Uniting the Central Valley Project and the State Water Project Would Benefit All Water Users

An accident of history has left California with two massive, overlapping water projects: the federally operated Central Valley Project (CVP) and the State Water Project (SWP) operated by the California Department of Water Resources. Maintaining and operating two projects that serve the same purpose is inefficient. Moreover, the projects are often beset by controversy and conflict when state and federal administrations change.

California set out to build the CVP in the late 1920s but could not finance it due to the Great Depression. The federal government stepped in and began construction of the CVP in 1935 with Shasta Dam-which created the state's largest reservoir-as its anchor. In 1960, state voters passed the Water Resources Development Act, which funded construction of the SWP. This project included Oroville Dam, which created its capstone reservoir, and the California Aqueduct, which provides water to southern California.

These projects fulfill the same objectives: water supply for farms and cities, hydropower generation, and flood risk reduction. They serve customers from Redding to San Diego, including the Bay Area and the Central Valley. State and federal law requires the two projects to coordinate their efforts, and at times they cooperate successfully. But CVP and SWP often find themselves at odds, especially when federal policies revise (and sometimes reset) the rules governing coordinated operations and endangered species protection. These kinds of changes have been issued by the past seven federal administrations, headed by both Democratic and Republican presidents.

These recurring changes have created uncertainty in the timing and amount of water deliveries. This impacts project contractors and water users alike, affecting everything from choosing what crops to plant to planning and funding costly infrastructure investments that improve supply reliability for cities and farms. These changes also generate public controversy and litigation, hindering collaborative problem solving, which is the best approach to resolving California's most thorny water problems.

As numerous PPIC reports have pointed out, managing for increasing drought intensity and climate volatility is going to require extraordinary effort and cooperation at all levels, including dedication to the efficient use of all available resources. Although SWP and CVP share a modest amount of surface storage, the two projects maintain different reservoir systems, separate points of diversion and places of use, mostly separate conveyance infrastructure, sometimes conflicting rules governing water transfers and groundwater storage, and separate planning, science and monitoring, and operations personnel.

To cope with a changing climate and declining reliability of water supply, California and the federal government need to consider fully integrating the two projects. This would allow for more efficient water storage and distribution, improved water markets, increased groundwater banking and recharge, and better and more consistent environmental protection. Most important, an integrated system is needed to better harvest and store surplus water during wet periods.

The operational benefits of uniting the SWP and CVP have been known for decades. Previous PPIC reports (Hanak et al., 2011 and Mount et al. 2018) recommended that a nonprofit public benefit corporation be created to manage the assets and water rights of both the CVP and SWP. Operations could be modeled after the California Independent System Operator (ISO) that manages the state's electrical grid. The new public benefit utility would be regulated by the state and federal governments to protect water quality and endangered species, as well as to ensure compliance with existing water rights and water allocation priorities. But this consolidated project would not be government-run-removing the conflict inherent in the government serving as both operator and regulator.

The creation of this utility would be accompanied by a top-to-bottom review of governance, dam safety, operating plans, and environmental regulations, with the goal of improving the efficiency of water storage, water supply, and achievement of environmental objectives. This would include more durable permits that would minimize the costly uncertainty that comes with frequent changes in administrations and regulatory policies.

Such a major change may be difficult to imagine. But it is worth remembering that reforming groundwater management in California was politically unfeasible until two years into the 2012-2016 drought, when the California legislature passed the Sustainable Groundwater Management Act-the most significant water legislation in a generation, if not the past century. Merging the SWP and CVP into a public benefit utility would be equally significant; it would provide the efficiency and flexibility to better manage water supplies and the environment into the future. For the 27 million Californians and 4 million acres of irrigated farmland that rely on water from these projects, this merger is worth imagining-and then acting on.