RE: Proposed alternatives to Restructured Agreement for Water
Supply, Section 2.4, Potter Valley Project acquisition
To: Our community of water consumers, Water Contractors, fisheries
supporters and watershed restorers
Dear friends:
SCWA staff and attorneys have provided their first response to the problems
identified in the Restructured Agreement for Water Supply regarding purchasing
the Potter Valley Project, with its financial and environmental costs
and ratepayer risks. Friends of the Eel River has presented alternative
language controlling such risks.
We urge Water Contractors, ratepayers and the public to carefully consider
these alternatives in light of the identified concerns, and to strongly
support the FOER-proposed changes, and reject the SCWA-proposed expansion
of obligations.
There is no need at this time for Water Contractors to have to agree
to a Potter Valley Project purchasing process and authorization procedure
in the current Restructured Agreement without any project proposal from
SCWA containing clear cost estimates, risks to ratepayers, and environmental
consequences. In fact, SCWA staff has repeatedly declared during the many
council and district hearings on the Agreement that they have no desire
to purchase the PVP any time in the next 10- 15 years, hope never to do
so, and that water from the PVP diversions is not needed to serve Water
Contractors' needs. They have declined to provide any cost data as requested
by MMWD in August. If SCWA wishes to eventually propose a clear rationale
and financial proposal to Water Contractors, they can always do so when
it becomes necessary.
We will, of course, be pleased to discuss any details and concerns that
Water Contractors may have with these proposals.
Thank you.
David Keller
Friends of the Eel River
Included on this page are:
1.
the SCWA-proposed language which includes an expanded rationale and risks
for purchasing the Potter Valley Project, as presented to the Water Advisory
Committee on Monday morning, 12/05.
["Restructured Agreement PVP Revision Sec 2.4 SCWA 11-22-05"
in the text below.]
2. Friends of the Eel River's
proposal for a very clear and simple alternative. This was also presented
to the WAC, and should be distributed along side the SCWA proposal to
all the Water Contractors.
["Restructured Agreement PVP Revision Sec 2.4 FOER 12-2-05"
in text below.]
Both proposals will be circulated to all Water Contractors as possible
alternatives to the existing language describing authorization for purchasing
the Potter Valley Project in Section 2.4, which is now in limbo.
Those contractors' informal discussions will begin with North Marin Water
District and Valley of the Moon Water District Tuesday evening, Dec. 6.
Discussions will seek 'direction' for staff. Other cities and districts
will follow over the next month or two.
SCWA's new proposal represents significant mission creep and increased
liabilities.
In a very strange twist, SCWA's new language for the Restructured Agreement's
authorization and process to purchase the PVP expands the grounds used
to justify purchasing it. This is apparently SCWA's response to the significant
problems of the high financial risks, ratepayer uncertainties and environmental
damages of the Potter Valley Project acquisition (described in the existing
Section 2.4, text below) identified in rejection of the existing Agreement
by North Marin Water District, the Town of Windsor, Marin Municipal Water
District, as well as the concerns raised by the City of Sonoma in their
postponed vote on the Agreement.
Rather than respond to these concerns by revising the Restructured Agreement
to identifying and capping costs, limiting ratepayer liabilities and ending
environmental damages from the water diversion, this new language proposes
yet additional uses of the PVP for fisheries restoration projects in the
Russian River. This has until now not been considered as a beneficial
use of the PVP for the Water Contractors and their ratepayers. It proposes
a 6/8 weighted vote by WAC members for approval.
This new language ( at 2.4[b] ) conforms to and expands upon the unvetted
and premature proposal (approved Oct. 4 by the SCWA/Board of Supervisors
[4-1 vote]) to plan to operate the Potter Valley Project and use the waters
diverted from the Eel River to the Russian River to benefit upper Russian
River water users and restoration efforts for chinook salmon in the Russian
River. This proposal ("Management and recovery of California coastal
chinook salmon") was approved with no cost disclosures, no environmental
review, nor involvement of Eel River stakeholders, despite the continued
damages to threatened salmonid populations in the Eel River caused and
exacerbated by the very same water diversions.
