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April 26, 2018 Mr. Armando Quintero, Chair California Water Commission P.O. Box 934836 Sacramento, CA 94236 Re: California Water Commission Grant Opportunity Proposition 1 Water Storage Investment Program Dear Chair Quintero and Members of the Commission, We are pleased to support the Inland Empire Utilities Agency (IEUA) in its development of The Chino Basin Conjunctive Use Environmental Water Storage Exchange Program (Chino Basin Project) grant application, submitted to the California Water Commission in response to the Funding Opportunity for the Water Storage Investment Program (WSIP). As the possibility of another prolonged drought faces California, new water sources and creative methods to provide guaranteed water to the Delta is critical. Water purveyors must work regionally and across the retail agency and state water contractor level to provide water for the environment and increasing populations throughout the state. The Chino Basin Project would guarantee a dedicated, new water source for the Delta which is climate-independent and would be available during dry, critically dry and successive dry years. This project will construct an advanced water treatment facility and distribution facilities to store up to 15,000 acre-feet of recycled water per year in the Chino groundwater basin. In partnership with an existing State Water Project Contractor (SWPC), the stored water would be pumped into the SWPC distribution system in lieu of the SWPC taking water from Lake Oroville for use in southern California. The water would be held in Lake Oroville until it is needed for environmental benefits, when it could be used in blocks of 50,000 acre-feet to create pulse flows mimicking storm events during dry and critically dry years. All water from this project will be dedicated for the Chinook salmon in the Delta and will

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April 26, 2018 Mr. Armando Quintero, Chair California Water Commission P.O. Box 934836 Sacramento, CA 94236 Re: California Water Commission Grant Opportunity Proposition 1 Water Storage Investment Program Dear Chair Quintero and Members of the Commission, We are pleased to support the Inland Empire Utilities Agency (IEUA) in its development of The Chino Basin Conjunctive Use Environmental Water Storage Exchange Program (Chino Basin Project) grant application, submitted to the California Water Commission in response to the Funding Opportunity for the Water Storage Investment Program (WSIP). As the possibility of another prolonged drought faces California, new water sources and creative methods to provide guaranteed water to the Delta is critical. Water purveyors must work regionally and across the retail agency and state water contractor level to provide water for the environment and increasing populations throughout the state. The Chino Basin Project would guarantee a dedicated, new water source for the Delta which is climate-independent and would be available during dry, critically dry and successive dry years. This project will construct an advanced water treatment facility and distribution facilities to store up to 15,000 acre-feet of recycled water per year in the Chino groundwater basin. In partnership with an existing State Water Project Contractor (SWPC), the stored water would be pumped into the SWPC distribution system in lieu of the SWPC taking water from Lake Oroville for use in southern California. The water would be held in Lake Oroville until it is needed for environmental benefits, when it could be used in blocks of 50,000 acre-feet to create pulse flows mimicking storm events during dry and critically dry years. All water from this project will be dedicated for the Chinook salmon in the Delta and will

Proposition 1 Support Letter April 26, 2018 Page 2 not be available for local use for 25 years. Based upon historic hydrologic conditions, this would deliver an important ecological benefit in the Bay-Delta watershed in approximately thirty percent of all years, with a focus on improved ecological flow benefits in dry and critical years. In this way, the project is designed to provide the capacity to deliver ecological flow benefits during the years when the system most needs these benefits. We are excited to be a part of this important program that increases partnerships between agencies in northern, central, and southern California to sustainably manage our water supplies and the needs of the environment. We look forward to providing assistance to IEUA and ensuring the success of this project. Sincerely,

John Bosler Josh Swift Assistant General Manager General Manager Cucamonga Valley Water District Fontana Water Company

Todd M. Corbin Mark N. Kinsey General Manager General Manager Jurupa Community Services District Monte Vista Water District

Water Consultant City of Chino Hills cc: Halla Razak, General Manager, IEUA

Sylvie Lee – Manager of Planning and Environmental Resources, IEUA Jason Gu – Manager of Grants, IEUA

April 26th, 2018 Honorable Members of the Water Commission P.O Box 942836 Sacramento, CA 942236 Subject: Prop.1 grants should include groundwater storage Dear Commissioners, The Nature Conservancy is submitting this letter to showcase the opinion editorial that was featured in Capitol Weekly on April 19th, 2018.

