DWR Admits that State Water Contractors Have an Out

On July 3rd, 2018, the Senate Committee on Natural Resources and Water held an informational hearing to discuss the Department of Water Resources (DWR) Overview of the Proposed Contract Amendments Between the DWR and the State Water Project Contractors.

DWR’s proposed “contract extension” amendments are highly premature. DWR has not responded to major public concerns, completed an environmental review, or provided the complete new terms - terms that will apply until 2085. Under the misleading label of an “extension”, DWR proposes to redefine what State Contractors are obligated to pay for - potentially putting them on the hook for significant new debt. Contractors may be obligated to fund expanded capital costs with no improvement of delivery reliability or increase in allocation. 

DWR was questioned by state agencies and representatives. Representing the DWR were its director, Karla Nemeth, and the former deputy director Carl Torgerson.

Representing Santa Barbara was Senator Hannah Beth Jackson. The video below highlights an exchange between Sen. Jackson and Mr. Torgerson where it is revealed that State Contractors are not required to extend their contracts or accept the new amendments.

When Mr. Torgerson says "…they could just rely on their existing contract." he appears to be referring to what's known as the "Evergreen Clause" of the State Water Project contract (Section 4. Options for Continued Service). With six months written notice, "…the Agency may elect to receive continued service after expiration of said term…" under the existing terms of the contract.