SCWA's proposal represents a substantial expansion of SCWA's mission
in the Restructured Agreement for Water Supply, and passes on the blank
check for the Water Contractors and ratepayers to sign. If approved
and inserted into the Restructured Agreement, SCWA's proposal will require
Water Contractors (even dissenters) and their ratepayers to commit to
yet hundreds of millions of dollars of undefined costs to serve SCWA's
schemes. It would attempt to put SCWA in the driver's seat to supply
water to upper Russian River water users and new Mendocino County developers
at Water Contractor ratepayers' expense, by putting itself in control
of Eel River diversions through the Potter Valley Project. SCWA is still
not even proposing to return water to the Eel River for her dying fisheries
and Humboldt, Lake and Mendocino economies.
FOER proposes simple, clear language with protections for Water Contractors,
ratepayers and the Eel River.
In response to issues raised by Water Contractors including North Marin
Water District, Windsor, and Sonoma, and concerns raised over the years
by many members of the public and officials in Humboldt, Mendocino, Sonoma
and Marin Counties, Friends of the Eel River is proposing a much clearer
alternative.
FOER Proposal:
Section 2.4 Potter Valley Project
Notwithstanding any other provision in this agreement, the Agency shall
not acquire or operate all or any part of the Potter Valley Project nor
shall the Agency enter into any acquisition or operating agreement for
all or any part of the Potter Valley Project that may involve any financial
contributions from the Water Contractors without the prior unanimous approval
of the Water Advisory Committee. Prior to any such approval, the financial
costs, environmental impacts, and legal liabilities associated with acquisition
and/or operation of the Potter Valley Project shall be disclosed in writing
to the Water Contractors and the public, and a specific project to acquire
and/or operate all or part of the Potter Valley Project must be described
and evaluated in an environmental impact report pursuant to the requirements
of the California Environmental Quality Act.
SCWA proposal
See
pdf for tracked changes, 11/22/05, as presented to the WAC on Dec. 5,
2005.
Underlined text is new.
2.4 Potter Valley Project
(a) All or part of the Potter Valley Project may be acquired upon a determination
by the Board of Directors of the Agency that such acquisition is necessary
to insure the Agency's continued ability to make the water deliveries
authorized by this Agreement and maintain fisheries and other incidental
benefits to the Russian River basin, provided, however, that no part
nor all of the Potter Valley Project shall be acquired using revenues
from any charge set forth in Section 4.1(a) without the affirmative
vote of at least six (6) representatives of the Water Contractors on the
Water Advisory Committee representing at least two-thirds of the total
weighted votes as calculated pursuant to Section 5.3(a). The Agency
shall not be liable to any of its Customers for any damage resulting from
any Agency decision regarding the acquisition or non-acquisition of any
part or all of the Potter Valley Project.
(b) The Agency shall commence a process upon the effective date of
this Agreement to evaluate the water supply and fisheries benefits provided
by the Potter Valley Project within the Russian River watershed, the economic
and operational feasibility of acquiring the Potter Valley Project, and
whether alternative actions could reduce the need for the Agency to acquire
the Potter Valley Project. Alternative actions to be evaluated may include
the increased use of recycled water to reduce agricultural and other diversions
from the Russian River and its tributaries; the modification of instream
flow requirements in the Russian River; and the completion of state and/or
federal recovery plans for salmonid species listed as threatened or endangered
in the Russian River watershed. The cost of such evaluations shall be
paid from Watershed Planning and Restoration Sub-Charge funds available
pursuant to subsection 4.14; however, the Agency shall use its best efforts
to obtain the agreement of other interested parties who divert water from
the Russian River or its tributaries (including municipal and agricultural
diverters) to pay for a portion of such costs and to participate in the
implementation of such alternative actions.
(c) Upon determination by Agency that other actions could reduce the
need for the Agency to acquire the Potter Valley Project, the Agency
and the Water Contractors shall engage in a cooperative process to implement
said other actions.
SCWA: Also need conforming changes to Section 4.14(b) below:
(b) The aggregate amount of money to be received by the Agency from the
Watershed Planning and Restoration Sub-Charge in each Fiscal Year shall
be sufficient to produce water sale revenues to cover the Agency's reasonable
estimate of costs for such Fiscal Year (net of funding provided by other
sources, including the Russian River Projects Fund and the Agency’s
General Fund) of carrying out: (1) fishery mitigation, enhancement, and
environmental compliance activities and projects undertaken by the Agency,
including the Agency’s costs of complying with the Endangered Species
Act or any other applicable federal, state, or local environmental statute
or regulation, if such activities, projects, and costs are reasonably
necessary, to enable the Agency to provide water to Regular Customers
under this Agreement; (2) the activities and evaluations undertaken
pursuant to Section 2.4(b); and (3) actions, studies or projects authorized
pursuant to Section 2.8 of this Agreement that are not covered by other
funding sources and contributions. The Agency shall not use proceeds from
the Watershed Planning and Restoration Sub-Charge to pay for the capital
cost or operation and maintenance cost of recreation facilities.
