Loading...
HomeMy WebLinkAboutAgenda Packet - January 28, 2013 - UB AZUSA. SIGHT &''ATER AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AZUSA LIGHT & WATER JANUARY 28, 2013 729 N. AZUSA AVENUE 6:30 P.M. AZUSA, CA 91702 AZUSA UTILITY BOARD ANGEL CARRILLO CHAIRPERSON URIEL E. MACIAS JOSEPH R. ROCHA VICE CHAIRPERSON BOARD MEMBER KEITH HANKS ROBERT GONZALES BOARD MEMBER BOARD MEMBER 6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board • Call to Order • Pledge to the Flag • Roll Call A. PUBLIC PARTICIPATION 1. (Person/Group shall be allowed to speak without interruption up to five (5) minutes maximum time, subject to compliance with applicable meeting rules. Questions to the speaker or responses to the speaker's questions or comments shall be handled after the speaker has completed his/her comments. Public Participation will be limited to sixty (60) minutes time.) 1 B. UTILITIES DIRECTOR COMMENTS C. UTILITY BOARD MEMBER COMMENTS D. CONSENT CALENDAR The Consent Calendar adopting the printed recommended action will be enacted with one vote. If Staff or Councilmembers wish to address any item on the Consent Calendar individually, it will be considered under SPECIAL CALL ITEMS. 1. Minutes. Recommendation: Approve minutes of regular meeting on November 26, 2012 as written. 2. Minutes. Recommendation: Approve minutes of special meeting on December 17, 2012 as written. E. SCHEDULED ITEMS 1. Approval of Power Sales Agreement (PSA) with Southern California Public Power Authority (SCPPA). Recommendation: Authorize approval of two Power Sales Agreements (PSA) with Southern California Public Power Authority (SCPPA) for long term purchase of energy, capacity, and environmental attributes from two solar projects as proposed for development by Silverado Power. 2. Possible Nomination of an Alternate Board Member to the San Gabriel Basin Water Quality Authority (WQA). Recommendation: Acting in its dual capacity as City Council, consider whether the Utility Board wishes to nominate a candidate for alternate to the WQA Board of Directors for the next four year term; and if yes, approve a resolution similar in form to sample below: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA NOMINATING COUNCIL MEMBER TO REPRESENT CITIES WITH PRESCRIPTIVE PUMPING RIGHTS AS AN ALTERNATE BOARD MEMBER ON THE BOARD OF THE SAN GABRIEL BASIN WATER QUALITY. 3. Approval of Scope of Work for Request for Proposals (RFP) and Authorization to Issue RFP for Solid Waste Disposal Analysis. Recommendation: Approve attached Scope of Work and authorize staff to issue Request for Proposals from consultants to analyze solid waste disposal options for the City of Azusa. F. STAFF REPORTS/COMMUNICATIONS 1. San Juan Project Update (Verbal) 2. Status Report on Azusa's 2012 RPS Energy Deliveries 3. California Municipal Utilities Association's (CMUA) "Cost of Mandates" Study 2 4. Federal Legislative Update by Morgan Meguire LLC 5. Watermaster Presentation: Impact of Critical Habitat Designations on the San Gabriel Valley Water Supply G. ADJOURNMENT 1. Adjournment. "In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a city meeting, please contact the City Clerk at 626-812-5229. Notification three (3) working days prior to the meeting or time when special services are needed will assist staff in assuring that reasonable arrangements can be made to provide access to the meeting." "In compliance with Government Code Section 54957.5, agenda materials are available for inspection by members of the public at the following locations: Azusa City Clerk's Office - 213 E. Foothill Boulevard, Azusa City Library- 729 N. Dalton Avenue, and Azusa Light& Water-729 N.Azusa Avenue,Azusa CA." 3 APPROVED Date , 1 ? /?0! soc2 • ALUSA -.CMT 8 k'4TEA SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF TH. • USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITI `% DATE: JANUARY 28, 2013 SUBJECT: POSSIBLE NOMINATION OF AN ALTERNATE BOARD MEMBER TO THE SAN GABRIEL BASIN WATER QUALITY AUTHORITY (WQA) RECOMMENDATION: Staff recommends that the Utility Board, acting in its dual capacity as City Council, consider whether it wishes to nominate a candidate for alternate to the WQA Board of Directors for the next four year term. If yes, Staff recommends that a resolution, similar in form to the attached,be approved by the Utility Board. BACKGROUND: The San Gabriel Basin Water Quality Authority (WQA) was established in 1993 to initiate and oversee water treatment programs in the areas of the San Gabriel Valley that have been designated as Superfund sites by the United States Environmental Protection Agency (EPA). The Superfund sites overlie groundwater that has been contaminated by years of industrial dumping of various solvents and other contaminants. The WQA operates under the direction and oversight of a seven (7) member board consisting of: one member each from the three overlying municipal water districts (Upper San Gabriel Valley MWD, San Gabriel Valley MWD, and Three Valleys MWD); one member representing a city without prescriptive pumping rights; two members representing water producers in the Main San Gabriel Groundwater Basin; and one member representing a city that has prescriptive pumping rights. The City of Azusa is a city that has prescriptive water pumping rights and is also a water producer in the Main San Gabriel Groundwater Basin. The WQA provides oversight to six "operable units" for clean-up in the San Gabriel Basin. For information, none of the operable units involve clean-up to water in the direct vicinity of Azusa Light & Water wells or facilities. Due to a vacancy on the WQA Board arising from the expiration of the four year term of the representative for cities with prescriptive water rights, the City of Azusa cast its votes for sole 015 Water Quality Authority January 28,2013 Page 2 nominee Luis Ayala, a City of Alhambra Councilman, representing a city with prescriptive water rights, to fill the WQA seat for the next four year term. At the time of this vote, there was no candidate for the Alternate WQA Board member representing cities with prescriptive pumping rights who would fill the seat on the Board at times when the sitting Board member was absent. Attached to this Scheduled Item Report are a January 17, 2013, letter from WQA concerning the need to elect an Alternate Board member in an April 17, 2013 election; the Call For Nominations; a Sample Resolution to be used by the Utility Board / City Council to nominate a Councilmember to run for the position of Alternate Board Member; and the Procedures For Calling and Conducting Elections of City members and Alternates From Cities With Pumping Rights and From Cities Without Pumping Rights to The Board of the San Gabriel Water Quality Authority [sic]. FISCAL IMPACT: There are no known fiscal impacts associated with nominating a candidate for WQA Alternate Boardmember. Prepared by: Chet F. Anderson, P.E. Assistant Director—Water Operations 016 4 San Gabriel Basin Water Quality Authority 1720 W.Cameron Avenue.Suite 100.West Covina.CA 91790•626-33145555 • Fax 626.33N-5775 7 Ca rkq' January 17,2013 rr t: 2 City Manager City of Azusa 213 East Foothill Blvd. Azusa,CA 91702 RE: Nomination to Fill Vacancy for the San Gabriel Basin Water Quality Authority Alternate Member Representing Cities with Pumping Rights Dear City Manager: This past year the San Gabriel Basin Water Quality Authority(WQA) conducted an election to fill the vacancy of the Board Member and Alternate Member representing cities with pumping rights on the Board of the WQA. The election resulted in only one nomination;therefore the Alternate position remains vacant. The WQA Board has decided to conduct a special election to fill the vacancy of the Alternate Member. Under section 508 of the San Gabriel Basin Water Quality Authority Act("WQA Act")a vacancy now exists on the WQA Board of Directors for the Alternate Member representing cities with pumping rights. Under the WQA Act,a vacancy in the office of a member or alternate who was elected by cities shall be filled by a special election called by the WQA.Nominations and balloting are conducted in the same manner as a regular election,except that the date of the election and other time periods shall be as prescribed by the WQA. (WQA Act §134-508). The WQA Board has called a special election to fill the vacancy for April 17,2013 at 12:00 PM at the WQA offices. Nominations must be received between January 22,2013 and February 19,2013. Nominations must be made by resolution of the city council of the nominating city. A city is not limited to nominating members of its own council,but may nominate a city council member from any city with pumping rights. The cities with pumping rights are as follows: Alhambra Arcadia Azusa Covina El Monte Glendora Industry Irwindale Monterey Park Monrovia South Pasadena Whittier 01 '7 A city is not required to submit a nomination and may vote whether or not it has submitted a nomination. Enclosed please find a"Call for Nominations"form,sample resolution, and adopted election procedures. Please read through the enclosures and forward copies to your council members. Any resolution of the city council making a nomination must be received by the WQA prior to 5:00 PM on February 19,2013. To ensure that the Authority receives your nominations,the resolution must be sent by certified mail FedEx or UPS with a "denature required"to our offrce. Nominations received before or after the nomination period will not be accepted. After nominations are received a ballot will be sent to each city voting for an alternate member representing cities with pumping rights,by February 22,2013. If you have any questions,please contact me at the telephone number or at the email address listed below. SAN GABRIEL BASIN WA r=' QUALITY • THORITY 7 / w Step.: .'e A.Moreno (626)338-5555 stephanie@wga.com Enc. 018 CALL FOR NOMINATIONS FOR ELECTION OF CITY ALTERNATE MEMBER FROM CITIES WITH PUMPING RIGHTS TO THE BOARD OF THE SAN GABRIEL BASIN WATER QUALITY AUTHORITY CITY: AZUSA TO THE CITY COUNCIL: An election to fill the vacancy in the office of the alternate city member of the Board of the San Gabriel Basin Water Quality Authority("the Authority")from cities with pumping rights will take place at the regularly scheduled meeting of the Board of the Authority set for April 17, 2013 at 12:00 p.m.,at 1720 W. Cameron Ave., Suite 100,West Covina,California. Nominations for candidates for an alternate city member elected by cities with pumping rights may be made by any city with pumping rights. Each city may nominate only one candidate. The member shall be a City Council member or Mayor from a city with pumping rights. An alternate member acts in the