Prop.1 grants should include groundwater storage BY JAY ZIEGLER AND KIRSTEN JAMES

In the coming weeks, the California Water Commission is set to announce its comparative ratings of proposed water storage investments, allocating up to $2.7 billion in taxpayer dollars that will shape the State’s future water storage strategy and help us through future droughts. Most attention has been directed at surface storage projects such as Sites Reservoir and the Los Vaqueros Reservoir, which are widely expected to receive funding from Proposition 1. These kinds of surface storage projects are more effective if they are operated as part of an integrated storage and water management strategy. At this moment, California is only beginning to come to terms with a groundwater overdraft crisis that has drained the very aquifers we have come to depend on for water supply. In the bigger picture, the Water Commission has the opportunity to create a new paradigm for water storage that delivers more cost-effective storage and an ability to ensure there will be enough water for communities, business and public purposes –keeping our rivers alive with enough water for fish, wildlife and recreation for people. That opportunity is to include groundwater storage in Proposition 1 allocations. At this moment, California is only beginning to come to terms with a groundwater overdraft crisis that has drained the very aquifers we have come to depend on for water supply – especially across the San Joaquin Valley. Various economic analyses have demonstrated that the costs of groundwater storage projects are substantially lower over time than the development of new dams for surface storage. Groundwater projects can also be completed much faster than surface storage projects at a fraction of the cost.

That is why both environmental organizations and businesses support groundwater storage as a way to secure California’s water resiliency. Lower cost – and the ability to manage water stored in groundwater basins more flexibly over time — are huge benefits. Groundwater storage projects can be managed in a way that specifically dedicates water to be left in streams for environmental flows – and to measure specific water allocations for environmental purposes. Several proposed groundwater storage projects, including some of the highest scoring ones in the state’s process of allocating Proposition 1 funding, have been designed to leave water behind in already existing upstream reservoirs including Lake Shasta and Lake Oroville to benefit flows for fish and wildlife. Two projects: the Sacramento Regional County Sanitation District’s South County Ag Groundwater Project in the Cosumnes River Basin and the Chino Basin Water Bank in San Bernardino County, would store water in the ground and then dedicate and measure water provided to keep our rivers alive by protecting water for nature. These groundwater storage projects represent a new direction in California water management that can be used in a complementary way with some 50 million acre-feet of existing water storage capacity in reservoirs operating today. Ultimately, the Commission’s funding decisions should drive and shape more effective water conservation and water accounting strategies across California. In allocating funds for multiple projects, the CWC has the ability to help shape a flexible “block” of water assets that can be used to dynamically respond to environmental water needs across the state from the headwaters and tributaries to the Delta and at the same time meet the needs of communities and businesses. To do that, the CWC must confront California’s overall water imbalance. Simply put, we are using more water than we have available – both groundwater and surface water. The increased water supply uncertainties introduced by climate change – and the need to protect rivers and streams for wildlife and people underscore the importance of durable, integrated and less expensive groundwater storage projects as an essential part of a new storage paradigm. — Jay Ziegler is director of external affairs and policy for The Nature Conservancy. Kirsten James is director of California policy and partnership, Ceres. Respectfully,

Jay Ziegler Director, External Affairs & Policy The Nature Conservancy

April 26, 2018

Armando Quintero, Chair California Water Commission P.O. Box 942836 Sacramento, CA 94236-0001 Re: SUPPORT - Sacramento Regional County Sanitation District’s South County Ag Groundwater Project, the Chino Basin Water Bank, and the Willow Springs Water Bank

Dear Chairman Quintero:

We are writing on behalf of The Nature Conservancy, Trout Unlimited, American Rivers, and the Environmental Defense Fund to express our support for the following groundwater storage and conjunctive use projects: the Sacramento Regional County Sanitation District’s South County Ag Groundwater Project in the Cosumnes River Basin, the Chino Basin Water Bank in San Bernardino County and the Willow Springs Water Bank Conjunctive Use Project in Kern County. These groundwater storage projects are an essential part of a new storage paradigm in an era of climate change. The projects can be operated with existing (and other) conventional storage projects.

