further as snowmelt streams in.
After a second wet winter, the state is heading into spring and summer with boosted water supplies.
“It puts us in very good shape,” said Felicia Marcus, a water researcher at Stanford University. “Any time you get to average, that’s a great thing.”
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She said the ample snow and rain this year provide the state some breathing room, but shouldn’t diminish the urgency of planning for the next severe drought and the effects of climate change.
“We’re on borrowed time,” Marcus said. “We need to save more water, even in the wet and the normal years, to get us through the increasingly frequent and drier dries that are inevitably going to come.”
In the last decade, California endured two severe droughts, and then came the historic series of atmospheric rivers of 2023, which brought one of the biggest accumulations of snow on record and triggered damaging floods in parts of the state.
This winter began with unusually dry conditions, but initial fears of a “snow drought” faded as storms in February and March pushed the snowpack to average levels.
Precipitation has been slightly above average statewide so far this year. And no part of California is currently in drought conditions, according to the U.S. Drought Monitor’s data.
Water levels in the state’s largest reservoirs in Northern California are well above average levels for this time of year. Shasta Lake is now 92% full and continuing to rise with runoff from the latest rains, while Lake Oroville is at 88% of capacity.
In Southern California, Diamond Valley Lake is also nearly full.
Wetlands spread along the shoreline at Big Break in the Sacramento-San Joaquin River Delta near Oakley.
(Brian van der Brug / Los Angeles Times)
Marcus, a former chair of the State Water Resources Control Board, said the reprieve this year buys the state a bit of time to advance conservation efforts in cities and farming areas, and to invest in projects to recycle wastewater, capture stormwater and recharge groundwater.
“It doesn’t mean we take our foot off the gas pedal,” she said. “Because every year could be the first year of a 10-year drought.”
Even with the state’s reservoirs at healthy levels, California continues to face complex water management problems, such as struggling fish populations and the depletion of groundwater in many farming areas.
Chronic shortages of supplies from the Colorado River, a key source for Southern California, are also forcing water managers to make plans for scaling back water use.
For Southern California’s cities, however, this year’s storms and the substantial amounts of water stored in reservoirs are expected to keep supplies flowing reliably — a dramatic change from 2022 and early 2023, when shortages led to mandatory drought restrictions for millions of residents.
The Metropolitan Water District of Southern California, which delivers supplies to cities and local agencies that serve 19 million people, now has a record amount of water stored. That 3.4 million acre-feet of water, banked in various reservoirs and underground storage areas, equates to nearly three years’ worth of imported water, and a large portion of it accumulated thanks to conservation efforts, said Adel Hagekhalil, the MWD’s general manager.
“We in Southern California have done a great job in managing our water and reducing our water use,” Hagekhalil said.
While two wet years are helping the region’s water outlook for now, he said, the district’s officials are continuing to focus on long-term plans to ensure supplies during more severe droughts supercharged by climate change.
“We may be out of drought for the time being, but we’re not out of drought for the future,” Hagekhalil said. “This is the future climate, and we need to prepare for it.”
Last month, California increased the water allocations that suppliers will be able to receive this year from the State Water Project to 30% of their full allotments. That level of water deliveries “puts us in balance” with current water demand, Hagekhalil said, enabling the MWD to not draw down its stored supplies this year, and instead keep those reserves for when they’re needed.
Hopefully, he said, the latest storms will bring another increase in the state’s water allocations.
“That puts us in a place where we are storing water everywhere we can,” Hagekhalil said.
“Every drop that we can now store is a drop that we have available for the future,” he said. “This is the climate whiplash. We’re going to see hotter and drier days, and probably a number of years of drought coming to us, so this is the time to capture the water and store it.”
In the Sacramento-San Joaquin River Delta, the center of the state’s water system, a recent increase in the deaths of fish at pumping facilities has prompted criticism from environmental groups and led to limitations on pumping.
“Overall, our pumping has been low throughout the year,” said Lenny Grimaldo, environmental director for the State Water Project. “We’ve seen a lot of protections triggered for species.”
The powerful pumps at state and federal pumping facilities reverse the flow of water in parts of the south delta, and fish can be sucked into the pumps or eaten by predators. Some fish are regularly captured at the facilities and released.
State officials said the estimated losses of endangered winter-run Chinook salmon and threatened steelhead trout at the state and federal pumping facilities surpassed annual take limits on March 21, which prompted discussions among multiple government agencies about additional measures to protect fish.
As a result, Grimaldo said, state and federal officials have kept pumping to levels that they deemed are “protective of minimizing additional losses of fish but also protective of water supply.”
The pumps that supply the aqueducts of the State Water Project and the federally managed Central Valley Project have been operating at a little more than one-third of combined capacity.
The state’s water withdrawals have been reduced since February to protect migrating fish, and in the last week, pumping was slightly increased based on data suggesting that this level of pumping “is not drawing additional steelhead into the zone of influence of the pumps,” said Mary Fahey, a spokesperson for the state Department of Water Resources.
State officials believe “protections for steelhead have been suitable for winter-run salmon as well,” Fahey said. She said the uptick in pumping will be short-lived because rules to protect another fish species, longfin smelt, take effect this month.
Meanwhile, other debates over long-term water management are continuing.
Gov. Gavin Newsom and his administration are supporting plans to build Sites Reservoir, the state’s first new large reservoir in decades, as well as the proposed Delta Conveyance Project, a 45-mile tunnel that would transport water beneath the delta.
Newsom’s current plan for adapting to a hotter, drier climate predicts that California could lose 10% of its water supply by 2040.
Bidwell Bar Bridge spans Lake Oroville in February.
(Brian van der Brug / Los Angeles Times)
State water regulators are considering alternatives for new water quality standards that will determine how much water may be drawn from the delta.
In farming areas in the Central Valley, local water agencies are starting to plan for mandatory reductions in agricultural water use to comply with the state’s groundwater law, which calls for curbing overpumping by 2040.
And for urban areas, the state water board is considering new conservation rules that will require each city or local supplier to meet a locally tailored water-use budget. After an initial proposal encountered criticism from water agencies, the board’s staff issued a revised proposal that includes less stringent water-saving standards and would reduce the number of suppliers that need to make large cutbacks.
The changes were supported by water agencies. But environmental groups and conservation advocates have objected to the weakened plan and urged the state to adopt strong water-efficiency standards to help the state prepare for more severe droughts and hotter temperatures.
Marcus said she agrees with the conservation camp and thinks it’s short-sighted to roll back the requirements to the extent state officials are proposing.
“We’re in a climate emergency and a water emergency that’s decadal at minimum,” Marcus said.
“The red alert is on for this, and conservation is the most cost-effective in the long run for communities,” she said. “We’ve got to definitely do a much better job of cutting back on our water use in the most creative ways we can come up with.”