place,and performs all the duties,of the city member selected by the same cities if that city member is absent from a meeting of the Authority or has vacated his or her office until the vacancy is filled pursuant to the provisions of San Gabriel Basin Water Quality Authority Act. No person who,directly or indirectly,at the time of election,receives, or during the two- year period immediately preceding election received, 10 percent or more of his or her income from any person or public entity subject to regulation by,or that received grants from or contracts for work with,the Authority may serve as a member of the Authority. Your city may nominate one candidate by resolution of the City Council. Your nomination must be submitted to the Authority by March 25.2013 at 5:00 P.M. 019 (SAMPLE RESOLUTION) RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ,CALIFORNIA NOMINATING COUNCILMEMBER TO REPRESENT CITIES WITH PRESCRIPTIVE WATER PUMPING RIGHTS AS AN ALTERNATE MEMBER ON THE BOARD OF THE SAN GABRIEL BASIN WATER QUALITY AUTHORITY WHEREAS,the San Gabriel Basin Water Quality Authority("WQA") is governed by a Board of Directors composed of seven(7)members,one of which is elected by cities with pumping rights in the San Gabriel groundwater basin;and WHEREAS,under authority of§508 of the WQA Act,the WQA Board of Directors has declared the position of alternate director representing cities with pumping rights to be vacant and has called a special election for the purpose of filling the vacancy in the office of alternate member representing cities with pumping rights; and, WHEREAS,the City of is one of the cities in the San Gabriel Basin with pumping rights,entitled to vote for an alternate member representing cities with pumping rights; WHEREAS,the City of may,by resolution submitted to the San Gabriel Basin Water Quality Authority before March 25,2013,nominate a candidate for the office of alternate member representing cities with pumping rights. NOW THEREFORE,THE CITY COUNCIL OF THE CITY OF CALIFORNIA DOES HEREBY FIND,DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The City Council of the City of nominates an elected member of the City Council of ,as a candidate for the office of alternate member of the San Gabriel Basin Water Quality Authority representing cities with pumping rights. PASSED,APPROVED AND ADOPTED this day of 2013. 020 PROCEDURES FOR CALLING AND CONDUCTING ELECTIONS OF CITY MEMBERS AND ALTERNATES FROM CITIES WITH PUMPING RIGHTS AND FROM CITIES WITHOUT PUMPING RIGHTS TO THE BOARD OF THE SAN GABRIEL WATER QUALITY AUTHORITY 1. Definition. • "Authority"means the San Gabriel Basin Water Quality Authority. "Board"means the San Gabriel Basin Water Quality Authority Board,which is the governing body of the Authority. "City"means a city which partially or entirely overlies the Main San Gabriel Basin or a city which has,or may acquire,the right to pump water from the basin. "Cities with pumping rights"means cities which have pumping rights in the basin in accordance with the judgment and includes the Cities of Alhambra,Arcadia,Azusa, Covina,El Monte,Glendora,Industry,Irwindale,Monrovia,Monterey Park, South Pasadena,and Whittier. "Cities without pumping rights"means cities which do not have pumping rights in the basin in accordance with the judgement and includes the Cities of Baldwin Park,Bradbury, Duarte,La Puente,La Verne,Rosemead,San Dimas,San Gabriel,San Marino, Sierra Madre, South El Monte,Temple City and West Covina. "Judgment"means the judgment,as amended or as it may be amended,of the Superior Court in and for the County of Los Angeles in Upper San Gabriel Valley Municipal Water District v.City of Alhambra(Case Number 924128). "Main San Gabriel Basin"or"basin"means the groundwater basin underlying the land within the boundaries of the Authority. 2. City Members of the Board-Number and Oualifications. a). There shall be two members,and two alternates,of the Board of the Authority which are elected by the cities. One member,and one alternate,shall be elected by the cities with pumping rights. One member,and one alternate,shall be elected by the cities without pumping rights. b). An alternate member gi,atl act in the place,and perform all the duties,of the city member selected by the same cities if that city member is absent from a meeting of the Authority or has vacated his or her office until the vacancy is filled pursuant to the provisions of SB 1679 as set forth below. 021. b). At least 120 days preceding the meeting at which the election is to be held,the Authority shall send,by certified mail-return receipt requested,a Call for Nominations to the city council of each city with pumping rights. Such Call for Nominations shall be prepared in accordance with the sample attached as Exhibit "A1" c). Nominations for candidates for a city member elected by cities without pumping rights may be made by any city without pumping rights. Each city may nominate only one candidate. d). At least 120 days preceding the meeting at which the election is to be held,the Authority shall send,by certified mail-return receipt requested,a Call for Nominations to the city council of each city without pumping rights. Such Call for Nominations shall be prepared in accordance with the sample attached as Exhibit"A-2". e). Nominations shall be made by resolution of the city council of the nominating city.All nominations shall be submitted to the Authority at least 60,but not more than 90 days preceding the meeting at which the election is to be held. 7. Ballots. a). The Authority shall compile all nominations which were received from the cities with pumping rights and shall prepare a ballot listing all nominated candidates in accordance with the sample ballot attached as Exhibit"B-1". b). The Authority shall compile all nominations which were received from the cities without pumping rights and shall prepare a ballot listing all nominated candidates in accordance with the sample ballot attached as Exhibit"B-2". c). Each ballot shall indicate the number of votes which the city is entitled to cast. d). At least 45 days before the meeting at which the election is to be held,the Authority shall distribute,by certified mail-return receipt requested,the ballots to each city eligible to vote in the election. 8. The Election. a). Each city shall cast all of its votes for one candidate,by resolution of the city council. The resolution casting the city's votes shall be delivered to the Authority at least 24 hours before the meeting of the Board at which the election is held. Any resolution not received by the Authority 24 hours before the election may not be counted. b). At the Meeting at which the election is held,the Board of the Authority shall cause the votes to be counted. The candidate receiving the highest number of 022 Cities with Pumping Rights 2010 Census Data City 2010 Population It of Votes Alhambra 83,089 8 Arcadia 56,364 6 Azusa 46,361 5 Covina 47,796 5 El Monte 113,475 11 Glendora 50,073 5 Industry 219 1 Irwindale 1,422 1 Monrovia 36,590 4 Monterey Park 60,269 6 South Pasadena 25,619 3 Whittier 85,331 9 Total votes 64 SB 1679,Article 5.Sec.505(a) Each City has one vote for each 10,000 residents or majority fraction thereof,as determined by the most recent U.S.decennial census data. 023 • F ON AZUSA INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F.MORROW,DIRECTOR OF UTILITIES, DATE: JANUARY 28,2013 SUBJECT: CMUA'S"COST OF MANDATES"STUDY Over the past year,the California Municipal Utilities Association has been studying the impact and cost of an increasing number of mandates to electric utilities from legislation and regulations emanating from state and federal authorities. CMUA commissioned a study by Navigant to estimate the total cost and electricity rate impacts of more than 35 recent or proposed mandates. The draft results of this study indicate that six mandates alone could cost the customers of California's publicly-owned utilities$1.5 billion by 2015,$2 billion by 2020 and over$3 billion by 2030--per year! CMUA members accept the mandates already codified into law,but recommend that legislators &regulators slow down the implementation of new laws/regulations until the utilities(and their customers)have had time to digest the laws already on the books. Specifically,CMUA recommends a seven part course of action: 1. Provide Time to Implement and harmonize Existing mandates Before Adding New Ones 2. Consider Impacts on the Whole Electric System 3. Policies Should Be"Technology Neutral" 4. Articulate Individual Policy Goals;Allow Implementation Options 5. Costs of Existing Mandates Must Be factored in if New Ones Proposed 6. Consider Existing Infrastructure and Contracts When Evaluating New Policies 7. Allow Local Innovation A further explanation of these key recommendations is included on the attached documents. Prepared by:George F.Morrow,Director of Utilities (129 Recent Existing and Proposed Mandates on Electric Utilities in California Recent Existing State Mandates Renewable Portfolio Standard (33% RPS) - SB 1X 2 Feed in Tariffs (FIT) Cap and Trade Program —AB 32 Renewable Auction Mechanism (RAM) Once-Through Cooling (OTC) Policy Net Energy Metering (NEM) —AB 920 California Emission Performance Standards - SB 1368 Energy Efficiency — AB 2021 Mandatory Greenhouse Gas Emissions Reporting Waste Heat and Carbon Emissions Reduction Act — Regulation (MRR) AB 1613, AB 2791 Transmission Access Charge (TAC) Resource Adequacy— AB 380 California Solar Initiative (CSI) Transmission Corridors — SB 1059 New Solar Homes Partnership (NSHP) Energy Storage — AB 2514 Solar Incentive Program — SB 1 Smart Grid Deployment —SB 17 Self-Generation Incentive Program (SGIP) AB 32 Administrative Fee Recent Proposed or Potential State Mandates Increased Renewable Portfolio Standard (RPS) Long Term Capacity Requirements Requirements Distributed Generation (DG) Requirements Delta Flow Criteria - SB 7X 1 Recent Existing Federal/Regional Mandates Wall Street Transparency and Accountability Act of Cross-State Air Pollution Rule (CSAPR) 2010 FERC Order 1000 NERC/WECC Reliability and Cyber Security Standards Regional Haze/Best Available Retrofit Technology (BART) Recent Proposed or Potential FederaURegional Mandates Federal Renewable Portfolio Standard (RPS) or Clean Energy Standard (CES) Coal Combustion Residuals Rule Proposed Revisions to the New Source Performance Federal Cap & Trade /Carbon Tax Standards (NSPS) Cooling Water Intake Rule (Clean Water Act Section National Ambient Air Quality Standards (NAAQS) 316b) Utility Maximum Achievable Control Technology (MACT) Rule 0 3 0' Ju4 MANDATES a III IIIIt 400 CMUA Recommendations on Recent Mandates on Electric Utilities and Their Customers