Article 3. Conservation In The State Water Resources Development System of California Water Code >> Division 6. >> Part 3. >> Chapter 11. >> Article 3.

The department may use Central Valley Project revenue bonds or other funds available for the purposes of the State Water Resources Development System to finance, in whole or in part, water conservation programs and facilities that reduce demands by the sponsoring contractor for project water from the system for a period of time agreed to by the sponsoring contractor, and thereby increase the supply of project water available in the Sacramento-San Joaquin Delta for distribution to other contractors.

As used in this article, "sponsoring contractor" means a contractor or contractors, who have a long-term water supply contract with the department and who agree to reduce demands for project water from the State Water Resources Development System in accordance with Section 11970.

A local water conservation project described in Section 11970 is eligible for funding pursuant to this article if, in the determination of the department, the project meets all of the following criteria:
  (a) The project is engineeringly feasible and is capable of producing project water which is economically competitive with alternative new water supply sources.
  (b) The construction and operation of the facilities and programs will not interfere with the requested deliveries of annual entitlement water to any contractor other than the sponsoring contractor.
  (c) The project will not result in any greater annual charges to any contractor, other than the sponsoring contractor, than would have occurred with the construction at the same time of alternative new water supply sources constituting either reservoirs located north of the delta or off-aqueduct storage reservoirs located south or west of the delta designed to deliver water to the California Aqueduct.

The department shall determine whether a local water conservation project described in Section 11970 is economically competitive by comparing, in an engineering and economic analysis, the local conservation project with alternative new water supply sources constituting either reservoirs located north of the delta or off-aqueduct storage reservoirs located south or west of the delta designed to supply water to the California Aqueduct. The analysis for the alternative new water supply sources shall use the average cost per acre-foot of yield in the latest studies made for those sources by the department and shall compare those facilties with the proposed local conservation project using commonly accepted engineering economics. In the case of a local conservation project to be funded in part by the department as part of the system and in part from other sources, the economic analysis shall be applied only to the portion to be funded by the department as a part of the system.

A local water conservation project described in Section 11970 shall not be constructed or implemented pursuant to this article until both of the following occurs:
  (a) The sponsoring contractor signs a written agreement with the department which indicates all of the following:
  (1) The approval of the facility or program by the sponsoring contractor.
  (2) The yield and the period of time during which the water from the local conservation project constitutes project water.
  (3) The disposition of the local conservation project or of the yield from the local conservation project upon the expiration of that period of time.
  (b) All contractors within whose boundaries any portion of the local water conservation project is located, and who are not sponsoring contractors for the local conservation project, approve the local water conservation project in writing.

In the event of a shortage in water supply, within the meaning of Article 18(a) of the standard water supply contract between the department and the state water supply contractors, the determination of whether to count, in whole or in part, the reduced demand from future conservation programs described in Section 11970 in the allocation of deficiencies among contractors shall be based on a project-by-project evaluation taking into consideration such factors as any limitation on the use of the water from the facilities and whether the sponsoring contractor has access to project water from the delta as an alternate to those facilities.

This article is the only portion of this chapter applicable to the State Water Resources Development System.