MWD Delays Vote on Buying Water

Fearful that a hasty decision could lead to a debacle like energy deregulation, board members of the Metropolitan Water District of Southern California pulled back Monday from a $1-billion deal to buy water from a private landowner and make consumers, for the first time, pay market rate prices.

MWD General Manager Ronald Gastelum had hoped a key committee would back a 50-year deal with the Santa Monica-based Cadiz Land Co., setting the stage for approval by the full board today.

Instead, the Water Planning and Resources Committee delayed a vote for at least a month to make sure consumers are protected against the shortages and fluctuating costs now hitting utility companies and their customers.

Gastelum and other MWD senior officials say the Cadiz deal is needed to compensate for cutbacks in how much the state can take from the Colorado River, its main source of imported water.

Urging a delay, MWD board member Jorge Castro, representing the city of Los Angeles, said the utility deregulation deal “was done in haste at 3 a.m. in [state Sen.] Steve Peace’s office. We don’t need haste like that.”

Gastelum had hoped to win approval for the Cadiz deal so he could report to U.S. Interior Secretary Bruce Babbitt that the deal is on the verge of being sealed.

Babbitt plans next week to ratify an agreement between seven states that depend on the Colorado River that would be advantageous to California.

Babbitt has insisted that, in exchange, California has to find other sources of water and better ways of storing and conserving water.

“It’s clear from the [committee] discussion that the energy debacle is in everybody’s mind,” Gastelum said. “While I would have liked approval today . . . this board is going to want to look at this as long as it takes to become comfortable.”

What the board will need to be comfortable with is a half-century deal to pump water from a giant aquifer on the eastern edge of San Bernardino County and to use the aquifer to store surplus water from the Colorado River until it is needed in dry years.

The aquifer is beneath land owned by Cadiz, an agribusiness firm whose president, Keith Brackpool, is a political confidant and contributor to Gov. Gray Davis.

Environmental groups, including the Sierra Club, insist that pumping water from the aquifer will imperil the desert’s fragile ecosystem, including a population of bighorn sheep, and may cause dust storms.

MWD staff and Cadiz officials have devised an electronic monitoring system to warn if the aquifer is being depleted. Still, there is nothing in the agreement to assure that pumping would be halted if the ground water begins to drop.

“We don’t feel the public interest is adequately represented,” Sierra Club official David Czamanske told the board.

While several board members said they wanted further details on the environmental concerns raised by Czamanske, more were concerned about the economic consequences to consumers of cutting such a high-priced deal with a private company.

“There’s a lot of concern among water folk that they move very cautiously and not make the same kind of mistakes that are in the power deal, which is terrible,” said board member Mark Watton, representing San Diego County.

The Cadiz deal is similar to two other storage programs the MWD is pursuing in the Palm Springs area. But the other deals involve public agencies and have not created the same controversy.

MWD officials, including Gastelum, insisted that they have anticipated the problems that occurred with energy deregulation.

For example, while consumers would pay market rates for water, there is a cap on how much rates could increase in any given year. Also, there is a mediation process to determine what is a market rate.

“In this year, Californians are very mindful of the unprotected risks of the market,” said Tim Blair, the MWD official who did the financial analysis.

Adan Ortega, top assistant to Gastelum, said later that the Cadiz deal is fundamentally different from energy deregulation because water, unlike energy, can be stored and is not a day-to-day commodity. Also, the decision-making process has been different, he said.

“This has been a very open and public process,” Ortega said. “That we didn’t see in the energy deregulation.”

The MWD is interested in the Cadiz deal and the two other programs because Southern California is under federal orders to begin preparing for the day when its allocation from the Colorado River will be reduced.

By law, California is assured of 4.4 million acre-feet a year from the Colorado River, 85% of which goes to three agricultural irrigation districts in the desert.

To serve the growing population of coastal Southern California, the MWD has depended for years on annual allocations of surplus water from the Colorado. Last year, for example, the MWD received an additional 800,000 acre-feet from the Colorado.

But the days of receiving such surplus allocations are numbered as Arizona and Nevada begin to demand their full share of the river.

Under an agreement between the seven states that share the Colorado, California will have 15 more years of surplus.

As a result, the MWD is on the prowl for new sources of water and for places to store surplus water received in the next 15 years for use possibly decades later. To MWD officials, the Cadiz deal seems to fit both needs.

Babbitt plans to ratify the surplus criteria deal next week, just days before the end of the Clinton administration.

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Water From the Desert

A Santa Monica company is proposing to pump millions of gallons of water from beneath the Mojave Desert and sell it to the Metropolitan Water District of Southern California.