California leads the nation in moving to a more sustainable long-term use and supply of electricity.California municipal utilities support these policies;however,the manner in which utilities and their customers are to achieve these policies is becoming increasingly difficult to implement. In just the past few years,state and federal agencies have enacted more than 20 major mandates affecting electric utilities and their customers.Requiring higher levels of renewable energy resources;eliminating once-through cooling for power plants;cap-and-trade requirements for greenhouse-gas emissions(GHG);changes to Delta outflow requirements impacting hydropower;and technology-specific requirements and incentives are only a few examples. The California Municipal Utilities Association(CMUA)and its members remain supportive of the state's energy policy goals and do not advocate repeal of any existing statutes.We are committed to implementing requirements that achieve the goals and that minimize and manage the cost to electricity consumers.We further believe that policy makers benefit by being made aware of the potential financial and operational impacts and that this awareness will lead to policies that avoid consumer backlash to rapidly increasing costs. Although the recently enacted mandates are expected to bring environmental and other benefits in coming years,they present significant operational and management challenges to utilities and their customers.As an example,some California O utilities face replacing well over 50 percent of their existing power supply in a decade,many years before the end of the commercial lives of the generators. It can and will be done,but the challenge of doing so while facing new,highly prescriptive U additional mandates could overwhelm the ability of the utilities to successfully achieve this shift and of customers'will to pay for them. 2 U As municipal utilities,we support the shift to a more sustainable use and supply of electricity.We are also mindful the cost Oof providing electricity to California consumers will increase significantly over the next several years. Cost increases are due Cy to several factors,including the unavoidable need to replace aging infrastructure,but the many recent mandates to achieve environmental and other policy objectives also contribute to this increase. CMUA recommends a course of action that offers adequate time and tools to integrate existing and future requirements while keeping customer costs manageable,before new and ever-more prescriptive requirements are adopted.We propose the following seven recommendations: 1. Provide Time to Implement and Harmonize Existing Mandates Before Adding New Ones. CMUA supports the need for federal and state governments to establish appropriate energy policies,with which local publicly-owned utilities comply.However,many individual mandates have been changed multiple times since they were enacted(e.g. RPS)and other existing and potential mandates remain unclear(e.g.Delta Flow,Distributed Generation and future changes to carbon cap-and-trade). This uncertainty is particularly difficult because utilities already operate in a shifting economic climate in the state. (131 CMUA sees a critical need for time to allow the industry,market,and utilities to implement the current set of new laws and regulations before more are added or existing ones are revised.The impact-both to operations and costs-of recent mandates is not yet fully known. Integration of the required resource and operational changes should be allowed to occur before additional mandates or requirements are added.Experience gained in integrating current RPS provisions will guide how any future policy changes can be incorporated. 2. Consider Impacts on the Whole Electricity System. California policy-makers,including legislators,regulators and other decision-makers,should consider the cumulative effects of electricity policies-both proposed and existing-within the context of the whole electricity system as new policies are added.Too often,individual policies are created without regard to their effect on the broader electricity system.For example,mandating the addition of large amounts of variable renewable resources to the existing electricity system creates a need for additional generation sources that can be ramped up and down quickly to fill in or"firm"these variable resources.This"firming"generation will likely be natural gas-fired,which can be difficult to get permits for on the same aggressive timetable as the renewables and which may conflict with other state environmental policies such as GHG reduction or local air district rules. 3. Policies Should Be"Technology Neutral." State and federal policies should be technology neutral.Policies should specify the criteria and goals to be achieved(e.g.an amount of GHG reduction),and then allow all technologies that can meet that criteria to be eligible.Technology-specific mandates unfairly determine technology winners and losers in the marketplace and severely limit flexibility, innovation and opportunities for minimizing utility customer costs and environmental implications. 4. Articulate Individual Policy Goals;Allow Implementation Options. Policy-makers should clearly articulate the main goals of individual policies. For instance,do they aim to reduce GHG emissions or air pollution?Are they seeking economic development or diversity of supplies?Do they have an eye on long-term sustainability or price risk mitigation? Policy-makers should consider and evaluate other options which may achieve the same purposes or goals at lower costs. Lastly,policies and their goals should be"performance based,"allowing flexibility to develop implementation options to maximize benefits and minimize costs. 5. Costs of Existing Mandates Must Be Factored in if New Ones are Proposed. It is essential that policy-makers recognize that while these mandates meet desirable goals,they also come with increased costs to California business and residential utility customers.The tangible environmental benefits must be contrasted with the cumulative costs in the current economy,when further laws and regulations are considered.Even though customers have expressed their support for renewable power,they have not yet experienced the full rate impact of existing mandates and system improvements required to implement them.To meet the goals of the mandates,it is important to avoid utility customer rate backlash. 6. Consider Existing Infrastructure and Contracts When Evaluating New Policy. To prevent stranded electricity generation and transmission assets and the subsequent higher costs to consumers,when establishing new incremental energy resource-related policies and implementation requirements,policy-makers should allow utilities the flexibility to consider load growth,plant retirements and existing power and transmission contracts and obligations rather than date- certain,one-size-fits-all requirements.This will allow utilities to pursue existing and new goals and requirements in the most cost-effective manner. 7. Allow Local Innovation. It is vital for state and federal policy-makers to structure an energy policy framework that allows flexibility for the locally-elected governing boards of publicly-owned utilities to innovate,tailor solutions to local community needs,and minimize costs to consumers while achieving the policy goals.State and federal policies that are overly prescriptive and do not allow for local innovation or for meeting community-specific needs result in higher costs to utilities and utility customers. .. 032 A7CJSA 111111111111111111111111111111111111111F-- LIGHT d WATER INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITI DATE: JANUARY 28, 2013 SUBJECT: FEDERAL LEGISLATIVE UPDATE BY MORGAN MEGUIRE LLC Southern California Public Power Authority (SCPPA) contracts with Morgan Meguire LLC to monitor Federal legislation and regulations. These reports are provided monthly to SCPPA members. The start of the second term of President Barack Obama and the 113th Congress brings forth old and new agenda in areas that would likely impact the ratepayers in publicly-owned utilities. Some topics covered by attached "January" reports that might be of interest to the Utility Board include the following: • Congressional Update, including forming of a new government subcommittee on energy, climate caucus • Unfinished Business of the 112`h Congress, including the "fiscal cliff," tax treatment of municipal bonds, extension of Production Tax Credit (PTC) for wind power, tax credits for energy efficiency, and increased tax rates for capital gains and dividends • Grassroots Efforts in Opposing Taxing Municipal Bonds • Dodd-Frank Update, including Commodities Futures Trading Commission (CFTC) action on petition filed by American Public Power Association (APPA) and others for the relief from special entity sub-threshold for dealing with municipal utilities • Climate Change, including call for the President for more action specifically on carbon pollution and shifting to clean energy sources • Federal Agency Updates, including updates related to Federal Energy Regulatory Commission (FERC), North American Electric Reliability Corporation (NERC). Prepared by: Liza Cawte, Senior Administrative Technician Attachment: Morgan Meguire LLC January Report 033 Morgan Meguire LLC Memorandum TO: Bill Carnahan, Executive Director FROM: Lori J. Pickford, Executive Vice President DATE: January 8, 2013 RE: January Monthly Legislative Report I. Congressional Update - 113th Congress Begins At the outset of the 113th Congress, Rep. John Boehner(R-OH) was re-elected Speaker of the House with 220 votes. His re-election comes as no surprise, but 12 Republicans (none from California)either opposed him, voted present, or abstained. This shows the increasing challenge Boehner has in maintaining support of his party. All but five Democrats voiced their support for Nancy Pelosi (D-CA) to continue as Minority Leader—an improvement over 2011 when 20 Members declined to back her. All California Democrats voted for Pelosi. The same day, many Congressional offices –mostly incoming freshman– held open houses to receive family, constituents, and other visitors. Among other House Members, Morgan Meguire's Tom Porter visited the offices of California Democratic Reps. Raul Ruiz, who defeated Rep. Mary Bono Mack (R-CA), and Juan Vargas, who replaced Rep. Bob Filner(D- CA), to briefly introduce SCPPA. The offices were not yet fully staffed, but Morgan Meguire will be working to do a formal introduction to Members and energy aides in the coming weeks. New Government Reform Subcommittee on Enemy, Climate Caucus Formed House Oversight