California is only beginning to come to terms with a groundwater overdraft crisis that is draining the very aquifers we have come to depend on for water supply – especially across the San Joaquin Valley. Various economic analyses have demonstrated that the cost of groundwater storage projects is substantially lower over time than the development of new dams. Groundwater projects can also be delivered much faster than surface storage projects at a fraction of the cost of surface storage projects. The lower cost and short implementation timeline allows groundwater projects to provide highly reliable water to be dedicated for ecosystem benefits much sooner than other projects. The immediacy of the realization of ecosystem benefits is specifically important at a time in which our Central Valley Salmon counts are at or approaching record lows.

These groundwater storage projects can be managed in a way that dedicates water to be left in streams for environmental flows – and to measure specific water allocations for environmental purposes. The projects represent an effort to store water in the ground and then both dedicate and measure water provided to keep our rivers alive by protecting water for nature.

The projects represent a new direction in water management that can be used in a complimentary way with some 50 million-acre feet of existing water storage capacity in reservoirs we have online today. The Water Commission has the opportunity to support new storage projects that are cost-effective and have

an ability to measure water for public purposes – especially to provide enough water for fish, wildlife, and recreation for people.

We urge the Water Commission to adopt a final Public Benefit Ratio that reflects the projects’ significant potential benefits and to award the projects with an appropriate share of funding.

Sincerely,

Jay Ziegler Director, External Affairs and Policy The Nature Conservancy

Steve Rothert California Regional Director American Rivers

Pablo Garza CA Political Director, Ecosystems Environmental Defense Fund Brian J. Johnson California Director Trout Unlimited

April26,2018ArmandoQuintero,ChairCaliforniaWaterCommissionP.O.Box942836Sacramento,CA94236-0001Re:SUPPORT-InlandEmpireUtilitiesAgencyChinoBasinConjunctiveUseEnvironmentalWaterStorage/ExchangeProgramDearChairmanQuintero:WearewritingonbehalfoftheentireCaliforniasalmonfishingindustrytoexpressoursupportforfundingfortheInlandEmpireUtilitiesAgencyproposaltotheCommission.TheIEUAprojectcouldprovidehighprioritybenefitsforBay-Deltasalmonruns.Specifically,theprojectcouldprovideneededdryandcriticalyearpulseflowsforoutmigratingjuvenilesalmonontheFeatherRiver.TheGoldenGateSalmonAssociationrepresentstheentireCaliforniasalmonfishingindustry,includingcommercial,partyboatandrecreationalfishing,salmonrelatedbusinesses,restaurants,aNativeAmericantribeandthemanyfamiliesandcommunities,bothcoastandinland,thatrelyontheBay-Deltasalmonrun,California’slargest.ThePacificCoastFederationofFishermen’sAssociationsrepresentscommercialfishinginterests,includingportandfishermen’smarketingassociations,withmembersfromSanDiegotoAlaska.IEUA’sproposalcomesatacriticaltimeforourindustry.ThepastdecadehasseenthetwogreatestcrisesinthehistoryofCalifornia’siconicsalmonfishery.From2008-2009,oursalmonfisherywasshutdown,puttingtensofthousandsofpeopleoutofworkandcausingeconomicimpactsofmorethanabilliondollarsperyear.Inrecentyears,thedroughtandpoorwatermanagementhascausedanotherdecline,resultinginaseverelyrestrictedsalmonseasonin2017and2018.Thisdiresituationrequirespromptactionandcreativity.TheCWCprocessprovidessuchanopportunity.However,weurgetheCommissiontobecautious

GGSAandPCFFAre.IEUAProposalApril26,2018P.2andtofundonlyprojectsthatpromisecredibleenvironmentalimpacts,withlowriskofadditionalenvironmentalharm.TheIEUAprojectmeetsthistest.SummaryofRecommendations:Atyourupcomingmeeting,weurgetheCWCtotakethefollowingactionsregardingtheIEUAapplication:

• RaisetheIEUAPBRtoreflectthefollowingspecificrecommendations.• Donotreject“realworld”watertransferprices,infavorofmodeledfuture

prices.• Determinewatertransferpricesinthespringof2018.• IntegratefullimplementationofSGMA-includingmeeting1-2MAFof

potentialnewagriculturaldemandfortransfers–intoprojectionsoffuturetransferprices.