-------------------------------------
All excerpts from the existing final draft Restructured Agreement
for Water Supply relating to the Potter Valley Project and Eel
River:
Part 1.2 Definitions
1.2 (e) "Common Facilities" means all Transmission System facilities
except Storage Facilities and Aqueduct Facilities, but including... the
Potter Valley Project or portion thereof if acquired pursuant to Section
2.4.
1.2 (s) "Operations and Maintenance Costs" means the Agency's
costs of operating the Transmission System including its power costs,
costs of maintaining the Transmission System in a good state of repair,
payments made to the owner of the Potter Valley Project to insure the
continued operation of the Potter Valley Project provided they are annually
approved by the Water Advisory Committee, ["WAC"] regardless
of whether or not such payments result in the ultimate transfer of title
to all or part of the Potter Valley Project to the Agency,..."
1.2 (w) "Potter Valley Project" means Federal Energy Regulatory
Commission ["FERC"] Project No. 77.
1.2(jj) "Russian River Projects Fund" means the fund established
by the Agency to pay or partially pay for: ...
(4) the acquisition of all or part of the Potter Valley Project or contributions
made to the Project owner to insure the continued operation of all or
part of the Project; and (5) fishery mitigation and enhancement projects
undertaken by the Agency in the Russian River and Eel River and their
tributaries.
1.2 (pp) "Transmission System" means the Agency's water production,
storage, treatment and transmission facilities, including but not limited
to the ... Aqueducts..., and the Potter Valley Project, if acquired by
the Agency pursuant to Section 2.4.
Part 2: Planning, Financing, Acquisition, Construction, Operation and
Maintenance
2.4 Potter Valley Project
All or part of the Potter Valley Project may be acquired upon a determination
by the Board of Directors of the Agency that such acquisition is necessary
to insure the Agency's continued ability to make the water deliveries
authorized by this Agreement, provided, however, that no part nor all
of the Potter Valley Project shall be acquired without the prior approval
of the Water Advisory Committee [note: this decision making is conducted
by weighted voting. See 5.3]. The Agency shall not be liable to any of
its customers for any damage resulting from any Agency decision regarding
the acquisition or non-acquisition of any part or all of the Potter Valley
Project.
Part 4: Charges and Payments
4.5 Payment of Remaining Facilities, Additional Facilities, Replacement
Facilities, and Potter Valley Project Capital Costs
(a) The Capital Costs of Remaining Facilities, Additional Facilities,
replacement facilities, and Potter Valley Project,... shall be paid by
the Agency with cash available pursuant to Sections 4.2, 4.6, and 4.8,
subdivision (b) of Section 4.11, and, if the Board of Directors of the
Agency decides to issue Revenue Bonds, with the proceeds from the sale
of Revenue Bonds. The Agency may sell Revenue Bonds to the extent necessary
to pay for said Capital Costs, to establish bond reserves and to pay all
expenses incurred in the issuance of such bonds.
4.14 Operations and Maintenance Charge - Watershed Planning and Restoration
(b) The aggregate amount of money to be received by the Agency from the
Watershed Planning and Restoration Sub-Charge in each Fiscal Year shall
be sufficient to produce water sale revenues to cover the Agency's reasonable
estimate of costs for such Fiscal Year... of carrying out: (1) fishery
mitigation, enhancement, and environmental compliance activities and projects
undertaken by the Agency, including the Agency's costs of complying with
the Endangered Species Act or any other applicable federal, state, or
local environmental statute or regulations, if such activities, projects,
and costs are reasonably necessary, to enable the Agency to provide water
to Regular Customers under this Agreement; and (2) actions, studies or
projects authorized pursuant to Section 2.8 [Watershed Planning and Restoration]
of this Agreement that are not covered by other funding sources and contributions...”-
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