Bureau of Reclamation Water Conservation, Efficiency, and Management Improvement Act Statement of Mark A. Limbaugh Assistant Secretary for Water and ScienceU.S. Department of the Interior Before the Committee on Energy and Natural Resources U.S. Senate April 19, 2006 Mr. Chairman and Members of the Committee, I am Mark Limbaugh, Assistant Secretary for Water and Science, U.S. Department of the Interior. I am pleased to appear today to talk about the drought conditions currently facing the State of New Mexico, and about how the Water 2025 program and legislation will work to address Western water supply needs. Introduction Chronic water supply problems in many areas of the West are among the greatest challenges we face in the coming decades. We are experiencing increasing demands for water as a result of exploding population growth, increasing water needs of urban areas, settlement of Indian water rights claims, and ecosystem needs, including compliance with the Endangered Species Act. These demands run up against limits imposed by already over-allocated watersheds and aging facilities even in non-drought years. The extended drought that we are currently experiencing magnifies already-stressed water supply conditions, particularly in important river basins such as the Middle Rio Grande and the Colorado River Basin. Crisis management is not an effective response to drought, nor is it an effective solution to long-term, systemic water supply problems. Today’s water supply issues require innovative, locally-based approaches that identify solutions in advance of water supply crises. The Water 2025 program embodies these principles. Through its competitive Challenge Grant program, Water 2025 recognizes that State and local governments should play leading roles in meeting the West’s water supply challenges, and that the Department of the Interior should focus its attention and existing resources on areas where scarce Federal dollars can provide the greatest benefits to the West and the rest of the Nation. The tools that the Water 2025 program relies on, including improved water management through conservation, efficiency and markets; removing institutional barriers to coordination; increasing collaboration among stakeholders; and researching and developing new technologies, are essential to heading off problems before they occur. Water 2025 also complements Reclamation’s Drought Program, which is designed to help plan for drought events and to respond to an emergency situation if it occurs. Both these programs help armor water users against the impacts of drought by maximizing the amount of water available under drought conditions. My statement today will discuss both of these programs, focusing on how they are being applied in New Mexico and throughout the West. Water 2025: Preventing Crises and Conflict in the West Water 2025 is designed to enable Reclamation to take action in advance of a water supply crisis by focusing Federal financial and technical resources on geographical problem areas, or “Hot Spots,” identified on the Potential Water Supply Crises by 2025 illustration (the “Hot Spots Illustration”). As shown on the Illustration, there are numerous Hot Spots in New Mexico, including the Rio Grande and Pecos River Basins. The Hot Spots Illustration is currently being updated to reflect the current state of water conflicts in the West. A key element of Water 2025 is the Challenge Grant Program, which relies on local initiative and innovation to identify and formulate the most sensible improvements for local water systems. Water 2025 promotes improved water management through modernizing facilities, establishing alternative strategies such as water banks, and taking advantage of water markets. To foster innovative solutions, Water 2025 creates partnerships and promotes collaboration with state and local water management agencies. The Challenge Grant program seeks out projects at the local level that stretch existing water supplies. Reclamation funds up to 50% of the costs of implementing such projects. Examples of activities funded under Water 2025 include canal lining and piping, installing measuring devices and automation technology to better control water deliveries and management, and creating and expanding water markets. Water 2025 authorizing legislation was introduced in the Senate by U.S. Senator Pete Domenici on April 6, 2006, as S. 2561. If enacted, S. 2561 would provide long-term authorization for the Water 2025 Challenge Grant program, and expand Reclamation’s authority to enter cooperative partnerships for research and development of water management issues. For the first two years of Water 2025, Fiscal Years 2004 and 2005, Water 2025 was funded through the annual appropriations process, which also provided year-to-year authority for the Challenge Grant Program. The ten-year authorization provided in Senator Domenici’s bill will ensure the long-term effectiveness of Water 2025. S. 2561 authorizes the Secretary to enter into grants and cooperative agreements with Western States, Tribes, irrigation districts, water districts, or other organizations with water delivery authority. Consistent with the existing Water 2025 program, under these grants and cooperative agreements, the Federal government would fund up to 50% of the cost of improvements that will conserve water, increase efficiency, facilitate water markets, enhance water management, or implement other actions to prevent water-related crises and conflicts. Projects funded under the authority must be located in watersheds with a nexus to Federal water projects in the West. Grant and cooperative agreement funding awarded under the bill is non-reimbursable. If Water 2025 is to have a future, it must have long-term authorization. S. 2561 is largely consistent with the