• AnalyzetheperformanceofthefederalwateracquisitionsprogramsforbothsalmonandforwildliferefugessincethepassageoftheCVPIA.Inparticularly,focusontheeffectivenessoftheseprogramsinprovidingincrementalLevel4refugesuppliesandsupplementalwaterforsalmonthroughvoluntarywateracquisitions.

• IntegrateintoyouranalysisoftheIEUAproposalthelowriskofunintendedenvironmentaldamagefromtheproject.

• IntegrateSJR7andotherstatemandatestorestoresalmonintoyourfinalfundingdecision.

WeofferthefollowingdetailedcommentsandrecommendationsregardingtheIEUAproposalandtheCWCreviewofthatproposal.Specific,HighPriorityEcosystemBenefits:IEUAproposestodedicateenvironmentalwatertoprovidedryandcriticalyearspringpulseflowsforsalmonfromOrovilleDamontheFeatherRiver.TheFeatherisformerlyoneofCalifornia’sgreatsalmonproducingrivers.However,ithasbeenhighlydegradedbywaterdevelopmentandthelossofhistoricfloodplains.DWRhascommittedtoanambitioushabitatrestorationprogram,oncetheOrovilleFERClicenseisrenewed.However,webelievethatoneofthemissingcomponentsinthatagreementisamechanismtoensurethatpulseflowsareprovidedwhenspringrunandfallrunjuvenilesalmonarereadytomigratetotheocean.Suchpulseflowsspeedoutmigration,increaseturbidity,decreasepredationlosses,increasefloodplaininundationandexpandfoodproduction.Thesepulseflowscanproducemore,largerandhealthierjuvenilesalmon,withagreaterchanceofsurvivingtoadulthood.PulseflowsontheFeatherwouldbenefitnaturallyreproducingfallrunandspringrunsalmonandsteelhead,aswellasthetwomillionhatcheryraisedspringrunandtheonemillionhatcheryraisedfallrunsalmonthataretargetedbyhatcherymanagersforreleaseintheFeatherRiverbasin.

GGSAandPCFFAre.IEUAProposalApril26,2018P.3Followingrequestsfromourorganizations,DWRrecentlyprovidedapulseflowontheFeather,toassistintheoutmigrationofjuvenilehatcheryraisedspringrunsalmon.TheIEUAprojectcouldprovideamechanismtoprovidereliable,highprioritypulseflowsintheyearswhentheyaremostdifficulttoobtain.

TransfersasanAlternativetotheProposedProject:TheCWC’seconomicreviewersfound,indevelopingtheinitialdraftPBR,that:“voluntarywatertransferscouldbeusedtoprovidethesametimingandamountofwaterasprovidedbytheCBEWP.”Westronglydisagreewiththisconclusion.Infact,thefederalprogramcitedbyCWCreviewersclearlysupportsourposition.

Staff’sApril20responsetoIEUA’sappealofthedraftPBRstatesthat“(t)heWaterAcquisitionProgram,implementedbytheU.S.BureauofReclamationandtheU.S.FishandWildlifeService,hasoperatedfortwentyyears,andotherpurchaseprogramsintherecentpast….demonstratethatsuchprogramsarefeasible.”(P.3).However,staff’sanalysisdoesnotdiscusstheperformanceoftheseprogramsindetail.WeurgetheCWCtoexaminethesefederalwaterpurchaseprogramscarefully.Theyclearlydemonstratethatrelianceonvoluntaryagreements,ratherthandedicatedwatersupply,isfarlesseffectiveatprovidingecosystembenefits.

CVPIAProgramtoAcquireWaterforSalmon:OnekeyfederalwateracquisitionprogramistheCentralValleyProjectImprovementActvoluntarywaterpurchaseprogram(Sec.3406(b)(3))toprovidebenefitsforfishandwildlife,includingsalmon.TheCVPIARestorationFundprovidesapotentialfundingsourceforthisprogram.However,overthepast25years,thisprogramhasfailedtoprovidesignificant,reliablebenefitsforsalmon.

