Reclamation Law:

Changes Needed Before Water Service Contracts Are Renewed

RCED-91-175: Published: Aug 22, 1991. Publicly Released: Sep 19, 1991.

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Pursuant to a congressional request, GAO: (1) identified environmental and water use problems associated with the irrigation practices carried out under the Bureau of Reclamation's water service contracts in the Central Valley Project (CVP); and (2) determined whether contract renewals would allow such problems to continue.

GAO found that: (1) agricultural drainage has degraded the quality of the San Joaquin Valley's water supply and soil, poisoning wildlife and threatening agricultural productivity with selenium accumulation and increasing salinity; (2) since most CVP water is dedicated to irrigation through water service contracts, the supply of water available for wildlife habitat is not adequate; (3) some farmers use CVP water to produce crops that are also eligible for subsidies under the U.S. Department of Agriculture's (USDA) commodity programs, causing Congress to express concern over the apparent inconsistency between the Bureau's programs for increasing agricultural production through inexpensive subsidized water and USDA programs for raising prices while limiting production; (4) increased irrigation efficiency and conservation could reduce environmental degradation caused by agricultural runoff and drainage, while freeing water currently diverted for irrigation and other uses, but the low cost of federal irrigation water is a disincentive to increased irrigation efficiency; (5) the Department of the Interior believes that, since long-term renewal of contracts for the same quantities of water is nondiscretionary, it is not required to change its provisions as a result of environmental impact statements; and (6) continuing irrigation practices carried out under existing contract provisions compromise other national interests such as environmental protection and wildlife conservation.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In June 1992, the House passed legislation limiting contract renewals to 20 years, requiring environmental impact analyses, and eliminating the 1956 act provisions. Legislation addressing CVP passed in the Senate, but does not alter contract renewal. Differences will be addressed in conference.

    Matter: To provide the Department of the Interior with greater flexibility to manage Bureau of Reclamation water in CVP in the most effective and efficient manner, Congress should: (1) place a moratorium on all CVP contract renewals, while temporarily extending existing contracts; and (2) amend the 1956 act to explicitly allow contract renewals for lesser quantities of water and shorter periods of time so the Bureau can periodically assess water use.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Interior currently has environmental impact analyses underway for current contract renewals and the Bureau of Reclamation is developing a strategy and schedule for completing environmental review for remaining contracts.

    Recommendation: The Secretary of the Interior should determine the effects of renewing CVP water service contracts for the same quantities of water for long terms. This impact analysis should include: (1) an analysis of whether the water supply could be more effectively used to reduce environmental degradation and meet wildlife habitat needs and other emerging water needs in the state; and (2) a demonstration of the extent to which problems associated with water service contracts can be mitigated by changes in the contract terms, including consideration of market mechanisms to promote more efficient water use and conservation.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: Interior concurs with the recommendation but has not yet completed analyses. Interior states, however, that provisions covering the right to long-term renewal and quantity of water are not subject to change except as required by applicable law.

    Recommendation: The Secretary of the Interior should incorporate into renewed contracts changes in contract terms identified as likely to mitigate problems associated with water service contracts.

    Agency Affected: Department of the Interior


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