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Environmental Services

Dean Messer, Chief

3500 Industrial Blvd.
West Sacramento, CA 95691
(916) 376-9699

Mailing Address:
P.O. Box 942836
Sacramento, CA 94236-0001



mplus principles

With the discussions threatening to spill over into the legislative and judicial arenas, the water supply contractors and DWR took unprecedented steps in fall 1994. They hired a mediator, set a December 1 deadline for reaching an agreement, and initiated a full-time effort during October and November to solve the water allocation problem.

Soon after discussions began, the parties determined that the water allocation problem was far too complex to be effectively approached as a single-issue problem. Article 18 negotiations grew into an comprehensive revision of the SWP long-term contracts and their administration in an endeavor to update management of the SWP. The feeling was that amended contracts would allow increased flexibility for the long-term contractors and make the SWP and DWR more responsive to changing water supplies and needs.

Because the SWP had yet to be fully developed, administration of the contracts encountered unanticipated difficulties. The parties recognized the necessity of amending the water supply contracts to meet contractors unforeseen needs. The parties also determined that the contracts had not been designed to address such contingencies. Only through major contract modifications could the problems be adequately addressed.

Development of Principles
After 2 months of full-time effort from DWR and contractor representatives, the Monterey Agreement took shape and was released to the public on December 16, 1994, in the form of 14 principles:

  1. Water Allocations. Allocations are based on entitlement.
  2. Water Allocations When Requests Exceed Available Supply. Initial agricultural deficiency is eliminated; Article 18(b) [permanent shortage provision] is eliminated.
  3. Kern Water Bank. Kern Fan Element property is transferred to agricultural contractors; agricultural contractors permanently retire 45,000 acrefeet of entitlement.
  4. Permanent Sales of Entitlement. Agricultural contractors commit to allow up to 130,000 acrefeet of entitlement to be sold to urban contractors, on a willing buyerwilling seller basis.
  5. Restructuring to Ensure Financial Integrity of the SWP. Contractor payments in excess of SWP financial obligations are returned to the contractors as follows: money for agricultural contractors is put into a trust fund for rate management; money for urban contractors is distributed directly to them.
  6. Terminal Reservoirs Points of Delivery. The contractors paying for the terminal reservoirs gain increased control/management of those reservoirs.
  7. Interruptible Water Service Program. Current categories of surplus, wet weather, and Article 12(d) [shortage makeup provision] water are replaced by a single category of interruptible water, which is allocated based on entitlement and delivered at the melded SWP power rate.
  8. Nonproject Water Transport. Contractors have the right to transport nonproject water in SWP facilities, at the melded SWP power rate.
  9. Water Storage Outside Service Area. Rules for carryover in SWP conservation facilities are expanded; there are no limits on groundwater storage of SWP water outside a contractor�s service area.
  10. TurnBack Water Pool Sales. An annual turnback pool is created under which water allocated but not needed by a contractor may be sold to interested contractors and/or DWR at a percentage of the Delta Water Rate, or to noncontractors.
  11. Conforming Contract Amendments. SWP contracts are to be amended to conform to these principles.
  12. Project Improvements. DWR reaffirms its obligation to complete the SWP.
  13. Integrated Package. The principles come as a package�a contractor can participate in all or none of the provisions.
  14. No Precedent. If the amendments are not entered into, the parties agree not to use these principles in court proceedings.