Shifting Politics of Water

VENTURA — In the West, the saying goes, water flows uphill toward power and money. For almost a century, these criteria have directed the precious liquid toward Los Angeles. Now, for the first time, power and money are channeling water in other directions: San Diego, Nevada, Phoenix, Northern California, even Fort Worth, headquarters of the financiers Sid and Lee Bass.

The result will not be a drought in Los Angeles. The metropolis is still too rich and powerful for that. But the shifting direction of water could lead to a dramatic perestroika at one of the region’s most venerable power centers, the Metropolitan Water District. That, in turn, could reshape water politics throughout the Southwest, with far-reaching ramifications for the ecology of the San Francisco Bay, the agricultural economy of the Imperial Valley and the future urban growth of big cities from Las Vegas to San Diego.

For 70 years, the Met has been the dominant player in Southern California water politics. Designed to serve as a huge water “wholesaler” for 27 cities and water districts, the agency has evolved into a powerful advocate of more water for Southern California, forging political alliances and financial relationships along the way. Since the drought in the late 1980s, however, the Met has been increasingly plagued with intramural strife.

Its problems fall into three categories: water supply, water quality and water cost. Traditionally, the agency focused on bringing an ever-larger quantity of water into the region in order to accommodate more growth. More recently, quality and cost have become big issues, especially in the internal wars between water “haves” (like Los Angeles, which has the Owens Valley) and and the “have-nots” (like San Diego, which relies entirely on the Met).

In particular, San Diego, always a restive and reluctant member of this Los Angeles institution, demanded special treatment. It feared the Met’s other members would force San Diego to pay for the bulk of the Met’s $2 billion reservoir near Hemet. At the same time, San Diego demanded that the Met improve its water quality by mixing more high-quality water from Northern California with the brackish water from the Colorado. To strain matters even more, supply became an issue again. Additional growth in Arizona appeared likely to cut into the Met’s Colorado River supply, thereby threatening the agency’s ability to fill its new Eastside Reservoir.

Until a few months ago, however, things were beginning to look up for the Met. At the end of 1994, the agency won over Interior Secretary Bruce Babbitt by ponying up $30 million to solve water-quality problems in the San Francisco Bay-Sacramento Delta region. In return, the Met asked Babbitt for permission to store more of its water in the reservoirs of the Colorado River, a move that would improve Southern California’s water supplies at the expense of Arizona’s water rights. (For decades, the Met has taken unused water belonging to Arizona out of the Colorado.)

To obviate expected opposition from Arizona, the Met sought out political support in Nevada, the third state affected by management of the lower Colorado River. Water agencies in Las Vegas, where urban growth is running ahead of available water supplies, are especially thirsty. So the Met and the Southern Nevada Water Agency agreed to jointly line the earthen All-American Canal in the Imperial Valley and split the additional water supplies the project would create.

Then the problems began. In the peculiar world of Western water, the Las Vegas deal came under fire from Northern California environmentalists. Because the Met draws water from both the Colorado River and the State Water Project, the fate of Northern California’s estuaries are intertwined with the fate of urban and farm water supplies in Nevada and Arizona. Every drop of Colorado River water the Met can squeeze out of neighboring states is one less drop Southern California needs from the State Water Project -- and, therefore, one more drop available to restore the fragile ecology of the Bay and the Delta. If the Met had so much surplus Colorado water that it could give some away to Caesar’s Palace, the environmentalists screamed, something must be awry. Gov. Pete Wilson complained, and, in March, the Met killed the Vegas deal altogether.

Enter the Bass brothers. While the Met was forging its ill-fated deal with Las Vegas, the acquisitive brothers, through their family-owned Western Farms, were aiming to corner the market on surplus water in Southern California. For several years, the Basses have been buying up thousands of acres of farmland in California’s Imperial Valley, acquiring the water rights along with it. They’re gambling they will be able to take Colorado River water purchased from the federal government for $12 per acre-foot and resell it to a potential user at a much higher price. Last year, the Bass brothers began trying to peddle the water at $400 per square foot -- triple the going rate. First, they approached the Met, which said the price was too high. Then, they went to Las Vegas, which also declined. Finally, they went to San Diego -- and made a deal.

It’s actually hard to tell just who is manipulating whom on the Imperial Valley water proposal. The Met’s view is that the Bass brothers are simply using San Diego to hold up Southern California for a couple of billion dollars, draining the region of its prosperity to make a profit.

But San Diego may also be using the Bass brothers to gain more leverage over the Met. If San Diego buys a half-million acre-feet a year from the Bass brothers, the Met will be in big financial trouble. The Met’s 26 other water agencies will have to foot the bill for the Eastside Reservoir, which few of them want or need. (San Diego would probably still need the Met’s Colorado River aqueduct to move the Bass water to the coast.) The Bass threat has given San Diego significant power inside the Met for the first time in decades.

So, in the last few weeks, San Diego has sought to exploit its new leverage by demanding a special, Quebec-like relationship with the Met. Among other things, San Diego has asked for a guaranteed 50-50 blend of Northern California and Colorado River water (the current blend is 25-75); permission to “wheel” some Bass water through the Met’s aqueduct (or trade it to the Met for other water), and assurances that the cost of the Eastside Reservoir and other capital projects won’t get out of hand. In return, San Diego has promised to buy a certain amount of Met water and support the agency’s plan to “bank” more water in the Colorado River reservoirs.

At a historic meeting earlier this month, the San Diego plan received a warmer reception from the Met than anyone had expected. Maybe that was because the Met realizes that, with the Basses on San Diego’s side, it faces new constraints. Last month, Arizona passed a law calling on its water agency to draw the state’s entire allotment out of the Colorado River and pump it into Arizona’s groundwater basins, a move that would strip the Met of its ability to use surplus Arizona water. According to Met officials, the bill was passed with the help of a Bass operative from the Imperial Valley.

For the past 10 years, there’s been a lot of speculation about whether the Met has become a white elephant, a lumbering beast unable to execute the nimble twists and turns required in today’s free-flowing water market. The San Diego story certainly bolsters the contention that the Met is too centralized and needs to give its members more maneuvering room. But the labyrinthine tale of the Met’s recent dealings serves as an important reminder that this giant agency -- and the two giant metropolises that it serves -- stand at the center of an intricate web of relationships stretching from Oroville to Phoenix and beyond. This web was woven together to enable Los Angeles and San Diego to become great cities. That goal having been achieved, it’s unlikely it will unravel now. Environmentalists may complain about Delta purity, Arizonans may want their share of the Colorado, but there will always be a Met, perestroika and all.