Administration’s legislative proposal for permanent authorization for the Water 2025 Program. The Department is committed to working with the Committee on Energy and Natural Resources and the House Resources Committee to secure passage of this critical bill. Passage of S. 2561 will ensure that irrigation and water districts, Western states, Tribes, and other non-Federal entities with water delivery authority can leverage their funding and thus have incentives to propose innovative solutions to pressing and long-term water management challenges. Water 2025 is key to enabling the Bureau of Reclamation to reward flexibility and innovation and proactively address potential conflicts over scarce water resources. The Administration is pleased to support this bill. Water 2025 has proven that leveraging Federal dollars with our partners can provide on-the-ground improvements in water management infrastructure that can help prevent water crises where they are most likely to occur. To date, Reclamation has awarded funding for 68 Challenge Grants in 16 states, including 62 projects by irrigation and water districts and 6 more by Western states. Collectively, the 68 projects represent almost $60 million in improvements, including a non-Federal contribution of $44 million and a Federal government contribution of $15 million. In other words, for every dollar the Federal government has invested, there has been about $2.90 in non-Federal investment. Based on estimates in the project proposals, the 68 funded projects collectively could save up to 285,000 acre-feet of water per year once fully implemented. In addition to the Challenge Grant Program, Water 2025 has also funded cost-shared, competitive grants to improve water purification technology and make it more affordable. In FY 2005, 16 pilot, research and demonstration projects were funded. Including non-Federal cost share contributions, the 16 projects represent a $6 million investment in improving water purification technology. S. 2561 includes a provision providing long-term authorization for this important research effort. In the past year, the Department has been working closely with the Office of Management and Budget (OMB) to develop long-term strategic planning goals and performance measures for Water 2025. The long term goals include increasing water supply certainty and flexibility, diversifying the water supply, and preventing crises through added environmental benefits in many watersheds, rivers and streams in the Hot Spot areas. Use of these performance measures to track our progress toward achieving the program’s strategic goals will ensure that the on-the-ground achievements of the program are maximized and will strengthen our accountability to stakeholders. Water 2025 Efforts in New Mexico Since the inception of Water 2025 in 2004, over $5 million in Federal program funding – along with matching private and state contributions – has been committed to addressing water supply issues in New Mexico. This funding supports partnerships with the Middle Rio Grande Conservancy District and the New Mexico Interstate Stream Commission, as well as Challenge Grants to the San Juan Dineh Water Users Association, the City of Las Cruces, the Elephant Butte Irrigation District, and the State ofNew Mexico. Partnership with the Middle Rio Grande Conservancy District (FY 2004, 2005, and 2006) Reclamation entered into a 50-50 cost-share partnership with the Middle Rio Grande Conservancy District in 2004 to implement water efficiency improvements inside the District. Planned improvements include the automation of water control structures, improved water measurement, canal lining, and pipe systems. Reclamation has committed $2,540,925 to these efforts to date, and has dedicated approximately $1 million more in FY 2006. Through this partnership, the District has installed new software to upgrade its supervisory control and data acquisition (SCADA) system. Several water control gates have been installed at key locations, which will provide automated control and measurement at those sites. These improvements will provide better service to District water users and assist in meeting the requirements of the Endangered Species Act for protection of the Rio Grande silvery minnow. Partnership with the New Mexico Interstate Stream Commission (FY 2006) In 2006, Reclamation is entering into an agreement with the New Mexico Interstate Stream Commission (ISC), providing approximately $1 million in Water 2025 funding to improve water efficiency and supplement water supplies on the Pecos River. The funding will be used for pipelines that will deliver water from wells in the Seven Rivers area to augment Brantley Reservoir. State of New Mexico (2005, Water 2025 Western States Grant) The State of New Mexico will rehabilitate a Pecos River gage so that New Mexico’s deliveries to Texas under the Pecos River Compact can be measured more reliably. Accurate measurement of water delivered to Texas is a critical step in helping to avoid conflicts between New Mexico and Texas. The total project will cost $146,660 with a Water 2025 contribution of $59,480. San Juan Dineh Water Users Association (2004, Water 2025 Challenge Grant) The San Juan Dineh Water Users Association (Association), which serves water users in the Navajo Nation near Shiprock, New Mexico, is using its Challenge Grant to replace three unlined canal laterals with underground pipelines, potentially saving 5,500 acre-feet of water per year for the Association’s water users. The Association has completed work on one of the laterals and will begin construction on the other two this fall. This project will decrease demand on the San Juan River, which will benefit the endangered Colorado pikeminnow and the razorback sucker. The total project cost is $751,000, with a Water 2025 