The SFPUC is set to vote Tuesday on new water restrictions that would be implemented should the state face another serious drought. (S.F. Examiner file photo)

The San Francisco Public Utilities Commission is negotiating with the Modesto Irrigation District to purchase 2 million gallons of water per day over the next 10 years. Agency officials describe the transfer as necessary insurance against droughts, but critics say the water is unneeded and will cost San Francisco ratepayers money.

“Every year is potentially the beginning of an extended drought,” said Steve Ritchie, assistant general manager of water enterprise for the SFPUC. “Planning for these extended drought scenarios is prudent water management.”

The Bay Area Water Supply and Conservation Agency estimates the potential economic impacts of water shortages in its four-county service area as exceeding $1 billion per year of drought.

But the deal’s critics call the proposal unnecessary and worry that it could be the precursor to a significantly larger and more costly water purchase.

“San Francisco does not need more water,” said Peter Drekmeier, Bay Area program director of the Tuolumne River Trust.

Because The City uses one-third of the conservation agency’s water, it will be obligated to pay for one-third of the water transfer. That would be the case even though San Francisco and its wholesale customers in San Mateo, Alameda and Santa Clara counties have been reducing the amount of water they use over the past few years, Drekmeier said.

Yet as a so-called take-or-pay contract, San Franciscans would have to pay for the water each year whether or not it were ever needed.

Critics say that isn’t fair.

“San Franciscan ratepayers would be subsidizing the Bay Area Water Supply and Conservation Agency customers,” Drekmeier said.

Critics also warn that the deal could be a precursor to a larger transfer of 22 million gallons per day.

“The 2MGD transfer in itself is not a big deal since it represents less than 1 percent of the water delivered through SFPUC,” said Charlotte Allen, co-chairwoman of the Sierra Club’s San Francisco Bay Chapter Water Committee.“But it could be a precursor to a larger 22MGD transfer now under discussion that would have much larger financial impacts.”

Ritchie said the SFPUC has considered this possibility, but has not yet begun evaluating it.

The Modesto district and the San Francisco agency have been negotiating the smaller contract since last fall. A vote by the Modesto Irrigation District has been delayed several times due to a threatened lawsuit from the city of Modesto. After Modesto votes, the SFPUC will vote on the matter.

San Francisco’s share of the transfer would be more than $5 million over the 10-year contract. Art Jensen, chief executive officer of the Bay Area Water Supply and Conservation Agency, said the deal’s costs to typical residents would mean an increase of about one-quarter of 1 percent on their water bills.

“This is our drought insurance,” Ritchie said. “Like any other type of insurance, we must pay for this water every year though we will only capture and use it during drought years.”

Based on 2008 projections, the water would only be needed every third to fifth year, Ritchie said. But as demand increases with population growth, he said, San Francisco would use this transfer an average of two out of every five years.

For the same amount of money, Drekmeier said, The City could save much more than 2 million gallons per day through water conservation. “Through water audits, water budgets, incentives to replace grass with drought-tolerant plants and rebates for smart irrigation controllers and drip irrigation, we could save a lot of water,” he said.

Meanwhile, the Tuolumne River Trust is lobbying to terminate the negotiations out of concern that the water transfer could further harm that river. More than 60 percent of the river is currently diverted and used for agriculture and urban uses.

“As a result, the salmon population has crashed from historic highs of 130,000 fish per year to less than 1,000 in five of the past six years,” Drekmeier said.

Ritchie does not see the transfer affecting the river’s fish population.

“The conclusion of our analysis is that it would not have an effect on the salmon,” he said.

Closer to the water’s source, some residents of Modesto don’t believe their city has water to sell. They believe that in a few years, they won’t even have enough surface water to meet their city’s needs and will have to rely more heavily on groundwater.

“Any transfer would cause a large drain on our groundwater sources,” said Modesto farmer John Duarte. “Modesto is largely agriculturally based, so when you affect our water supply, you affect our entire economy. … This is water that we commit to selling for 50 years — a fixed delivery — no matter how big the drought, we still have to deliver this water to S.F.”

Others, like self-employed agricultural and environmental researcher Reed Smith, a Modesto water user, believe that the water transfer will damage Modesto’s economy.

“The water sale will permanently destroy Modesto and the surrounding areas from economic loss,” he said.

But the Modesto district disagrees.

“Hydrology studies show that even during the worst drought years, the transfer doesn’t impact the district’s ability to make water available to its irrigation customers or the city of Modesto,” said district spokeswoman Melissa Williams.

The potential transfer would generate revenue that could be used toward improving Modesto’s irrigation system infrastructure, paying for Don Pedro Reservoir’s re-licensing, and offsetting costs of legislative and regulatory mandates, Williams said.

kfigard@sfexaminer.com

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