and Government Reform Committee Chairman Darrell lssa (R-CA)will establish a new subcommittee on energy policy, health care and entitlements in the 113th Congress. It will be chaired by Rep. James Lankford (R-OK). A committee spokesman said Republicans intend to continue investigating the energy provisions of the federal stimulus program and the DOE loan program, as well as the natural gas boom. Senate Environment and Public Works Committee Chairman Barbara Boxer(D-CA) is also forming a new caucus to work on legislation and a broader strategy on climate change. Boxer said her goal is to take advantage of the new attention the climate has gained after Hurricane 1 034 Sandy. The caucus is being formed "because people are coming up to me, they're really wanting to get into this," she told reporters on Dec. 11. "I think Sandy changed a lot of minds." The caucus will "work with all the committees and all the committee chairmen to make sure we can move forward legislation that reduces carbon pollution and also works on mitigation and all the other elements." she said. "There's a tremendous appetite on our side to do that." She said no Republicans have yet expressed interest, but Democrats are "sending out feelers." II. Unfinished Business from the 112th Congress Fiscal Cliff Avoided; More Battles Loom On Jan. 3, 2013, President Obama signed H.R. 8, the American Taxpayer Relief Act of 2012, a bill to avert the '`fiscal cliff," set to occur on January 1, 2013 had no agreement been reached. The agreement extends tax rates for all but the wealthiest Americans and pushes back the "sequester" spending cuts until March. On New Year's Eve, the bipartisan agreement passed the Senate by a vote of 89-8, with the House taking action in a late night 257-167 vote on Jan. 1. 2013. Sens. Dianne Feinstein (D-CA)and Barbara Boxer(D-CA) voted in favor of the bill. To see how your House Member voted, see the roll call breakdown. The final agreement was negotiated by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-KY) and, of primary importance to SCPPA and public power, does not include any restrictions on tax exempt financing. While no limits on the interest exclusion for municipal bonds were included in the final agreement, it is not a final win: Congress and the White House plan to address in 2013 measures to reduce the federal deficit, reform entitlements, and address tax reform. In March, Congress will need to address sequestration, the debt ceiling, and appropriations. It is in the context of all these discussions that tax-exempt municipal bonds will again, likely, be in play. APPA warned that the President's proposal to limit the deductibility of municipal bond interest to 28% was on the table during December negotiations and encouraged its members to weigh in with their Congressional delegations to keep the proposal out of the final deal. APPA and 19 other state and local associations also sent a Dec. 20 letter to the President and Speaker Boehner asking them not to change the tax treatment of municipal bonds. Morgan Meguire's Deborah Sliz and Lori Pickford highlighted this issue at SCPPA's Annual Board Meeting and Holiday luncheon in December urging Members to make this a high priority. In turn, Morgan Meguire prepared a legislative alert that was sent to SCPPA for members to request them to immediately contact Members of Congress to resist efforts to tax municipal bonds. This issue will be highlighted when SCPPA members come to Washington to meet with their congressional delegation in March 2013. 2 035 Other provisions in the final agreement of interest to SCPPA and the utility sector are tax incentives promoting renewable investments, energy efficiency, mass transit benefits and also electric vehicle infrastructure. Renewables The bill includes a one-year extension of the 2.2 cent per kWh Production Tax Credit (PTC) for wind power, through 2013. Additionally, Congress made a key change to allow eligible renewable projects that have begun construction by that date to qualify for the PTC, rather than just projects operational by the deadline. The PTC modification also applies to other renewable resources, such as closed loop biomass, geothermal, small irrigation power, qualified hydropower— including marine and hydrokinetics— and municipal solid waste. The timing change will be particularly helpful for projects such as hydropower and geothermal development, which need a longer lead time to site and place in service. The "begin construction" language change will also apply to projects, such as solar and fuel cells, which may elect the Investment Tax Credit (ITC) in lieu of the PTC. Energy Efficiency The final agreement extends throughout 2013, and makes retroactive for 2012,tax credits of up to $500 for homeowners who make specific energy efficiency home improvements. It also continues $2,000 tax credits for 2012 and 2013 for builders of new, highly efficient homes, with the goal of transforming the housing market to save consumers money on heating and cooling— the largest chunk of a homeowner's energy bills. The bill also places pretax mass transit or van pool benefits on equal footing with those benefits currently available to those that drive and park. Workers whose employers offer such benefits can pay for their monthly transportation costs through pretax payroll deductions, saving them money. In 2012, the amount that mass transit commuters were allowed to set aside monthly in their pretax commuter accounts fell to $125, from $230, while the limit for parking costs increased to $240, from $230, because of a cost of living adjustment. The final agreement increases the pretax transit benefit to $240 a month. Finally, the bill includes tax incentives to American manufacturers of highly-efficient appliances, such as refrigerators, clothes washers, and dishwashers. Electric Vehicles The bill extended, through 2013,the alternative fuel vehicle refueling property credit, which expired at the end of 2011. Taxpayers may claim a 30 percent credit for the cost of installing clean fuel vehicle refueling property placed in service by the taxpayer at a business, not to exceed $30, 000 per year, or a principal residence, not to exceed $1000 per year. 3 036 The bill reforms and extends the tax credit for two- and three-wheeled, highway capable, plug-in electric vehicles for 2-years. The tax credit can cover up to 10 percent of the vehicles cost or a maximum of$2,500. Other Issues of Interest Of interest to investor-owned utilities and other private corporations, the bill increased tax rates on capital gains and dividends from 15 to 20 percent for taxpayers with incomes above $400,000 (individual)/$450,000 (joint), on a permanent basis. A 15 percent tax rate will apply to taxpayers below these income levels. If no fix was included, corporate dividends would have been subject to ordinary income tax rates. Protecting a lower tax rate for capital gains and dividends was the top priority for the Edison Electric Institute, which views the agreement as a "win." Finally, the bill suspends for two months (until March 1, 2013) the impending federal sequester (or automatic spending cuts), and will have considerable impact on nearly all federal agencies, including the Departments of Energy and the Interior, as well as Environmental Protection Agency. Given that many Congressional Republicans, including a majority of those in the House, opposed the final legislation over the lack of long-term spending cuts. the GOP will likely try to exact additional concessions from the White House and Democrats on entitlement spending in the coming weeks. Whatever the final result, it will likely again go down to the wire, which has become the new "normal" in Washington. A detailed summary, revenue chart, and the statutory language of the fiscal cliff agreement were previously sent to SCPPA. III. Grassroots Efforts Oppose Taxing Municipal Bonds Governors Met with President, Warned Against Shifting Costs to States Earlier in December, representatives from the National Governors Association (NGA) met with President Obama and Vice President Biden on "fiscal cliff' issues and the potential implications for states. "We know that changes in tax policy and spending are likely," a statement from the NGA said. "When they are made in ways that dramatically affect states, they must be done equitably and in close collaboration with governors." NGA encouraged the President and Congress to follow several key principles, including that federal reforms should produce savings for both the federal government and states and that deficit reduction should not be accomplished by merely shifting costs to states or imposing unfunded mandates. Taxing municipal bond income has been cited as an example of federal policy that would shift the tax burden from the federal government to state and local governments, rather than achieving tax relief for citizens. 4 037 NGA is a member of the Public Finance Network—an informal coalition of state and local government associations, including APPA, that has worked to preserve the use of tax-exempt bonds and is an important ally on bond issues. State and Local Group Make Case for Municipal Bonds In a related effort, on Dec. 5, a group of 20 national, state and local governmental associations, including the American Public Power Association, co-signed an op-ed published in Politico in defense of municipal bonds. The letter made the case that taxing municipal bonds would overturn a century of precedent and increase the cost of critical infrastructure investments —a cost that can only be paid with increased state and local property taxes, sales taxes, income taxes and utility rates. The op-ed focuses on recovery efforts from Hurricane Sandy, which has affected states, towns, counties, transit authorities, utilities and other government entities who have a significant amount of work to do repairing and rebuilding the physical infrastructure. They note that, but for federal assistance, "Municipal bonds are the way in which these costs are traditionally financed. They have also played an integral role in rebuilding our communities following various disasters including New York and other communities affected by the Sept. 11 terrorist attacks; the Gulf Coast region after Hurricanes Katrina and Rita; etc..." The group highlighted the cost increases that would result if Congress eliminated the tax exclusion for municipal bonds. "Taxing municipal bonds would immediately increase interest payments on all new issuances of municipal bonds by as much as 2 percentage points. This will either cause a significant decrease in infrastructure spending by states and municipalities - and exacerbate the economic uncertainty we face nationally - or cost taxpayers and ratepayers billions of dollars in higher interest costs each year," the groups said. Moreover, the group said proposals to limit or eliminate municipal bonds put forward in the context of tax reform or deficit reduction will harm state's infrastructure development. The letter said, "Comprehensive tax reform will most likely be a major issue for the 113th Congress. Hurricane Sandy offers policymakers a blunt reminder about the critical role of tax-exempt financing in rebuilding our communities and a painful warning to "do no harm"to this essential infrastructure financing tool. Curtailing the ability to issue municipal bonds would cause governments - and taxpayers -to pay more for their infrastructure needs. Municipal bonds are a tried-and-true vehicle that allows communities to meet the needs of their citizens." For a copy of the letter or to see the list of the 20 organizations that sent the letter, click here. IV. Administration Changes Cabinet Shuffle Begins As President Obama's second term gets under way, and 113th Congress is sworn in, the White House is announcing several nominations to replace retiring cabinet officials. 