contribution of $200,000. City of Las Cruces (2005, Water 2025 Challenge Grant) The city will install pumps on the Elephant Butte Irrigation District water distribution system so that the city's Burn Lake can be used as a regulating reservoir for storm water runoff, operational spills, and irrigation water. The city also will install pumps so that Elephant Butte Irrigation District water stored in Burn Lake can be returned to the district as needed. The project is expected to save 3,750 acre-feet of water a year. The total project cost is $174,889, including a Water 2025 contribution of $86,350. Elephant Butte Irrigation District (2005, Water 2025 Challenge Grant) The district will install 100 flow control meters to implement its metering and monitoring plan to meter all farm deliveries using telemetry. The project is estimated to save 8,000 acre-feet of water per year, with 75,000 acre-feet better managed. The total project cost is $615,000, including a Water 2025 contribution of $300,000. In addition to the Water 2025 projects outlined above, Reclamation works proactively with Pueblos and tribes throughout New Mexico through its Native American Affairs Program, to assist with a variety of water resource needs. Several of these projects complement Water 2025 program efforts to improve water management on the Middle Rio Grande and its tributaries. Four hundred thousand dollars has been provided to the Pueblo de Cochiti through a Self- Determination Act contract for rehabilitation of Middle Rio Grande Conservancy District ditches that serve the Pueblo. The Native American Program has also funded projects for irrigation system improvements at the Pueblos of Sandia, Santo Domingo, and San Felipe. Drought Program Efforts in New Mexico Reclamation’s approach to addressing drought conditions begins with storing water for times of shortage. During the recent prolonged drought, our reservoirs have performed well, meeting water requirements in most areas of the West. Reclamation responds to drought emergencies using its authority under the Reclamation States Emergency Drought Relief Act of 1991. Title I of the Drought Act provides Reclamation with the flexibility to meet contractual water deliveries in times of drought by allowing Reclamation, on a nonreimbursable basis, to buy or lease water for fish and wildlife benefits, helping to meet requirements under the Endangered Species Act and to alleviate pressure on contractors’ water supply. Since Fiscal Year 2000, approximately $6.25 million has been spent through the Drought Program in New Mexico on water acquisition projects, primarily on the Middle Rio Grande and on the Pecos River, along with approximately $2.2 million spent on well projects. The authority for Title I expired on September 30, 2005, but S. 648, legislation to extend the expiration date to 2010 has been passed by the Senate, and companion legislation in the House, H.R. 2925, received a hearing in the House Resources Subcommittee on Water and Power on September 27, 2005. Additionally, the Drought Act includes provisions for Reclamation participation in water banks established under state law; facilitation of water acquisitions between willing buyers and sellers; acquisition of conserved water for use under temporary contracts; and use of facilities for storage and conveyance of project and nonproject water. The Drought Program focuses on improving management of existing water supplies during times of drought rather than on increasing storage; the only permanent construction authorized under the Act is groundwater wells. Reclamation’s Drought Program is often the last resort for smaller, financially-strapped entities, such as towns, counties, and Tribes that lack the financial capability to deal with the impacts of drought. Reclamation also actively engages in drought planning, working with States— including the State of New Mexico—water users, and other entities to prepare in advance so that when drought occurs there is agreement on the appropriate response. Reclamation’s Water Conservation Field Services Program addresses drought conditions on a proactive basis, providing technical advice and cost-share financing for water management and conservation improvements before a drought hits. Reclamation is also working closely with other Federal agencies, associations and water users both at the Reclamation project level and at the agency level to stretch otherwise limited water supplies and to protect water users during droughts. For example, Reclamation is working with the USDA to deploy drought action teams in drought stricken areas of the West to coordinate the communication and delivery of drought-relief resources, and is working to deploy such a team in New Mexico. Reclamation has also established an agreement with the Army Corps of Engineers and other partners to cooperate on water management programs and activities. Finally, in operating our facilities, we work closely with other agencies to monitor and share data on water conditions and to coordinate water management to help minimize effects of the drought on communities and citizens of the West. Conclusion The Bureau of Reclamation has a long history of effective and responsive water management in good times and bad. I believe the efforts I have outlined today demonstrate that the Bureau of Reclamation is providing leadership and innovation in assisting the West to meet the tremendous challenges of the future. To enable us to continue to improve existing water management strategies, the Administration urges passage of S. 2561, which will effectively focus limited resources as the Department of the Interior works with States, Tribes, local government, and the private sector to meet water supply challenges. That concludes my testimony. I am pleased to answer any questions.