Lois Henry

Saturday, Feb 16 2013 10:30 PM

LOIS HENRY: Another water deal is not as simple as it looks

By Lois Henry

There's nothing like a water deal to bring out big money, big ideas and even bigger pitfalls.

And Rosedale Rio-Bravo Water Storage District has come up with one doozy of a deal.

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Lois Henry hosts "Californian Radio" every Wednesday on KERN 1180 AM from 9 to 10 a.m. You can get your two cents in by calling 842-KERN.

It has entered into escrow to buy 3,300 acres of the old Onyx Ranch east of Lake Isabella for $25 million.

The prize: potentially 4,000 to 6,000 acre feet a year of water from the South Fork of the Kern River.

Rosedale's plan is to move most of that water through Lake Isabella in partnership with one or more other local water districts and use it as a buffer against drought and reduced yields from the State Water Project.

"We view this as a viable alternative to replacing water lost through the State Water Project as a result of environmental restrictions," Rosedale General Manager Eric Averett said.

If this seems like a simple plan, it's not.

More than a few entities have floated similar ideas only to get stalled at the "what if" stage. I'll come back to why that is in a sec.

As audacious as the water deal alone is, Rosedale also has been in talks with the county to include a farmland mitigation/water sharing deal on top of the Onyx purchase.

Talk about a lot of balls in the air.

The farmland mitigation portion of the scheme actually gave me a little "aHA!" moment.

What is mitigation? It simply means the company has to try and make up for what it destroys or displaces.

***

The SunPower connection

Back in December I wrote about a curious situation where Kern County had required solar developer SunPower Corp. to buy conservation easements on prime farmland that was also habitat for Swainson's hawk. This would have allowed SunPower to make up for farmland it would have destroyed with its 4,000-acre project in the Antelope Valley.

SunPower had all but signed several easements with local farmers in late October when the county suddenly switched tacks and demanded SunPower instead pay Kern $14 million. The county would use the cash to buy easements on its own, I was told.

The farmers were very upset, having lost out on that money and rumor had it a single, large land owner was pressuring the county to buy an easement on his/her land.

I'm not sure about the "pressure" part, but the county was definitely talking to Rosedale about buying an easement on the Onyx ranch.

In early to mid-October, Rosedale approached the county offering to sell the conservation easement for $14 million and also provide the county with 30 percent of the Onyx water yield each year, up to a maximum of 1,500 acre feet at no charge for 30 years.

That water could be used in the Kern River Valley where residents now pay hefty bills to Cal Water, which has to buy supplies from elsewhere.

As I said, "aHA!"

So, that's why the county wanted that $14 million in cash from SunPower. (I like it when loose ends tie themselves up so neatly.)

Though Averett said Rosedale is still in talks with the county, I got the feeling the county's not that into Rosedale anymore.

"We danced together for a while," Director of General Services Jeff Frapwell told me. "But I suspect it isn't a good synergy for us."

He said the county is actively seeking other conservation easements.

"We're poised to go either way," Frapwell said.

***

Concerns over water rights

The county is worried there isn't as much water as Rosedale thinks, that other rights holders on the South Fork may sue, that fallowing farmland to free up water might devalue the Swainson's hawk habitat, etc.

The county hasn't even decided whether to study Onyx as possible mitigation for SunPower.

"We would only engage in the study if we felt the other parts of the partnership worked," Frapwell said.

And that's after six closed session meetings with the Board of Supervisors.

Doesn't seem like a love match to me.

Averett was undeterred, saying Rosedale would go forward with or without the county.

Which brings us to the pitfalls of just the water portion of Rosedale's plan.

As I said, many other entities have been tempted by the Onyx water only to walk away.

That includes the Los Angeles Department of Water and Power, which, according to Averett, did a feasibility study back in the 1950s or '60s that looked at getting at the Onyx water. DWP apparently decided to drop the idea.

"We think there are real water rights up there," said Richard Diamond, general manager of North Kern Water Storage District, which looked at Onyx with Rosedale several years ago.

The only problem:

"You have to move the water through Lake Isabella, and that's where you may have difficulty."

Mark Mulkay, general manager of Kern Delta Water district, agreed saying any plans to move Onyx water would run into the same wall.

"How do you prove your water is getting to the reservoir?"

***

The Isabella problem

Lake Isabella is divided up by storage rights.

Buena Vista and North Kern water storage districts hold the rights and sublease space to various other entities, including Kern Delta and the city of Bakersfield.

These are the so-called "river interests," or entities that have rights to Kern River water.

And they get along about as well as a bag of wet cats.

For Rosedale's plan to work, it would have to prove exactly how much of its Onyx water actually hits the lake.

There are rights holders between Onyx Ranch and the lake. That raises questions of whose water is running into Isabella.

If Rosedale releases say, 100 acre feet, from Onyx and a downstream user picks it up before it makes it to the lake, how would Rosedale account for that?

The fear is that 100 acre feet would come out of someone else's water already in the lake. Translation: Lawsuits.

"Clearly we need the cooperation of the river interests to move water," Averett said. "We want to work with them to put a program together that provides them value."

Such as, allowing the river interests to take some of the Onyx water in dry years and, in wet years when they need storage space, allowing them to deliver excess water to Rosedale.

"We're trying to make it mutually beneficial."

Averett said this project is no different from any other project that moves water from its place of origin to a different place of use.

Um. Yeah, that hasn't exactly been smooth sailing for moving water from the San Joaquin-Sacramento delta south. Just sayin'.

Considering all the hurdles Rosedale faces, it's a good thing they got a six-month escrow.

Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays. Comment at http://www.bakersfield.com, call her at 395-7373 or e-mail lhenry@bakersfield.com

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