5 038 On Jan. 7, sources told the Seattle Post-Intelligencer and Politico that the White House is likely to nominate outgoing Washington Gov. Christine Gregoire to replace Lisa Jackson as EPA Administrator. Gregoire was director of Washington's Department of Ecology before being elected Attorney General in 1992. The future governor made her reputation by negotiating a Hanford nuclear waste cleanup agreement with the first Bush administration, which has held up in court through efforts by the federal government to wiggle out of their commitments. EPA's Deputy Administrator Bob Perciasepe will likely become Acting Administrator when Jackson departs. An Acting Administrator would be able to serve 210 days before the President even submits a nomination. Once nominated, the acting chief could stay in place until the Senate takes action or the nomination is withdrawn. If the Senate rejects a nomination or the President withdraws it, another 210-day period begins. If a second nomination is rejected, returned, or withdrawn, then the third—and last—210 day period begins. Given these rules, EPA could, theoretically, operate without a permanent Administrator for Obama's entire second term. Last week, White House announced it would tap Sen. John Kerry (D-MA) to be Secretary of State. Following his confirmation, Kerry would resign the seat he has held for 28 years. Shortly after the announcement, Rep. Ed Markey (D-MA) announced his plans to run for Kerry's Senate seat. Kerry and the Massachusetts Democratic Party have announced their support for Markey, in the hope of avoiding a bitter, costly Democratic primary. That outcome seems likely, but Markey may face a formidable challenger in former Sen. Scott Brown, who narrowly lost his seat to Sen. Elizabeth Warren in November. Should Markey succeed, he would vacate his position as Ranking Member on the House Natural Resources Committee, a perch he has used to challenge initiatives of Western Republicans and to criticize the federal hydropower program and the Power Marketing Administrations. Markey is also a senior Member of the Energy and Commerce Committee, and during the 111th Congress was the Chairman of the Select Committee on Energy Independence and Global Warming created by former House Speaker Nancy Pelosi (D-CA) to focus attention on the issue and the need for federal legislation. Senate confirmation hearings for the nominees are expected to commence shortly. V. Cyber Security On Nov. 14, the Senate failed for the second time to end debate on S. 3414. the comprehensive Lieberman-Collins cyber security bill. S. 3414 would have authorized the Department of Homeland Security (DHS) to identify the most critical of critical assets across all critical sectors, develop performance-based standards to protect those assets, and impose penalties for violations of those standards. The electric sector argued that this approach would create duplicative, possibly inconsistent standards that would not improve cyber security and would increase costs for utilities. Senate Republicans put forth an alternative bill, S. 3342, that would authorize information sharing and cyber security research and development, but not give any federal agency regulatory authority. 6 039 Following the second failed cloture vote in the Senate, Majority Leader Harry Reid (D-NV) announced that the bill was dead for the year, increasing the likelihood that the White House will issue an Executive order directing federal agencies to use existing authorities to promote more vigorous protection of critical private sector infrastructure. To date, no Executive order has been issued, but drafts have been circulated. We anticipate that legislation will advance in the 113th Congress -either in response to what Members may see as White House overreach, or to deal with issues that cannot be addressed administratively. The White House has said that legislation will still be needed to authorize liability protection for owners/operators of critical infrastructure, and to compel those entities to provide information on cyber security events and vulnerabilities to the government. VI. Dodd Frank On Nov. 19, APPA, LPPC, TAPS, and the Bonneville Power Administration sent a letter to Gary Gensler, Chair of the Commodity Futures Trading Commission (CFTC) asking that the Commission act on the groups' July 12 petition for relief from the "special entity" sub-threshold that has caused swaps counterparties to abandon future dealings with municipal utilities. Some counterparties fear that the $25 million threshold for dealings with municipal utilities and other special entities will force them to register as highly-regulated swap dealers, and, as a result, they have indicated that they will avoid entering into new swaps with municipal utilities. The CFTC had issued a "no action letter" on Oct. 12 clarifying that entities would be allowed to deal in up to $800 million of swaps with government-owned utilities without being labeled a swap dealer. However, APPA found that counterparties had already made the decision not to transact with municipal entities, and the "no action" letter was insufficient to entice those entities to enter into new swaps. The letter points out several reasons why the "no action" relief hasn't worked: the special entity in question must be using the swap to "hedge"—according to a narrow definition of the term —a physical position; the counterparty must undergo complicated analysis to determine that it is not a financial entity; the swap must be in an exempt commodity; and the counterparty must file additional reporting on its use of the exemption in the no action letter. Acting on the petition, the groups argued, would provide long-term relief that may coax counterparties back into trades with municipal utilities. California Members Send CFTC Letter Urging Sub-Threshold Action On Dec. 12, seven California Representatives sent a bipartisan letter to Commodity Futures Trading Commission (CFTC) Chair Gary Gensler asking that the Commission act on the petition from APPA, LPPC, and others to provide relief from the "sub-threshold" that has caused swaps participants to avoid trading with municipal utilities. "Nothing in the Dodd-Frank Act requires the CFTC to restrict the ability of government-owned utilities to use swaps to hedge against commercial risks arising from their operations,"the letter says. It references the Oct. 12 No Action Letter granting partial relief from the threshold, saying 7 04 0 • the fix is "welcomed,"but"far from perfect." The Members call on the CFTC to grant the not- for-profit groups' petition, noting the exclusion requested would only apply to operations-related government-owned utility swaps used to hedge commercial risks. The letter was signed by Democratic Reps. Jerry McNerney, Anna Eshoo, Lois Capps, Mike Honda, and Barbara Lee, and Republican Reps. Tom McClintock and Wally Herger. VIII. Climate Change Enviros Press the White House for Action on Climate On Jan. 7, 70 environmental groups sent President Obama a letter urging action on climate change in his second term. The President has made several statements about climate change since he was re-elected in November; the most recent during his public address commending Congress on reaching a deal on the "fiscal cliff' issues, and also during the campaign, when he said, "Climate change is not a hoax. More drought and floods and hurricanes and wildfires are not a joke. They're a threat to our children's future. And we can do something about it." The letter's signatories, who include the Natural Resources Defense Council and Sierra Club, urged the President to build upon the historic vehicle standards and other progress made during his first term, by "taking three decisive steps to curb dangerous carbon pollution." They encourage the President to "raise his voice, use his executive authority and reject dirty fuels." Specifically, they say the President has the authority under existing law (the Clean Air Act) to achieve urgently needed reductions in thereduce carbon pollution that is disrupting our climate and damaging our health. "Most significantly,"the groups wrote, "you can set standards that cut carbon pollution from America's aging power plant fleet at least 25 percent by 2020 while boosting energy efficiency and shifting to clean energy sources." Power plants are our largest source of carbon pollution and you have the authority and responsibility to clean them up under the Clean Air Act, the groups said. "This will create tens of thousands of clean energy jobs, meet the pollution targets you set for the country, and restore U.S. international leadership," the groups said. VII. FERC, NERC Developments Incentive Transmission Rates The Federal Energy Regulatory Commission (FERC) issued a"Policy Statement" on Nov. 13 to provide additional guidance and clarity to its transmission incentives policies. The policy will apply to transmission applications seeking an incentive return on equity (ROE) submitted after the date of issuance. Public power, consumer advocate and state regulatory communities have been calling on FERC to be more judicious in approving incentive adders for new transmission projects. 