Modesto Irrigation District weighs selling water to SF

MODESTO -- In the 1970s, as a dam-building boom neared its end in California, water planners started laying the foundation for something else.

They looked into the idea of water transfers, where agencies with plenty of the resource sell some of it to parties that are short.

Proponents saw it as a way to make the most of the reservoirs and canals while balancing the needs of farmers, cities and the environment.

This history is useful as the Modesto Irrigation District considers selling some of its water to San Francisco. The two parties, both of which tap the Tuolumne River, are in talks about a transfer at a yet-to-be-determined volume and price.

"From a plumbing perspective, it's the kind of transfer that makes perfect sense," said Ellen Hanak, a senior policy fellow at the Public Policy Institute of California, based in San Francisco.

News last week of the MID-city talks had some Modesto-area people asking whether the sale would endanger the district's 120-year-old rights to the water.

Not to worry, Hanak said: "You're not transferring the right. You're transferring the water."

Water law in general requires the holders of rights to put the supply to "beneficial use" or risk losing it, Hanak said. The law was clarified in the early 1980s to say that transferring water can be such a use, she said.

MID General Manager Allen Short said municipal water use is the highest use under the law. The district already supplies much of the water for Modesto and a few other communities in Stanislaus County, easing their reliance on wells.

The San Francisco talks also have some people worried that the MID is giving the impression that it has a water surplus. This in turn could prompt the state or federal government to seize some of the water for downriver fishery restoration.

Hanak said most of the fish-related irrigation cutbacks in recent years fell not on the MID and other districts with relatively plentiful water, but on West Side districts that had less secure supplies to begin with.

Short said the MID has no surplus, but is putting all of its water to good use.

The sale to San Francisco would be possible because the district plans to build several small reservoirs to capture water that runs out the ends of its canals. This would free up water for the city to capture at Hetch Hetchy Reservoir on the upper river.

San Francisco is looking to the MID to help with an expected shortfall of about 27,500 acre-feet of water by 2035. An acre-foot is enough to cover an acre a foot deep. The MID has sold an annual average of 173,750 acre-feet to farmers over the past 20 years.

The city's other options include increased water conservation, recycling and groundwater use, as well as desalinization of seawater.

The city system serves about 2.5 million customers in San Francisco and parts of San Mateo, Santa Clara and Alameda counties.

This is one of the wealthiest regions in the world, what with Silicon Valley, the city's Financial District and other economic drivers. It likely would have little trouble paying a few hundred dollars per acre-foot, way beyond the $6.75 that the MID's farmers pay for their basic allotment this year.

The transfer appears to have several benefits, said David Zetland, author of "The End of Abundance: Economic Solutions to Water Scarcity." He also has researched water issues at the University of California at Berkeley and at UC Davis.

"First, it's more efficient to move water to those who will pay more," he said in an e-mail last week.

"Second, selling consumptive water to SF reduces pressure for SF to get it elsewhere (greater river diversions). Third, it improves the financial and economic situation for SF and MID."

Short said increasing San Francisco's stake in the Tuolumne supply also could help the district fend off efforts to release more of it into the lower river for fish.

The debate goes on about whether to build more big dams in California, something not done since the completion of New Melones Reservoir on the Stanislaus River and Don Pedro on the Tuolumne in the 1970s.

For now, transfers play an important role, even though they account for only about 5 percent of the state's supply, according to Hanak.

The Oakdale and South San Joaquin irrigation districts have been players, transferring water to the Stockton East Water District in recent years.

Some transfers go to waterfowl refuges. The MID and several other districts have been paid to release water into San Joaquin River tributaries to help young salmon get out to sea in spring.

A small percentage of the transfers are permanent, meaning the water rights go with the water. These can be especially pricey, such as the $5,000-plus per acre-foot in a pair of Kings County sales last year.

The MID would get nowhere near that kind of cash from San Francisco, as the sale would not involve the water rights. But it still could provide substantial money to invest in the district system, said Steven Ritchie, assistant general manager for the water enterprise at the San Francisco Public Utilities Commission.

"If anybody's ever going to do a transfer deal, it's got to work for everybody," he said.

Bee staff writer John Holland can be reached at (209) 578-2385.