Courts keep ruling against action tied to Westlands’ federal contract but it doesn’t mean much. Why not?

August 9, 2023
by Lois Henry
Westlands Water District is one of the largest agricultural water districts in California. It covers a huge swath of western Fresno County. Photo from Westlands Water District
Lois Henry

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The Center for Biological Diversity trumpeted a court ruling Monday that denied an appeal by Westlands Water District of a previous ruling that kiboshed the district’s “validation” action to have its contract for federal water converted from a term contract to a permanent one.

“Once again the courts have ruled that these schemes to lock in permanent deliveries of California’s most precious resource are dubious and illegal,” said John Buse, senior counsel at the Center for Biological Diversity, wrote in an email blast to multiple media outlets. “Massive water diversions only benefit corporate agriculture and they put our drinking water and Bay-Delta wildlife at grave risk. The courts are right to stand up to corporate interests.”

Except this ruling doesn’t address the legality of Westlands’ contract with the Bureau of Reclamation. It doesn’t address how much water Westlands’ receives and it doesn’t stop the contract from becoming permanent. Because that already happened in 2020.

Even without a “validation action,” the Bureau of Reclamation could, and did, agree to the contract conversion.

Monday’s ruling agrees with a lower court that Westlands’ “validation” action was done incorrectly, sloppily, even, according to the ruling. But the ruling also states that doesn’t mean the contract is void.

When asked if this ruling would have any impact on the conversion of several other agricultural water districts’ contracts from term to permanent, Buse said, no. Monday’s ruling by the 5th District Court of Appeal was specific to Westlands.

“But we have challenged all the WIIN Act conversion contracts in federal court for their failure to comply with federal environmental laws,” he added.

The WIIN Act refers to the Water Infrastructure Improvements for the Nation Act passed in 2016. Included among the numerous provisions of that act was the ability for Central Valley Project (CVP) contractors to convert their term contracts, which were typically renewed every 25 years, to permanent contracts, according to Attorney Alex Peltzer, who represents several other water districts that converted their contracts under the WIIN Act.

Peltzer explained that contractors who receive water from projects constructed by the Bureau of Reclamation all over the nation are allowed to convert from term to permanent contracts when the Secretary of the Interior deems those projects “completed.”

“Some might think that after so many decades in operation that the CVP is, in fact, complete. But the Secretary has not made that decision yet. No Secretary has ever deemed it complete,” Peltzer said. “The WIIN act said that despite the lack of a ‘completion designation,’ CVP contractors had a right to convert their contracts to permanent.”

Contractors who elect to convert their contract have to pay off their share of the massive water project’s capital costs – what it cost to build years ago – rather than through annual payments under their old term contracts. For Westlands’ that lump sum amount was about $210 million, which it paid in 2020, according to a statement issued by Westlands on Tuesday.

Other than that, there is zero change to how the project operates, contractor’s duties and obligations and how much water is available, Peltzer said.

In Westlands’ statement, General Manager Allison Febbo listed how the permanent contract will operate. It states:
• The shortage provisions, which allow Reclamation to reduce the District’s allocation when water is scarce, are the same in both contracts.
• The amount and timing of water the District is entitled to are the same in both contracts.
• Under both contracts, the District pays additional costs for the CVPIA (Central Valley Project Improvement Act) restoration fund, energy, and O&M (operation and maintenance) costs. These costs vary from year to year and are calculated by Reclamation.

What’s the benefit to converting to a permanent contract?

According to Febbo’s statement, Westlands’ per-acre-foot cost for water is lower under its permanent contract as that fee doesn’t include the capital costs that Westlands paid off in 2020. And, Peltzer said, districts don’t have to go through the administrative hurdles of renewing their contracts every 25 years.

More than 80 CVP contractors have converted their term contracts to permanent under the WIIN Act, which was modeled after contract conversions allowed for Friant Water Contractors under the San Joaquin River Restoration Settlement Act passed in 2009.

But there’s still the matter of the federal lawsuit challenging the WIIN Act conversions. That lawsuit initially only included Westlands but the other districts that converted their contracts under the WIIN Act were included by court order, Peltzer said.

“The challenge at the federal level says the districts didn’t do CEQA and NEPA (environmental studies under the California Environmental Quality and National Environmental Policy acts),” Peltzer said. “Except we did do CEQA and the WIIN Act exempts the contract conversions from NEQA because there is no change to operations so there is no environmental impact.”

He didn’t give the lawsuit much chance of success.

“But if the environmental groups won at all, it would be to require we do NEPA,” Peltzer said. “It would not rescind or disturb the contracts. Then we’d do NEPA and those studies wouldn’t say anything because there’s no change to water operations.”

SJV Water is an independent, nonprofit news site dedicated to covering water in the San Joaquin Valley. Get inside access to SJV Water by becoming a member.


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