8 041 FERC clarified that an applicant must exhaust efforts to reduce risks through"risk reducing" incentives, before seeking an incentive ROE. The Commission noted that such risk reducing incentives in many cases are sufficient to reduce the risk associated with the transmission investment and said it will "carefully apply its total package analysis"to ensure the effect of risk reducing incentives is appropriately accounted for in determining if an ROE incentive is warranted. Additionally, the policy guidance states its expectation that applicants for an incentive ROE would commit to limiting the incentive to a cost estimate, in order to avoid the unintended consequence of providing an incentive to project developers who have not committed to control project costs. NERC Releases Reliability Assessment On Nov. 29,the North American Electric Reliability Corporation (NERC) released its Long- Term Assessment. The assessment provides a ten-year view of the electricity industry by evaluating key indicators that may impact the reliability of the bulk power system, including peak demand and energy forecasts, resource adequacy,transmission development, changes in overall system characteristics and operating behavior, and other issues. The assessment finds that during the next ten years,the electricity industry will continue to vary its resource mix with more reliance on natural gas-fired generation, a reduction in coal-fired capacity, and larger amounts of variable generation. "The on-going changes to the resource mix will require significant adjustments to existing planning and operating practices to maintain grid reliability," said John Moura, Associate Director of Reliability Assessment at NERC. "In many areas across North America,the challenge to reliably accommodate a change in resource mix will require careful planning and time for necessary transmission upgrades." The report focuses on eight key findings, including: • Significant fossil-fired generator retirements over next five years; • Planning reserve margins in ERCOT lower than target; • Favorable resource adequacy assessments for majority of areas; • Increased dependence on natural gas for electricity generation: • Long-term generator maintenance outages for environmental retrofits; • Large growth in renewable resources; • Significant transmission growth to accommodate new and distant renewable generation; and • Demand-side management offsets future resource needs. 9 042 FERC Retains Control of Excluding Lines from BES On Dec. 20, the FERC gave final approval of a regulatory definition of the Bulk Electric System (BES), which has been in the works for a number of years. FERC had directed the NERC to establish an operational definition of the BES based on a 100-kV bright-line test, rather than allowing the regional discretion in determining what facilities are necessary for operation of the grid. NERC drafted a proposal that was supported by the industry; it would adhere to a 100-kV test that also contained specific inclusions and exclusions based on the technical configuration of the facility. NERC also proposed a process by which utilities could exclude specific facilities by petitioning NERC. In the Final Order, FERC took back the authority to review potential exemptions. It is not clear whether the change will cause problems for utilities looking to exempt facilities above 100 kv that they believe do not impact the integrated operation of the grid, because NERC's proposed BES definition already excluded a number of facilities above 100-kV. However, FERC has expressed concern about sub-100-kV lines after the 2011 Southwest power outage. Thus, it is possible that sub-100-kV lines drawn into the BES as part of an inclusion will have a tougher time getting exempted if FERC is reviewing the process. FERC Will Monitor California's Cap-and-Trade Regime Commissioners heard a staff presentation on California's cap-and-trade system at the behest of Commissioner Phil Moeller, who had expressed concerns about the costs the new regime might impose on surrounding states. The program has the potential to be a "wealth transfer from other states to California," said Moeller in the meeting, and he expressed intent to monitor the progress of the system. Commissioner Cheryl LaFleur was more sanguine about the program's prospects. She noted that New England's Regional Greenhouse Gas Initiative, in which she was involved, had been a success story and that California was likely to see similar results. Chair Jon Wellinghoff also said he hoped California would be successful. FERC Denies Rehearing 15-minute Scheduling, PMA Violations The Commission denied rehearing in several dockets, including several of interest to public power. Among the items FERC declined to revisit are 1) its decision on Iberdrola v. Bonneville Power Administration, on 15 minute scheduling to integrate variable energy resources, and 2) its order affirming the Commission's ability to impose reliability violations on Power Marketing Administrations. The Iberdrola decision required Bonneville Power Administration (BPA) to ensure its transmission service to customers employing wind generation is comparable to the service it provides itself. lberdrola Renewables and others had argued that BPA's redispatch policy, designed to remedy excessive water conditions behind its dams by curtailing wind production 10 n4.3 and substituting hydropower, was discriminatory under the Federal Power Act. The complainants argued that BPA's curtailment of wind generation unduly discriminated against wind resources, and asked FERC to act under FPA section 21 1 A to direct BPA to revise its curtailment practices and to file and maintain a Commission-approved OATT. 11 041 • IOW MOW AZUS.A tIGHT R 'NATER INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF T USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: JANUARY 28, 2013 SUBJECT: IMPACT OF CRITICAL HABITAT DESIGNATIONS ON THE SAN GABRIEL VALLEY WATER SUPPLY Main San Gabriel Basin Watermaster (Watermaster) was created in 1973 by the California Superior Court of Los Angeles County charged with administering water rights and managing groundwater resources within the Main San Gabriel Basin, the primary water supply for more than 60 cities, water suppliers, and water agencies including Azusa Light & Water. Over the years, conservation measures were employed by state/local agencies and environmental groups to protect the Santa Ana Sucker (SAS) and Southwestern Willow Flycatcher by designating critical habitats. Recently, the critical habitat designations have been expanded to include parts of the Main San Gabriel Basin. Tony Zampiello, Watermaster Executive Director, will present to the Utility Board how these designations will likely to have operational and economic impacts on the San Gabriel Valley water supply. Prepared by: Liza Cawte, Senior Administrative Technician Attachment: Impact of Critical Habitat Designation on the San Gabriel Valley Water Supply 045 CO >PN (D 1111 UNSIIIIMII MO MINI1111.11 (T5 C (13 C • al 0 > ›N (/) emouna CO 21111111111111111111 (I) IMMININIant o CO a3 C (I) (I .76 sa) 43. U 11111.1111111111 ° 0 " Car .a' s (I) il 1111111111111111 a mum in 60 E - ''-- (z . . c 0 c 0 a 3 , ,c 0 E N 1/4-1 la-3 s..... 0 CO (D >, c 4--4 4—, CY) c al a3 o W 0 . _,, c co a5 c t ° (1) -i • . co CZ p 2(D t a � E n ( ) C O CO C 0, CD 0 I -- Cl)Cle v v( C 0 U Q v Fn.. c(3 U C v CO 0 a 0 s... . 0 cn (in 0 CO Q v= > U co . u.)......) E: ..... E 0 Ct C10cp co cn o C Qa.cuc.,0 oa) < co 0L_.. c p co ..c. r.,a) 0 o 4.... (1) Q) m c m O w co 0 a.Q. X U� C� D 0 • v T e co V J vi...). .. (1..15 C -L... Ls, . ,iimm. 0 It--- a.) (in ....... . c 00) w CO D >, ca.o... a 1 . Cv aii) ...... ap us Qco c s.... a) u) -a a wu) o 4...; m...... to z CDa s-- (� Ta. �la.) cO . _ OP MEM LOW En o a3 ..C.') cz5 >iN .. 11 w = a) 2 5.i.D., (75 .1 -0... 4.. CD CO Q. (iir‘ 0 (3) ..,J ) c C 7 C 0 u) .SIMMIONI v, auE " 14- 000 (13Cts c� a . _ < >1 Cly Zc (oc c c E.--• 00 ...c- f.,w cv2 . o ...... D (13 ?'N ..0 Q U 21 a c., v a) v 0 a� a� � o � � o4 .- = o ,_a3 D 0 M OnooZ . . kik k... ,,, _<,;:t. . ",..=:: ,�., -. ,'�`"",,,, ,, .7 ..a.$ur <.. ,t w p. .-. yr iF xis . „ ti ,,,.,,>. , . i`'- ,.'-P.- '1,-; 'v >.:.:-.. .r'. ..s .. ••• ••. • •.• • • • . • • a fE . ! I. ! { • ( • I ! % ..••• .•�. t s *..ar amp.i • : •.'. • • •� .si ,:. •mss • • • • •w.raw��Lr 1111 s••` ills; o adi •• * ISM WO MP f/I.1 4,1 ikia' • • 5. I II i '.a.t.rr a.e w.w i ce' S y,_1'NM' — rr•' • . .es NM••• :...it /1 �4 • a p ; • 1, s :. 1 •s ♦ 1 a t • �- .. ♦• C o '• 1 C •t --.. ,.4P. ii �o :.NIii., 15 \ illif:) . . • • CU % .� % .1 1 . . w x % C % D t 3 g Ci) litikl E gE § . ! 0 _ �!• ! L . 1. •.•. •c. 2 VJ p cD c 0 0 (.1) 0 CW 0 0) . ..... 0 2 D CO ca. 2 s.... U. u) 0 0 .>, p c o cy) c E (D >, E c <L..... 0 co c0 ( c0 E a 0 a E ca. c ___. _ czs a 0 E a E 11111111111111•11.011s� sn 0 v m.....0 cv C� cocz u. u.... 0 (1) 2 U) C!) C') e 0 t t l tk s,x i .ef ?, y d ski i "fie 4. 1 ..�--. ... ,--0-,-.........„,,,,L:...-..- ter i' r D. t` ek • ,i A . , .. , . ,.. It . , , A,,.. . . .. tit. ,. ..,.‘ ` \ ; ac A, i• 2 V 7.1 « �Fa '' , • . • t k-'.'''''-44 A. .. a b r 4 4 E .+..1 nc3 Cl) a) cf) }5j�JC c c E E m >, 0 i co E ...... ........ o : + o o c (13 -03 7:3 0_ i.... _C ±Ej E a3 a) :- o o o E .4_, ci. c- - o - C ). -oVJ — >, L._-0 ° O o -C E cn ,_ -� U o U CLQ U o C . C v _ Co ._ 0 Po o T4--.3- _. o o Qo ._._c a:e. (13 ata = s2 - - C c k(42 E wa) To 0 ° c CD -- p (3) w c o <a- - o s... a) — o0 ?No" te5_ '6 CI3 h-; (i) -C) 0 (13 a) . _.,1) E CD E �0 2E0C) E`� � o o a) Ow L3'_ 0 o. Lo ..0 73 a.) 0 _ (13 W ) Q.. z- c Oc Cl)E C > Cl) 0 .O +eas " ° (1.1...)0 o � c C is mom C a) EIR /11111111111111111 Q C b > o o :+1...1> oo O E a %v -4-_,-- co .4. 0 2 0 __ s... c co U Q Q) � Ct3 --- Q � 4� 2 4J 4) cz En 0 _3 L-- c a) o Q1..., c c C = o cz 73 U U (9au o > c a) 0 C . _ a) 0) . . 75 0" c) .�...a 0fit 0 t: —0- L.., ttf . C C Q D O D Q CO ci3 LL 5 (i o 0 o w 2 2- f i t 1 ' VI ItS j r IIIIL Lk it . i ,e t F � f *. fb • ile; s .4l . R ,F ..-..afit, -„ .',i • y- 1 d f Ash / t „, `.« • y •.. _ it': - ___ . #7;I 4- P A - T.4,-,- 7-17 (4. . , • ,' .. •jam,.,,,**. �� - «, • E t 1r '7", *1 – ) •— 0. ll . , ? if 1 Y} a f - , . «. 1 . ) - i !, i :'*'' '''-t—,.:,jr.7..„,41::,:: ., 4,1:.:i.......::..,.1.µ`' ,p' I Ale -CI ...t LINN !ggypK .i.. a) _ _ • .... _ ti v• ,, i . . f CO) - . 1101 = - . �CIO CO Iii 24:4,1,'',„ ,... I, . ':1406. "4 Iwo 4 - Cf) ,000.0•4.4%., ,..;"ti'41;-- -..-; „',..ue.l NIII: 4.• y tr` ' -, �'. 4 CI < .. '` O . ‘11/4: fiike • CC ..„ fr. L . # Cla ' - .e‘ '-' #CO ." r , Ulli) t 3 j 75 W -C o ____I -o 4"(7) � 4.3, a) U o C o .c CIOCO CCS a) ._c w C cum o MO 2. m 4-J 2 0 5 c (13 C D cco :+-• fro a) a) O).1 C w -c E ci) .o) a) CI) Tfi --c) (1) 2r/) n 1 n 1�/ J VJ W n, "0 < co 45 1-16 0) E t.I) cz 4—• 2 a)(& -72 _c c (,, C 0 E0) — 4-. .---- O a) U ." IT) Co 0).0 . ET) ,}.� -> co > co ..c .c a) c _c c a 0 (1) (C3 C 1.0 a C.,) a) -- _ CCS U 3-�-' _.._) a C t.