SGMA Starts to Bite
By Geoff Vanden Heuvel, Director of Regulatory and Economic Affairs
The Sustainable Groundwater Management Act (SGMA) was passed in 2014 and is designed to eliminate the “undesirable results” of taking more water out of the ground than can be sustainably replenished. The law required the creation of local Groundwater Sustainability Agencies (GSAs), which were then granted significant powers to regulate groundwater extraction. Allowing each local agency the right to design and implement its own plan does open up the possibility that there will be different rules and fees in different locations – and that is in fact what is happening. Below are recent examples of how two different local GSAs are implementing their plans.
Madera County GSA
The Madera County Groundwater Sustainability Agency (MCGSA) covers most of the irrigated land in Madera County that is not part of a water district. The governing board of MCGSA is the Madera County Board of Supervisors. MCGSA encompasses land in both the Madera and Chowchilla Subbasins and is almost entirely dependent on groundwater for irrigation. MCGSA adopted a Groundwater Sustainability Plan (GSP) in January of 2020 that lays out several projects and management actions that are designed to eliminate the “undesirable results” identified by SGMA by the year 2040.
A couple of years ago, MCGSA imposed a per acre fee to pay for the administration of the MCGSA. Earlier this year MCGSA adopted a per acre groundwater extraction limit. This farm unit water budget dictates how much each landowner can use in an individual year. What is under consideration now is a fee to pay for the projects and management actions that were identified in the GSP.
The major projects in the plan include:
• The construction of recharge basins and other sites to capture surplus flood flows.
• An investment in a surface water supply from the proposed Sites Reservoir in the Sacramento Valley.
Management actions included in the plan:
• A domestic well mitigation program.
• A Sustainable Agricultural Land Conservation (SALC) program to pay landowners a fee to fallow their ground.
• A program to provide owners of land never irrigated a payment to keep those lands unirrigated.
The new proposed fee is to pay for these costs. The proposed fee is based on a per acre charge and NOT a per acre foot of water used charge. These assessments are subject to what is called a Proposition 218 process, whereby the Board of Supervisors adopt them subject to a process where the landowners who will have to pay them will have an opportunity to protest those fees. The risk is that if the landowners are not willing to pay the fees, the GSP likely fails, which would trigger the State Water Resources Control Board coming in and taking control over of the area.
MCGSA is proposing a different fee structure for lands in the Madera Subbasin than for the lands in the Chowchilla portion of the GSA. That is because Proposition 218 requires that fees be based on benefits, and the costs and benefits are different in the two areas. Proposition 218 also only allows fees to be set for five years, which means the fee can be continued after five years, but at a rate no higher than the rate for year five. To increase the rates after year five, another rate study and opportunity for protest must be given.
The chart below shows the proposed rate per acre and the allocated water per acre in inches of Evapotranspiration (ETc), which is how water extraction is measured in the MCGSA.
Here are the proposed rates:
*Note the allocation reduces at a rate of 2% per year until 2026 when it reduces 6% per year.
MCGSA hosted a public workshop to update stakeholders on preliminary fees and cost projections. You can read the entire presentation here.
East Kaweah GSA
Another GSA that is in the middle of implementation is the East Kaweah GSA (EKGSA). This
agency encompasses lands that are located near the foothills of the Sierras where the groundwater aquifer is relatively shallow. Much of this GSA has access to surface water, but about 25% of it is groundwater-only dependent. The drought of the last two years has caused a significant drop in groundwater levels in this area and the EKGSA 11-member
board, 10 of whom are farmers, are imposing an emergency groundwater extraction cap on their landowners immediately. The amount of allowable extraction will be capped at 1.65 acre-feet per acre measured by ETc, with 0.85 of the 1.65 available at no charge and the remaining 0.8-acre feet charged a fee.
The EKGSA in this first year will allow transfers so that landowners can purchase allocation from other landowners who are willing to sell. There likely will be sellers since EKGSA allocated groundwater extraction credits to all acres in its jurisdiction, irrigated or not. There are some landowners who do not pump groundwater that have been given allocation that
they can turn into cash by selling. There was a very informative public workshop on all this which was recorded, and you can see here.
You can also view copies of the presentations from the EKGSA here.
Greater Kaweah GSA and Mid Kaweah GSA are also in the process of imposing groundwater extraction limitations. I will share more about this in the future.
Milk, Dairy and Grain Market Commentary
By Sarina Sharp, Daily Dairy Report
Less milk means less butter. Churns made just 159.4 million pounds of butter in October, down 1.6% from a year ago. Stiff competition for cream and supply chain tangles likely kept a lid on output in November as well. USDA’s Dairy Market News notes that in the East, “widespread logistical issues, including driver shortages and delivery delays, pose a greater hindrance to cream-based operations than tighter cream availability does.” Butter stocks are falling seasonally, and prices are on the rise. CME spot butter climbed back over the $2 mark today and closed at $2.0025 per pound, up 1.25ȼ for the week.
Read the entire MPC Friday Report below