Wilson to Seek Merger of 2 Water Systems : Government: Governor wants to put the federal Central Valley Project and State Water Project under California’s control. He hopes for an agreement ‘within six months.’

Gov. Pete Wilson announced Thursday that he will seek negotiations with the Bush Administration for California to take over the federal government’s vast Central Valley Project irrigation system and merge it with the state’s water system.

The governor said he will appoint a team of representatives to start negotiations with officials of the Bush Administration with the goal of reaching an agreement “within six months.”

Conceived as a state water system, the Central Valley Project was built by the federal government. It was begun during the Depression when the state could not find sufficient financing. Proposals for the state to take over the project, which is the largest supplier of water in the state, have surfaced ever since and have recently gained momentum.

In Washington, spokesman Steve Goldstein of the Interior Department indicated that the Bush Administration is willing to start talks but warned that the sale price will be hefty. “There would have to be a fair dollar value as all the American taxpayers have contributed to pay for the (project),” he said.

Wilson acted as the finishing touches were being put on a bill in Washington that would reallocate portions of Central Valley Project water away from its primary agricultural users and channel it for protection of embattled fish and wildlife. The proposal has prompted strong protests from Central Valley farmers.

The governor’s action triggered criticism from the influential Natural Resources Defense Council, among others, as a last-minute attempt to divert attention from the “more urgent issue--the imminent congressional vote on legislation to restore Californian’s fish and wildlife.”

But Wilson asserted that only when both the state’s water system and the federal project operate “uniformly and under the same rules” will California meet the needs of agricultural, environmental, municipal and industrial waters users in a “balanced and integrated fashion.”

Union of the two systems would deliver more than a quarter of all developed water in California, based on present production. The Central Valley Project delivers 20% of current supplies, the State Water Project 7%.

“Such an agreement is of the highest importance to California’s future well-being,” Wilson said in a letter to Sen. J. Bennett Johnston (D-La.), chairman of the Senate Energy and Natural Resources Committee and lead author of the bill to reallocate Central Valley Project water.

At the same time, Wilson promised to “vigorously” oppose the Johnston bill on grounds that it would “unnecessarily and severely” damage the state’s faltering economy by “pitting environmental protection efforts against our need for food and fiber and jobs.”

The governor’s water advisers have been at work for a year trying to fashion a new California water policy that would seek to deal with the growing population and demands for orderly planning. It is expected to be announced next month.

Construction of the sprawling Central Valley Project started in 1935 and its first stages were finished in 1951. The network of Northern California reservoirs, including picturesque Lake Shasta, and southbound canals generate relatively small amounts of hydroelectricity but enormous volumes of low-cost water, which flows chiefly to farmers in the San Joaquin and Sacramento valleys and to municipal-industrial users in parts of the San Francisco Bay Area.

Operated by the Bureau of Reclamation, the project has been under fire virtually from its inception for delivering subsidized water to farmers at the expense of other users. In more recent years, its operation has been heavily criticized by environmentalists for allegedly running roughshod over fish and wildlife habitats, particularly spawning salmon.

The project operates virtually side by side with the State Water Project, a state government operation that transports surplus northern water to cities in the south. Both projects share the same Sacramento-San Joaquin Delta collecting pool.

For many California water interests, including environmental protection organizations, a transfer to the state of the federal water and plumbing of the Central Valley Project has long been an elusive dream. Basically, it would put the state in full control of its water resources instead of a shared responsibility with the federal government.

But environmental critics oppose Wilson’s move toward negotiations because they see it as a way to delay other federal legislation.

Negotiations to take over and merge the water delivery systems could be a nightmare. The state is strapped for cash while the takeover and operation of the federal project would be very expensive. Some $1.5 billion still is owed on construction costs.

Even if Wilson’s negotiations are successful, assumption by the state of the federal water works likely would take years.

In the letter, Wilson told Johnston that he is dedicated to restoring the “good health” of fish and wildlife in the Central Valley, but restoration would fail “if legislation to protect fish and wildlife works as a blunt instrument against the other legitimate interests of the citizens of California.”

In a states’ rights appeal, Wilson said California “consistently has insisted that its authority to establish water rights not be compromised by federal legislation.”

Wilson did not name his proposed negotiators, who he said would meet with officials of the Interior Department and its Bureau of Reclamation. However, a spokesman for Resources Secretary Douglas P. Wheeler indicated that Wheeler likely will lead the effort.

Spokesman Andy McCloud said the Wilson Administration has not firmed up arrangements with the Bush Administration for a negotiating schedule. “Those communications are being made,” he said.

In addition to the Johnston bill, a second bill by Sen. Bill Bradley (D-N.J.) also would affect water distribution in California.

“For the governor to say he wants to improve the environment and then use his influence to block the Bradley and Johnston water reform bills is hypocritical at best,” said Hal Candee, a senior attorney with the Natural Resources Defense Council.

Candee said Wilson’s environmental advisers have “him calling for more balanced water allocations and freer water transfers” while “his agribusiness supporters want him to block every water proposal. So, he announces his opposition to the most important water reform bills in years and then pretends he is doing so for the sake of the environment.”

Wilson also may find himself at odds with the powerful Metropolitan Water District of Southern California. MWD General Manager Carl Boronkay--always searching for new sources of water--is urging the agency’s directors to support, in principle, the Johnston legislation because “significant provisions . . . could be beneficial to Metropolitan.”

Boronkay wrote in a letter this week that the Johnston bill would make available to municipal and industrial users as much as 100,000 acre-feet a year for the highest bid.

Times staff writer Glenn F. Bunting contributed to this report from Washington.