-- > _c .4----J -c- Ct3 oo co (.,L UU O. LI- 0 73 p 2 '0 To 0 to C a) O X D coc DcoCn I U , , in O U) tet' IA :to- i�- o c) C3 0 O 0 O ..Q CD "ILu -- CD Qa 0 L O D O '-" N -+ N I— O N a N D C(1.) c E p alcu 0 o ci) 4.....• o W c) CZ 0.. _c v--- .*..0 �' o — cp n D cL cCN Cts C cu w 0 a.) 1 0 0 (N3 p 0 co ...C. w (i) ...0 E 0... •..... (L) a.) W _... 0 0 a) < C 0 •1•••••• or) co o Q OD . MINIM 0 o 0 o p CO C (I)CD S' N 0C s..... . t3 u— CZ CD 4-4C C c - rte MO . . ( ) o •_._. �.}.._ 0 C CO o IM " CO CZ ci) N U = 0_ a ,L (v •— {13 XLL > ID (f) ..c. C E Q o (I5 LEI ( `) 0 co � 0 0 -c (N Q 0 0 �/ n d P VTIf t • v • V� � * T.T ,r r._ v ' w /"",a✓h, .,..:" • ... - rt r ,., • ' s , ; 7.6,47 ' , *MAT' yP YaJuM !,h4 " My , ,l eP;;n. ,� i�`"'`_ f + ' `F a t d „ CRITICAL HABITAT „ " 4 i4Y } F drti tia�� - s•Mo ✓* yyea ,. 1 ....-1:--#.” '`, w lr... " ... ` ,«t ; ti !., .. letesejir - r rt.+r�r ie« 't^z k- F . . . ...#* "'". ' `- n " � a � �� f � YM ' }� � v1to eiYk' t#M. �i : f t1y ,...40, fy 4 ....„44!•''.' ' Y :: T •PPP"` Y ,. jt, et11Nii nregt • ^4111W31.4 .2 c.« Fx ^ , „, P '� - a COGSYELL +DAM AND RESERVOIR' 3 ro*,..,,. - . - re)„.„1.4, , .,_ , .. ,..4.., ,,,...., • '': GA ' .•_ ''m �`, ,,��, `, BDRRIEELSERVOR ,«} ,, Q � DAM AN " 1 NM .ft A I ! - i� ,F ... P. .4. MORRIS «. ,r �4 . ' DW SE R ,� M AND RVOT �, • .'",,,f it ' it; �►ovia e��TMINy+c+ a ,. i� ! yy.'I A + r Ma l+ ��"�y� r J = w .a � DU."' M.I+r..4YX}eel, - F .1. _ Q'Mfj(g7ry! } y w 231 9i !� ,Irtenmti„i _rid �ti moi: AzleGMr dor}I f ....+ ,0°.i„�' /'d YY r' b".�. ( !!. td�. �f. .: 1.a«c+« .. 'r'1 Citi�Yel�WijRI ,,"". w J1 w 81 3 1 •_. �, ,7 't� vM tlou.Mr... p p.�na,, •,x,/' � L ..+''•---ry 14th It t 1 m_ B4 ` ,,. 1L'7-_a01glw rte, f G1119re 210 »" Hili pR/M r• 1�•++.d.h \f. San Dimasav CA 449 Source : Goo Ike Maps ....-.1..., ,x- FA10RIA sul1E100 MAIN SAN GABRIEL BASIN WATERMASTER FAX X76)ss7.61� FAX 341-7065 2171 E F111/1C/M1 Dad Suit•K s.;;NA C��m. CRITICAL HABITAT FOR SANTA ANA SUCKER, LOS ANGELES COUNTY °TssON 2ss1wr3,e.wp�RdSuMA2Qv iTS NQ ri,,,Artrort.E6702 CI) ■ .... Cl) 4- t ) -�.�, .2 w >1 (/) CO Q tn- v v -o C u) ._ 5 0 0, < 'V CD a3 -1--' 0 Cl) =0 CI. U ......- (T3 E � � v (O (13 .0- ca. u) u) 0.. CD w0-- _0-0 v U E . (,.., mu) . .,.., 0 , _c ,-_c c) o •.111•11111 2 0U >, .>„ CN C a) C (L) (....) 0 Cf) 0 "C) II 11111111111111111 c w c c ....... E . v �'" CO v O 4-4 U) U -°� C ° o .� -- o 2" C < c13 v (I) = Cll vE c.-)N Q d' E o Co D ° u_ 11.11 o) ov >I, dC v v 0 v Q C = oCO 0U CD U v) .� C' ....... s_ C L_ o... co Ex (1) c)c5 wQ c ) a.- (f) o W o O 10 W w . ...... w ›, c Lt3 Zips >t = (13LL C CZ 4D U) < '0 (13 _.. tf Cl. C CI 0< --o . o ° o (13o . c)1D0 (f) -- --I CO Ti �' V _ C -- . 0 (13 a) o w c co 2 co a. 0. cm 74:: co Z-5 ct) ° E E 4.--d. ,s- -0 w 2 .±-5 — ______ ..., co 2 co . p r/) 0 5 co 2 (1) 4.- o . p cr .4..a c..4-• 4--(i5 . . 0C,) 0 4-- co wcr) C co Cl).-• N • " 2 c o L.L. o ocy) _ o .. c .,... (D , , o (.0 . .1D -t-,-„J ..,.,..- 5 ..0 0 C V- C = tll o 0 -- 0 ,--- c o Li) 0- w 0 o (15 V c 73 cu ° > Iii a) a) w U tv _ . Q a) o-) tea) w2 � ._ o :E CD 2 2 w < (13 i--- (T) c) 0 > > \/ J 1``1/] a) O 0< Q u) `= o C� 0 LO I 0 L C _ C >, tU cii) ` 3 T.-. .._ cu E D O CDC a) rs I-- ci) 0 (3) c co — 0663 0 U LL C. CY)CI. CD v (I3 C s.- C -0 _CD v c� c52 E - — -) n a) 71, . MINIM 03 Oil SCD C) C. > vN"'"" . L., > ai, > Q (D (13 0..c L.... v 0 E >, a) ,_ u) las c� c .� tr.) > LI.. 2 (c� .— . v, (..D v C3) N....., (i) L.- CD ..,C La OCO L.}.. O U p -0 E c 0 . . " (13 ca- -(2. Ej- • (j) 0 :4--j- low .E CZ o • _a c..) E . ._. (L) to .-- W D Q C3) _1 X 0) 04-- - ' 0 L 7 i i -4-' 73 C (1) c c (1) 4E1 .. 0) v CO ■ CD E7.E a v U .c E C co v v v " v E co (/) a c.-3) .- o) a) 2 1-- co Q. � v E co2 v Ti5 L 2.- -r.-) D 0 4- a) ca. 0_. U U 0 s.., U 0 c �. -c .... u. 4--• , 0 0 (/) -0 0 0 c+.7. rm.° 4."j l- -t-i5 -oa . ---- (I) v < 0 aso.. C 113j 0 5 o a . vv vo � ' a 4-- a) C 0 — O. a P C v >, c o Q c m s-- v .C w o c1) co ,. , ----- (I) 4--J a. = c L-i-i 0 7:1) = >,, D v . C C13 --- o k- a. C 0)00 .00 0 CC5 c (i) 0) r- "= v v ›N ©C c -� c c r) O a M 0) 03 D ( 7-€5 (N 2' _ _,_I 47 Sumo 0 muCt 0 141•001 a3 w PF o ir ›N Unia OF r •0 i I I I IIIII ,4 0 7' . 111111 ( 0 LIMB 100) i.' - misms 0 - Alik. . .....• ',lima CO ' . .,,.:. . , . „ ..'-' .. OA1.7 . -. ...."- 4. . 11,-" CID 0 1•0 ..0 viimia ID 0 Ctifi) • on � � Lem o WW ._,C. � C 0 .�, 0 D C s...... 03 IC c c C.) 0rQ oo 0 = . ._ a3 U a CU ..__ - -� -0 0 0 . - C w..... CC CY) (i) 0 , >,, .... Or) In CD w C v 0 >, L �- 0 Cl) •_. .... CD -2 0) a_ co 0 . .. %-, c o c) 2- cu Q N r••••••MI 21111111111111 a) .4_, VV0:5 ,�� o v . . Q CZ IMMUJo ,,. . CI cu p CI)CO L0 Cin :3 U Q v •> _> „,•....•,,it) 1141.114 • (13 mE 01) MO 0" •••••••• (111) (1113 INIMM•MOMI• Q -- CC 0W Cf) U U =, c6 1L 0 CZ CD N—' CCS :. Ct) CO 0 Q ° x CO N N v k, .>".,' :.' "- sD .�`,ova Y- - �'-- 3:.-''_- _ a -_ - F# T W .c. al c CCS u) CU o C3 U) a a) CS C 51._ C a -C (/) "0 > 46 4-0E 0- u) U _ow E C.) o2 E (1:5o CO -c o o ....0 Ti a C ..07-4:: az .. c .a 4--, co �- . -- 0) 4) > (,) 0 CCS -� 4- .7 t--j 0 T. `c 0) _ 0 -0 ._.. j -�--� c co c CO 0_ ._ R3 CCS a3 -c. E 0 � � . CCSCI C6 0 p 0CD 0 -w > U UJ co D : Ccp � � ECZ E �' E . ..._ c� �- co a) o a) a -0 > E a) 46- -0 Ej w" 0) 1 ._ ia) ,..: < •._ co _c co -0 4...d cl) c it..... Et 0 0) c 0 2 P co w —0 co (.) -,-+:..,- 0 (13 - - o >' �. C .4-aJ-0 c o 0_ 4-I COa _ U> -Ca CCCS CCS co cy) CCS CCS >, LL (13 "17_ 2 0 ca _c _c u_ u ""t .1, ., • B li `i+ !4 - 4 Tes+i ...1. •`;.vt r ,-,,,-A_.:, _ r • # �J` • ' -F t .r. r f �, 7 • '1-,A -Y ae-!1.1 1 ,..1-'-' r� '>, Z ,#-r f—p 4Y y2 i, _R t ,; ' ' # ..F f! s y- P"_ , i }]�; c§.5•5 R& of 7;,-- ---- - t 4 •n, 38 _CSS '2l )..,RLIj y'. ,-T"1.1",-••+. ' , "" 1 ••,t'I ticw •,,, e•,,_ , ,- ,..,_,,,, :, ...E.,,,,-„,....,-. `i t•r ,/ `- sr$ ` 3p 1!1! �: axUc 4Cr , . ..... je•i A..;$ , T rP` i H te. ❑a . ... . - , • .,...1.? . . * -z,,,,... „..„_,.... . , . . ,...: -_,. .. ti 1.,.; ...,,z---....,,,:. . - ,..., ,-,, 1 ' t' ”` z r . , .T.,,„:7: , t � 17‘1,,.:4,,,Jf ',:.-:'.9.:-.t..-;./..:".'9 Y# t f y r u.,.ak ♦ ,.i ate -'..417,..14%,'-7- A" yay •a • � `.as !' "4`� �,.t}:'i"�• ¢D� �'a"' { w�s Iii�, ff ti5t { L Y ❑ r ti x • ; • t • Un. ,,-'+'''.4;"-t- . Q 't � ' st Jr. ''i' -aL 4 r' r :4 4- ,r...,1` ` c :47 4 H yl r 3 " "*.f.: •-•'' , 1 -,,,,,,.,-;:e'''.--'";LtT `'",'e,;: M u O v A E Y ,....."•, ' k___, i fir*# r; '` slit ii F ' t a . f t � jam.{ r lY _ r -Lt 0N ✓p\ v ,, r ti 3 n ,%, a o z v. C F - a vi Z c _ 0 J # A , r`f Cl) Om - ---4.-- - r - . °< .- x ail) 14....0 (1) .4.... a) .3r i.„, .; ' ;4+ , :-:4,,, 4- sir - ,: --_::::',,,,T1 24.-::--'4--% .- °"_.. -:} .` - ..- y'*" "i, N',‘-.., , , f^* a y. 4. , .. • hs-A �• . • .% ' tie t. -. . • ..-,.. 'Ifi ' ' , w • ^I'`3..'.-:-4\i'' '''R7+.fir,, . p f • ( ,a� i, 1, fig f f ;f 1 Y + a ; V, nl. 7 4 . I �su - -4-.:4-.1,,- +. x,11 -... 1 ',I' .% ...., Oil al ,4. • ,l Ull;1 0 ,...,k 1:.......010.1... 4 7, t. 44. ••{t ; s.' Irin ai) ,:...,._.„ „.„,... ..._ ... .. ...„....,..7.,.. . .,_,, . ..iiit..,.....,.......,..., . .. ._, ,„,.. ,,"1.- v4.: ''. ' . , -*- 4,1,;•••-. - .- . . •-.. , - - ,, - f:4.4. = sc l t+x r 'r`. 1 .� 3 i" ''y a 01 .t { los, a ` �' .t - . - .., v.,.. _ ,„.,,r .. '':-..t„-',.,:-.: 4,7',', ., fib....,. .{pjk z . 7 . ENDANGERED SPECIES:FWS issues final critical habitat designation for Southwestern songbird (Wednesday,January 2,2013) April Reese,E&E reporter The Fish and Wildlife Service today issued a final critical habitat designation for the endangered Southwestern willow flycatcher. Prepared in response to a lawsuit from an environmental group,the plan adds riparian acreage along 1,227 miles of stream in Arizona,California,Colorado,Nevada,New Mexico and Utah to the songbird's 2005 critical habitat designation,bringing the total area to 208,973 acres.Waterways included in the designation include the Rio Grande and Gila,Virgin,Santa Ana and San Diego rivers. Another 948 stream miles included in the initial critical habitat proposal from August 2011 were dropped from the final designation in response to public comments and a peer review,FWS said.Some of those areas are already protected through habitat conservation plans with landowners,agreements with the Department of Defense for habitat on military installations,and tribal partnerships,the agency said. "Ongoing conservation efforts by the Service and its many partners have helped curtail the decline of the Southwestern willow flycatcher and reduce the threat of extinction,"said Benjamin Tuggle,FWS' Southwest regional director."Identifying and protecting important habitat will help guarantee the survival and eventual recovery of this emblem of our fragile Southwestern riparian ecosystems." The flycatcher,listed as endangered in 1995,nests in vegetation along rivers and streams or other wetlands. FWS used the flycatcher's 2002 recovery plan and scientific data from the ensuing 10 years to revise the critical habitat designation,according to the agency. Noah Greenwald,endangered species director for the Center for Biological Diversity,which had sued FWS to issue the new habitat designation,hailed the revised version as"great news." "Protection of critical habitat for this tiny,unique bird could make a crucial difference to its survival,and also gives urgently needed help to the Southwest's beleaguered rivers,"he said in a statement. The new critical habitat designation is the third for the flycatcher.The first,which identified 599 river miles in 1997,was challenged by the New Mexico Cattle Growers'Association.But in its 2005 revision in response to that challenge,FWS added more acreage,for a total of 730 miles.The center,in turn, challenged that revised designation,arguing that it failed to consider hundreds of miles of rivers identified in the recovery plan for the flycatcher. The center will be"looking closely"at the agency's exclusions of the 948 miles of stream habitat to see whether FWS erred in deciding not to include them,Greenwald added. f / ,10 BOARD OF DIRECTORS 5. $t , Barbara Carrera,President ''' Dan Arrighi, Vice-President SAN GABRIEL VALLEY Brian Dickinson,Secretary Craig Gott,Treasurer Chet Anderson Ron Bow WATER ASSOCIATION Ken Deck David De Jesus Louise Dirian Benjamin Lewis,Jr. Victor Meza David Michalko Steve Patton Martin Ray March 31, 2011 Tom Tait Carol Williams,Executive Secretary MEMBERS c;ties: The Honorable Tom McClintock Alhambra La Verne Arcadia Monrovia Chairman Azusa Monterey Park Baldwin Park Pasadena Subcommittee on Water and Power Covina Rosemead 1522 Cannon House Office Building El Monte Sierra Madre Glendora Whittier Washington, DC 20515 Irwindale Industry Urban-Development Agency Public Water Districts: Foothill MWD La Puente Valley County Water District Dear Chairman McClintock: Rowland WD San Gabriel CWD