TheoverallCVPIAAnadromousFishDoublingProgramfailedtodoublenaturallyspawningsalmonproductionby2002,asrequiredbytheAct.Yetdespitethislackofprogress,DOIhasnotsuccessfullyusedthewateracquisitionprogramtohelpmeettheneedsofsalmon.Oneofthoseneeds,inadequatespringflowsindryyears,hasbeenwellknowfordecades.Certainly,DOIcanbefaultedfornotmaximizingtheeffectivenessofthisprogram.However,overthepast25years,thisacquisitionprogramhasfailedtoprovidesignificantbenefitsforsalmon.Inparticular,ithasfailedtoprovidethespringpulseflowbenefitsproposedbythisprogram.

Level4RefugeSupplyProgram:TheotherkeyDepartmentoftheInteriorCentralValleywateracquisitionprogramisintendedtoprovidetheincrementalLevel4refugewatersuppliesrequiredbytheCVPIA.Thisprogramhasreliedlargelyonshorttermtransfers.Asaresultofthisreliance,InteriorfaileddramaticallytomeettheCVPIArequirementtoprovidefulllevel4suppliesby2002.From2007-2015,

GGSAandPCFFAre.IEUAProposalApril26,2018P.4thisprogramhasprovidedlessthanonethirdoflegallymandatedincrementalLevel4refugesupplies.Overthepast25years,wetlandsandwaterfowladvocateshaverepeatedlyadvocatedforlong-termagreements.Nevertheless,theprogramhaslargelyfailedtoprovidelegallyrequiredwetlandwatersupplies.Inresponse,waterfowlandwetlandsadvocatesworkedcloselywiththeContraCostaWaterDistricttoprovideadedicatedsupplythroughtheproposedexpansionoftheLosVaquerosReservoir.In2016,agroupofwateragencies,incollaborationwiththesesamewetlandsadvocates,alsosuccessfullylaunchedtheNorthValleyRegionalRecycledWaterProgram,whichwillprovidededicatedLevel4refugewatersupplies1.Inthisway,theIEUAproposaltodedicatewatertosalmonneedsissimilartotheContraCostaWaterDistrictproposaltodedicatewatertowetlandandwaterbirdneedsthroughtheproposedLosVaquerosexpansion.

EnvironmentalWaterAccount:TheEWArepresentsanotherefforttoprovidenewenvironmentalbenefitsthroughvoluntarytransfers.Unfortunately,thiseffortalsoprovedtobeunsuccessful.Infact,thereisevidencethatthisprogramitselfresultedinunintendedenvironmentaldamage.Asaresultofthispoorperformance,theEWAwasdiscontinued.

Simplyput,overthepast25yearsofexperienceintheCentralValley,compellingevidencehasemergedthatvoluntarytransfersarenotaseffectiveinprovidingpulseflowsforsalmonastheIEUAproposalwouldbe.Itistruethatsomewaterusershavebeenmoresuccessfulinobtainingbenefitsfromvoluntarywatertransfers.However,thepastquartercenturyofexperienceintheCentralValleyhasshownthatvoluntarytransfersarefarlesseffectiveinprovidingenvironmentalbenefitsthanthededicationofwatertospecificenvironmentalbenefits.

FutureTransferPrices: WeagreewithIEUA’sresponsestotheconclusionsoftheeconomicreviewersregardingfuturepricesregardingvoluntarytransfersandofferthefollowingadditionalperspectives.

