On August 29, 2016, the California Water Commission (CWC) released a revised version of the draft regulations governing the application process for obtaining Proposition 1 funding for water storage projects and how the CWC will evaluate such applications.  This is the second version of draft regulations the CWC has proposed, with the first version released for public comment on January 29, 2016.

The revised draft regulations set forth the information that public entities seeking funding must include in their applications to the Water Storage Investment Program (WSIP).  At a high level, this information should describe the purpose for the water storage project and the benefits it will provide along with discussing the impacts the project could have on the environment and cultural resources.  More specifically, applications should include information such as:  a description of the project and its purpose; an explanation of the applicant’s eligibility, based on the type of entity the applicant is; an explanation of the project’s type and eligibility for funding; the amount of funding sought and total cost information for the project; the schedule for the project; its benefits to the public; and an operations plan that describes how the project will achieve its public benefits under various weather conditions.  The application should also discuss any impacts the project will have on groundwater basins, rivers, and the Delta, if the project could have an impact on the Delta.  The application should additionally state how the project will enhance the state’s water infrastructure and how the project will enhance regional water reliability.  The revised draft regulations also establish the means by which applicants must quantify the net benefits of their projects.  This requires a comparison of the economic and physical benefits of the project to any negative impacts the projects may have in the future.  The draft regulations provide guidance for estimating the monetary value of the project’s physical benefits to quantify those benefits and enable a more direct comparison of the net benefits of the project to the total costs for constructing and operating the project.

Once an application has been submitted, the draft regulations provide for a staff review to ensure completeness and that the applicant and project are eligible for funding under WSIP.  CWC staff would then commence a technical review of the project to verify claimed public benefits and their relationship to the project’s cost.  Under the draft regulations, staff would also weight the environmental value of the project’s ecosystem improvements based on designated ecosystem priorities and water quality.  Staff would then assign scores for five components:  public benefit ratio; relative environmental value for ecosystem and water quality; water system improvement, implementation risk; and expected return for public investment.  Of these, the components that have the most points associated with them are the expected return on public investment (100 possible points) and the public benefit ratio (40 possible points).  Projects would be given funding priority in ranks based upon their return on public investment component score, with those projects receiving a score of less than 70 (Rank 3) only receiving funding if any funds remain after all projects in Ranks 1 and 2 are funded to their requested amount.

The comment period for these revised draft regulations is open now and closes on October 3, 2016.  Comments can be submitted to the CWC via mail or email.  Additionally, the CWC is holding a public hearing on September 16, 2016 at 9:30 AM, where interested parties can submit written or oral comments on these regulations.  The text of the draft regulations can be found here.

For additional information please contact Brenda Bass at bbass@somachlaw.com.

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