The San Gabriel ValleyWater Association appreciates the opportunity to provide San Gabriel Valley MWD pP Pp ty Three Valleys MWD testimonyfor the record with and to our hearin A i i l 5 2011 with Upper San Gabriel Valley MWD re g Y g on p > > Valley Vall y WD regard to the topic; "How existing and proposed regulations are impacting water Public Utilities: and power supplies and the jobs associated with these supplies." Azusa Valley Water Co. California American Water Co. Our testimony is attached. Golden State Water Co. San Gabriel Valley Water Co. Suburban Water Systems Mutual Water Companies: Amarillo Mutual Water Co. Azusa Agricultural Water Co. Si erely, California Domestic Water Co. Champion Mutual Water Co. Covina Irrigating Co. Hemlock Mutual Water Co. Rurban Homes Mutual Water Co. Sterling Mutual Water Co. Sunny Slope Water Co. A hony C. Zampiello Valencia Heights Water Co. Field Secretary Valley View Mutual Water Co. Private&Industrial Producers: Hanson Aggregates West,Inc. L.A. Co. Dept.of Public Works Miller Breweries West,LP Monrovia Nursery Sonoco Products Co. United Rock Products Corp. Vulcan Materials Co. Workman Mill Investment Co. Consultants/Others: Aqua Capital Management LP The B.E.S.T Meter Co.,Inc. Civiltec Engineering,Inc. Integrated Resources Management,Inc. James Jones Co. Main San Gabriel Basin Watermaster Measurement Control Systems MWH Americas Henri F. Pellissier R.C. Foster Corp. Roscoe Moss Co. SA Associates San Gabriel Basin Water Quality Authority San Gabriel River Water Committee Spec Services Inc. Stetson Engineers Inc. Tetra Tech Inc. 725 North Azusa Avenue • Azusa, California 91702 Phone (626) 815-1305 • Fax (626) 815-1303 http: //www.sgvwa.org Testimony Submitted by the San Gabriel Valley Water Association To the Subcommittee on Water and Power Hearing April 6,2011 The San Gabriel Valley Water Association, representing more than 60 cities, water suppliers, water agencies, and consultants in the Main San Gabriel Basin of Southern California appreciates the opportunity to provide testimony today on the issue of how existing and proposed regulations are impacting water and power supplies and the jobs associated with these supplies. The San Gabriel Basin is one of the nation's largest aquifers. The water stored there is extracted by water producers and used to serve the needs of over 1.5 million people. Keeping the Basin recharged and available for our drinking water supply depends upon a series of agreements and cooperation among multiple Federal, State, County, and local agencies. These long-standing arrangements have been very successful in providing the water supply and flood protection that supports our local economy while also protecting numerous species that live in the San Gabriel River, In December, 2010,the US Fish and Wildlife Service issued a final critical habitat ruling for the Santa Ana Sucker which includes the upper reaches of the San Gabriel River and which threaten to unravel cooperative agreements such as the 1989"Long Term Management Plan,West Fork, San Gabriel River" through which the US Forest Service, California Department of Fish and Game, Los Angeles County Department of Public Works, Angeles National Forest,Main San Gabriel Basin Watermaster,the San Gabriel Valley Protective Association, and the San Gabriel River Committee have all worked together to provide fish habitat,water supply, and flood protection for those millions of people who live downstream from the headwaters of the river. It is important to note how the San Gabriel River differs from other areas impacted by the Sucker Critical Habitat, such as the Santa Ana River. The upper reaches of the Santa Ana River above Seven Oaks Dam were removed from the original proposal submitted by US Fish and Wildlife and are not a part of the final conservation plan adopted in December. However,this was not the case with the San Gabriel River where the sucker habitat conversation plan extends into the headwaters of the river in the Angeles National Forest. This means that for us, the full run of the river will be impacted by the sucker habitat conservation plan and with it all of the uses of the river including water supply and groundwater recharge and flood control. The critical habitat extends to the Cogswell Dam/Reservoir and the San Gabriel Dam/Reservoir, both of which are critical to the management of the River. Much like a stack of dominoes, further attenuations to dam and reservoirs operations at these reservoirs are likely to result in lost efficiencies downstream, thus further jeopardizing flood control and water supply functions within the entire Basin. Before the issuing of critical habitat for the Santa Ana Sucker, these reservoirs had the flexibility to maximize storage capacity and move water through the Basin in response to conditions such as approaching storms or to accommodate unusually large accumulations of sediment from wildfires. This latter function is especially crucial because the San Gabriel Mountains are highly erosive. This is especially true in the wake of recent forest fires which have greatly increased the flow of sediment into these reservoirs. This flexibility in storing and releasing water has also benefited numerous species in the River since river flow can usually be maintained even in the driest months of the year. But with the Critical Habitat designation for the Sucker, local agencies must obtain not only 404 permits from the US Army Corps of Engineers before managing these reservoirs they must now enter into a Section 7 consultation with the US Fish and Wildlife Service and attempt to demonstrate that sediment removal from the Cogswell and San Gabriel Reservoirs will not harm the Santa Ana Sucker. This puts a huge uncertainty in our ability to fully supply our local water needs. The San Gabriel Basin Aquifer is replenished by many sources including stream runoff from the adjacent mountains and hills, by rainfall directly on the surface of the valley floor, and by subsurface flow from two adjacent basins. One critical part of this process is mountain stream runoff collected and stored in the Cogswell Reservoir and then sent down to the San Gabriel Reservoir,the Morris reservoir and eventually the San Gabriel River where it is spread to replenish groundwater from which our approved Basin producers draw their water supply. If the San Gabriel Watermaster cannot depend upon the component of its water supply that has been provided for generations by the link of Cogswell, San Gabriel, and Morris Reservoirs, we will lose a key component of our naturally and locally occurring water supply. We calculate that at a minimum Cogswell Reservoir provides us with 11,136 acre feet of water supply annually and San Gabriel Reservoir further 31,000 acre feet. If we lose this local source of water then we will be forced to turn to the State Water Project and try to purchase the short-fall. A very conservative estimate of cost would be $243 million and $673 million respectively. This cost would have to be borne by our Main Basin water producers who would, in turn,have to pass it directly on to the people they serve. The San Gabriel Valley Water Association is deeply worried over the failure of the US Fish and Wildlife Service to take into consideration the economic impact of its decision to impose a critical habitat on the full reach of the San Gabriel River. The economic analysis that accompanied the Fish and Wildlife critical habitat proposal commented on this issue with the following statement: "The likelihood and extent to which water sources will need to be curtailed or replaced as a result of sucker critical habitat designation is uncertain. The Service has articulated that, with regard to projects that involve a change in water discharge, possible recommendations to accommodate critical habitat could include, though would not be limited to measures such as to 'not divert or divert less water', `modify the discharge regime' and `require additional measures to offset habitat impacts (off-site habitat restoration)." "It is clear from the volumes of water cited below and the value of water per acre foot of replacement water that, should restrictions on water usage in critical habitat area occur, substantial impacts to water users would be expected. However, the Service states that determinations will be made on a project by project basis and as such, are not able to determine the potential impacts to these projects at this time. The economic analysis does not currently incorporate costs to replace these water sources." When we read words like"not divert or divert less water" or"modify the discharge regime",we fear that these strike at the very heart of the cooperative arrangements that have allowed us to manage and provide for our regional water supply and flood control for generations. The very uncertainty expressed by Fish and Wildlife as to how they will go about this process and the impacts it will have on our ability to provide drinking water for our citizens is of the very greatest concern to the members of our Association. The challenge of providing water to scores of cities and water districts in the San Gabriel Basin cannot be left to chance. Before the dams and reservoirs, groundwater replenishment and the establishment of"safe yields,"the San Gabriel Valley was a desert. But thanks to these arrangements, it is now home to well over 1 million people and is an engine of economic growth and jobs. If the sucker critical habitat threatens our ability to continue to provide this service,we must look to our arrangements that allow us to purchase water imported from the Delta. The availability of this water must be considered uncertain. And even if it is available, it will be much more expensive and of a lower quality than our own local water supply. It makes little sense to us to force an entire region to depend less on its own local water supply and more on imported water drawn from an environmentally sensitive area and transported at great cost to the water users and in terms of the energy necessary to move it over hundreds of miles. The US Fish and Wildlife Service in particular, and Federal agencies in general, must be required to fully consider the economic and the environmental impact not just on a single species such as the Santa Ana Sucker, but instead on the full spectrum of issues that are impacted by the designation of critical habitat. The fact that this is not some remote area but in the midst of one of the most heavily populated areas on earth should also is a factor as these plans are implemented. Thank you for the opportunity to provide information for how the San Gabriel Basin is being impacted by these issues.