The board of the Oakdale Irrigation District agreed Tuesday to look into a one-year water sale to San Francisco.
The length of the sale is less than the city seeks, but a spokesman there said officials "remain open to any potential OID transfer scenarios."
Other details, including the amount of water and the price, have yet to be negotiated. They could be discussed at a Dec. 18 public meeting, OID chairman Frank Clark said.
The move came two months after fierce protests stopped proposed San Francisco water sales by the neighboring Modesto Irrigation District.
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A San Francisco official said last week that it seeks 2,240 acre-feet per year from the OID as a dry-year backup — the same as in the initial MID sale — and possibly more in future deals.
The same general issues surfaced in the hour of public debate that preceded the OID board's closed session on the matter Tuesday. Backers said water transfers could help pay for canal system upgrades, while critics warned of dry-year shortages for farmers.
"I would assume that once San Francisco got their hands on our water, they would be very much involved in wanting to keep the water," cattle rancher Ken Krause said.
Critics said that if the OID has water to sell, it should offer it to farmers seeking to annex their land to the district. This would ease pressure on groundwater, they said.
The OID has been a key player in the water commodity market that has emerged in California over the past three decades. The district has relatively strong rights to the Stanislaus River, making it attractive to distant locales seeking to boost their supplies without building new reservoirs.
San Francisco offered $700 per acre-foot to start in the first deal with the MID, which taps the Tuolumne River downstream of the city's Hetch Hetchy Water and Power System.
That might not be the price the OID gets, but it does indicate that the city is willing to pay a premium for supplemental water that's guaranteed in dry years.
The OID can draw up to 300,000 acre-feet from the Stanislaus River each year, depending on the Sierra Nevada snowpack. The use is less than that because of conservation efforts and development of some of the district's territory.
The district sold a total of about 41,000 acre-feet per year in a pair of transfers that expired in recent years. One was to domestic users in the Stockton area, the other for releases to enhance the lower Stanislaus River fishery.
Supporters of exploring the San Francisco sale noted that these transfers were completed without any damage to the district's water rights.
Official: City's name draws protest
"Nobody ever squawked, nobody ever said a word, but throw the word 'San Francisco' in there and everyone goes crazy," Clark said.
The OID also is negotiating a sale of up to 2,400 acre-feet to the city of Brisbane, now supplied by next-door San Francisco.
General Manager Steve Knell said transfers protect the OID's rights because the water is put to the "beneficial use" required by state law.
He said transfers make sense because the district's rights do not allow it to carry over excess water from one year to the next. The vast New Melones Reservoir southwest of Angels Camp holds much of the OID's water, but it is controlled by the federal government.
Need to pay for upgrades
Knell said the district needs to pay for system upgrades with a mix of high-price sales to urban areas and expansion of lower-priced irrigation.
A prominent example of the latter is a plan to supply about 7,300 acres of new almond orchards near Knights Ferry.
The board voted 5-0 on Tuesday to apply for annexation of this land, owned by Trinitas Partners. The Stanislaus Local Agency Formation Commission could consider the request in February.
San Francisco seeks extra water for a system that serves about 2.6 million people in four Bay Area counties.
"Our long-term dry year water supply needs are still the same as when we were negotiating with the Modesto Irrigation District," said Tyrone Jue, director of communications for the San Francisco Public Utilities Commission, in an e-mail. "Ideally, we would be looking for a multiyear water transfer to cover our projected water shortfalls, but we're still early in the discussion phase and remain open to any potential OID transfer scenarios."
The city would not get water directly from the OID. Instead, the district would deliver water to the MID via an existing connection near Claribel Road, northeast of Modesto and south of Oakdale. The Modesto district in turn would let San Francisco take an equal amount of water at the Hetch Hetchy diversion.
Bee staff writer John Holland can be reached at firstname.lastname@example.org or (209) 578-2385.