Webelievethateconomicreviewershavesignificantlyunderestimatedfuturetransferprices.Infact,webelievethatrisingpriceswillcreateadditionalnewobstaclestoprovidingecosystembenefitsthroughvoluntarytransfersinthefuture.Inparticular,reviewersrespondingtotheIEUAappealfoundthat2014and2015representedan“extremedrought”andthatthewatertransferpricespaidduringthoseyearsarenotpredictiveoffutureprices.Wedonotbelievetheserealworldpricesshouldberejected,infavorofpricespredictedbyamodel.Fortunately,theCWChasanopportunitytovalidateourconcerns.Weunderstandthattransferpricesearlyin2018remainhigh.WeurgetheCWCtoinvestigatethis,asitcould

1RecycledwaterprojecttohelpWestSidereachesmilestone.ModestoBee.May6,2016.http://www.modbee.com/news/article76197747.html

GGSAandPCFFAre.IEUAProposalApril26,2018P.5testthereliabilityofthemodelusedbyreviewers,withregardingtofuturetransferprices.Inaddition,asSGMArequirementsarefullyimplemented,CentralValleywateruserswillseekwaystoeliminateanaverageannualgroundwateroverdraftof1-2MAF.Thiswillinevitablyincreasecompetitionforwater,raisepricesandincreasetheculturalobstaclestotransferringwaterawayfromagriculturaluses.Thus,theSGMAprogram,badlyneededthoughitis,islikelytosignificantlyincreaseaveragewatertransfercostsandcreatenewobstaclestotransfersforecosystempurposes.LowRiskofUnintendedEnvironmentalImpacts:Californiahasalonghistoryofstorageprojectsthathavecausedsevereenvironmentaldamage,particularlytoourcriticalsalmonruns.Infact,someofthesestorageprojects,suchasontheTrinityRiver,weresoldtothepublicinsignificantpartonthebasisofclaimedenvironmentalbenefits.Inrealitythosebenefitshavebeenillusory.Claimsofenvironmentalbenefitsfromproposedstorageprojectsarenotnew.WethanktheCWCforcarefulanalysistoensurethatclaimedbenefitsfromtheprojectsyoufundarecredible.IEUAproposestogeneratewatertobenefittheenvironmentbydevelopingSouthernCaliforniawaterrecyclingandgroundwaterstorage.Thisapproachtostoragesignificantlyreducestheriskofunintendedenvironmentalimpactsfromgeneratingnewenvironmentalwater.Thisisimportant,becausetheCWCcanonlyfundprojectsfornetenvironmentalbenefits.Oneofthebestwaystoensurenetenvironmentalbenefitsistodesignstorageprojectsthatgenerate“new”waterinamannerthatavoidsinitialenvironmentalimpacts.TheIEUAprojectdoesthis.ThisapproachisnotsharedbyallproposalstotheCWC.Otherproposedprojectswouldgeneratewaterthroughlargediversionsfromimportantsalmonproducingsystems.Ithesecases,beforeitcanassesspotentialecosystembenefits,theCWCmustcontendwiththepotentialecosystemimpactsoftheseproposedprojects.Thelongrecordofenvironmentaldamagefromstorageprojectshighlightstheimportanceofthistask.Bygeneratingwaterthroughrecyclingandgroundwaterstorage,IEUA’sproposaldramaticallyreducestheuncertaintyassociatedwithevaluatingpotentialimpactsfromtheproject,makingthetaskofassessingpotentialbenefitsmorestraightforwardandlessuncertain.RequiredExchangeAgreements:ItisimportanttonotethatthereareafewareaswhereadditionalagreementsandanalysisarerequiredfortheIEUAprojecttosucceed.Specifically,thisprojectreliesonexchangeswithMWDandDWR,todeliveranticipatedsalmonbenefit.WearepleasedthatMWDhaswrittenaletterofsupportfortheproject.Inaddition,theStateWaterBoard’ssalmondoubling

