In 2014, Proposition 1 set aside $2.7 billion to fund the “public benefit” portions of water storage projects through the Water Storage Investment Program. Water storage for the environment played a crucial role in determining how much funding the projects would receive. One of these projects, Sites Reservoir, offers a novel approach to storing water to benefit freshwater ecosystems when they need it most. We talked to Jerry Brown, executive director of the Sites Project Authority, to learn more about plans for the reservoir and its ecosystem water budget.

Can you tell us about Sites’ unique approach to managing water for the environment?

From my perspective, the environmental water management portion of the Sites project is probably its most innovative part. For the first time, it introduces the idea of creating and dedicating an asset for flexibly managing water supply for environmental purposes. We already do this today to comply with environmental regulations, but Sites marks a shift to making the environment a priority, which is not how we currently manage water. We will contract a share of storage space in the reservoir—about 240,000 acre-feet—for environmental purposes. But the space isn’t valuable without water. So we are also contracting to dedicate a proportionate share of the diverted water toward filling that space—around 17%. In total, this is projected to amount to a little over 50,000 acre-feet of new water supply per year on average for California Department of Fish and Wildlife’s (CDFW) environmental priorities.

How are you structuring the governance of this water? And who pays the associated operations and maintenance costs?

The governance is a work in progress. We were awarded Proposition 1 funds for two very specific ecosystem objectives out of the 16 that CDFW identified. CDFW will be the ultimate decision maker on allocating this water—this is one possibility for how the governance is set up. Another possibility with greater potential, in my opinion, involves CDFW flexibly managing this asset to meet any of the 16 ecosystem objectives, instead of just the two that have been singled out. This would make it possible to include more stakeholders and interested partners in discussions about how to make the most of this environmental water in different years. It’s no different from how any other operator manages water resources.

Operations and management (O&M) is a perplexing issue. We have a “beneficiary pays” system, so we cannot subsidize the state’s O&M costs—including the O&M for this environmental water. But we can get creative to find a solution. We’ve suggested that the state could use some of their water to generate revenue to support costs of their O&M share. It’s unclear if CDFW has the capacity to operate as a water manager because their prime duty traditionally is regulation.

Do you see opportunities for operating the whole group of Proposition 1 projects in a coordinated way to boost environmental benefits?

I do. The state is an investor in each of these seven projects, and owns an asset that they can control. In making awards under Proposition 1, the state agencies didn’t think of how the projects related—each was individually evaluated. But there’s definitely an opportunity to grow benefits by operating in a coordinated fashion. It’s critical that Proposition 1 dollars have a successful outcome, because if we’re going to need more state and federal money to support California’s water system, we need to show that the dollars invested bring a positive return. It’s in everybody’s best interest to have coordinated oversight and operation for that reason, plus it can create more value for ecosystems.

Last fall Governor Newsom announced that the state would assemble a strike team to facilitate permitting for water projects. How is the strike team helping the process?

The strike team is the most significant development that’s benefitted the project timeline. It’s helped with coordination between state and federal agencies, with a concerted effort to expedite—but not short-cut—the process. Nobody wants us to cut corners or sidetrack the process; the rules are there to help us make better decisions.

But we also don’t have a lot of time, so we have to act with urgency. Our investors can’t decide to go forward until they know they have a permittable project that they can afford; this ultimately relies on evaluations of state and federal regulatory agencies. Another key decision point is the water rights process. It takes time and substantial deliberation to get to a point where the State Water Board can actually make a decision to grant the project a water right. I think the governor’s effort seeks to strike the right balance on this tension between urgency and due diligence.