GGSAandPCFFAre.IEUAProposalApril26,2018P.6requirementfortheBay-Delta,aswellasSJR7,whichurgesstateagenciestomakesalmonrestorationapriority,giveDWRstrongdirectiontoenterintoanagreementtoprovideFeatherRiverspringflowsforsalmon.TheprojectalsoshouldenterintoanagreementwiththeCVPtoensurethatthewaterreleasedpursuanttothisproject,andprotectedbySection1707(Seediscussionbelow)isnotrecapturedbytheCVPthroughreoperationofShastaDam,FolsomDamorotherfacilities.Andfinally,IEUAproposestoenterintoanagreementorprogramregardingthecontinuedreleaseofwatertotheSantaAnaRiver.OurorganizationslookforwardtoworkingwithIEUAtoobtaintheseagreements.ProtectingInstreamFlows:TheprojectapplicationindicatesthatthepulseflowsreleasedfromOrovilleDamwouldbeprotectedunderSection1707.WerecommendthatthisSection1707protectionbeextendedthroughtheDelta,wheretheseaddedflowswouldprovideadditionalbenefits.(Thisactionwouldalsoassistintheimplementationofnewdryandcriticalyearoutflowstandards,whenthoseneededstandardsareadoptedbytheStateBoard.)Ifthepublicpaysforthiswater,itshouldbeusedtoprovideenvironmentalbenefitsallthewaytotheBay.However,iftheSection1707protectionsdonotpreventrecaptureofthiswaterasitpassesthroughtheDelta,thenanyrecaptureshouldbecarefullymodeledandmonitored,andthecostallocationbetweenpublicandprivatebenefitsshouldbeadjustedaccordinglyWebelievethattheCWCscheduleallowsadequatetimefortheseagreementsandadditionalanalysisbeforethefinalallocationofProposition1funds.EconomicValueoftheSalmonFishery:WearepleasedthattheCDFWandCWCreviewupheldtheincreasedemigrationbenefitthattheprojectwouldprovide.However,wearedisappointedthattheCWCreviewreducedtheeconomicvalueofthisbenefitfromIEUA’sclaimed$215.8millionto$76.0million.Weunderstandthatthisvaluationisbasedonalternativemethodstoprovidethisbenefit.(Seediscussionabove.)However,weurgetheCWCtoconsidertheeconomicvalueoftheCaliforniasalmonfisheryandtheimportanceofSacramentoBasinfishtothatindustry.Attachedisa2012analysisbySouthwickAssociatesthatconcludesthattheeconomicvalueoftheCaliforniacommercialandrecreationalsalmonfisheriesfrom2004-2006was$1.4billionperyear,withanemploymentbenefitof23,000jobs.Thevalueofafullyrestoredfisheryissignificantlygreater.Thevastmajorityofthesalmoncaughtbythestate’ssalmonfishingindustryareproducedbytheSacramentoBasin,includingtheFeatherRiver.

GGSAandPCFFAre.IEUAProposalApril26,2018P.7Thevulnerabilityofthisindustryishighlightedbythe2008-2009closureofsalmonfishinginCalifornia.Weare,today,experiencinganothersalmoncrisis,withlowprojectedadultsalmonpopulationsandseverelylimitedfishingseasons.UnlesspromptandeffectiveactionistakentorestoreSacramentoBasinruns,permanentdamagetothefishingindustry,andthecommunitiesandfamiliesitsupports,couldresult.StateMandatesforSalmonRestoration:WealsoencouragetheCWCtoconsiderthemultiplestatemandatesforsalmonrestoration.Inparticular,lastyear,theCalifornialegislaturepassedSJR7,whichencouragesstateagencies,includingtheCWC,tomakecollaborativesalmonrestorationahighpriority.TheIEUAproposalrepresentsjustsuchanopportunity.WaterUserBenefits:Finally,itisimportanttonotethatthisprojectwouldalsoprovidemultiplebenefitsforwaterusers,inadditiontosalmon.ItwouldcreateanewclimateanddroughtresistantlocalSouthernCaliforniawatersupply.Thisnewwatersourcewouldprovideemergencysupplybenefits,aswellasimprovedwaterquality.Thus,thisprojectdemonstratesthatitispossibletodesignstorageprojectsthatprovidesignificantenvironmentalandwateruserbenefits.However,asinthiscase,thosestorageprojectswilllooksignificantlydifferentfrom,andwillbeoperatedsignificantlydifferentfrom,traditionalwaterstorageprojects.WeurgetheCWCtoadoptafinalPublicBenefitRatiothatreflectstheproject’ssignificantpotentialbenefitsandtoawardtheprojectwithanappropriateshareoffunding.GGSAandPCFFAcongratulateIEUAfordevelopingacreative,21stcenturywaterstorageproject.Sincerely,

JohnMcManus NoahOppenheimGGSA PCFFACc:HallaRazak,IEUA