Felicia Marcus: "A New Bridge With Another Expiration Date"

It was reported on July 23, that the federal government accepted a plan for California, Arizona and Nevada to cut Colorado River use through 2028, with California taking roughly a 12 percent reduction. You called it bigger than a band-aid, but smaller than the tourniquet we really need. What's the actual tourniquet?

That's the much harder question. We've been living beyond our means on the Colorado for more than 25 years, watching the largest reservoir in the country draw down year after year. We arrested it – the agreements among the seven states were pretty good and probably postponed this day by about six years. But over the last few years, as we've approached this sword of Damocles, we haven't been able to make much progress.

I don't want to simply blame the seven-state negotiators; it is a particularly thorny issue to get to. But as a civilization, it is insane that we have watched a system more than 35 million people depend on drop this low without anything significant being done. What would have been painful, but far less painful than the territory we're entering, was cutting back 10 or 15 years ago, understanding from the geophysical record that this system has produced 40-year and even 400-year droughts. Remember the Anasazi. John Wesley Powell warned in the 1800s that this was not a river on which to base massive expansion, and it's amazing we went well over a century without proving him right. He also didn't envision large-scale recycling or conservation; he was thinking about agricultural expansion – and agriculture is what gets hit hardest in a drought, at some level regardless of water rights.

So the tourniquet should have been applied a lot earlier. Now we've taken the deal the Lower Basin offered, and the Lower Basin gets a lot of points for it, particularly Arizona, which is the most junior. Urban areas in both Arizona and California will have to spend heavily taking out lawns and advancing recycling (which is close to my heart) to manage a future that won't provide what the past did. But nothing much was asked of the Upper Basin, and there are real equities between the basins. This took the path of least resistance: accept the heroic effort the Lower Basin offered, then review every two years. It's hard to plan around that little certainty. Is it bad that they're likely to accept it? No – it's something. But the federal government should be figuring out, not in two-year increments but for the long term, how this region lives within its means in an increasingly dry set of scenarios.

Why was it hard for the seven states? They're stuck between Scylla and Charybdis. We have a Law of the River that combines historic water rights – first in time, first in right, and Imperial Irrigation District is among the earliest and largest single claimants – overlaid with a compact from roughly a century ago that split the water half to the Upper Basin and half to the Lower, based on an estimate Powell never would have signed off on: 15 million acre-feet a year on average. There just hasn't been. It's more like 11. It's going to end up being eight. Sometimes it's been 12. Plenty of academics have laid that out.

On that faulty premise the Lower Basin ran with development, agricultural and otherwise, and for a while lived within its means. Then in the Clinton administration, through Bruce Babbitt's leadership and the really strong leadership of people in Arizona and Nevada who forced California to live within its means, those cutbacks got made. Metropolitan has spent millions, if not billions, correcting that exceedance of its allocation.

But the states are arguing over what the compact language means, and that overlay has never been tested in court. So you have seven state representatives – not the individual rights holders, who still hold their rights within the states – negotiating against themselves. The Upper Basin argues for the equity it never got its shot to develop. You can argue back: you had your shot, you didn't take it. But they don't have the giant reservoirs Reclamation built mid-century to enable development of the arid Southwest, which only works with storage, because some years are dry and some bring snowpack. So you have an argument about equities, which are in the eye of the beholder, and an argument about what cutting the river in half means. The Lower Basin says it means 7.5 million acre-feet delivered come rain or shine, and you short yourself to deliver it first. The Upper Basin now says maybe it doesn't – maybe we test that in court. And the Lower Basin says, we're senior, let's test that in court.

You end up with the people representing these states in a room, expected to give up water when back home they'll be accused of giving up water if they weren't forced to. And you have a federal government that should be stepping in with a backstop. I call this the 800-pound gorilla role: the federal government threatens something really tough, which gives state players cover to make a deal and say, if I hadn't, we were risking something much worse. The negotiators have been put in an almost impossible position, which is why the federal government should play a bigger role – both as the gorilla and as facilitator. Someone has to say, even at the risk of litigation: here's a worse alternative I'm going to pose, but I'd rather you made a deal, because you'll come up with something more robust – and let me help you do that, even behind the scenes. That's how we got the Bay-Delta Accord. It's how we got approvable air plans. It's the philosophy behind the Sustainable Groundwater Management Act, where nobody wants the state board setting groundwater rules, least of all the state board – but somebody has to, and it unleashed enormous local creativity, because people galvanize around making hard decisions themselves rather than having them made for them. That's been a squandered federal opportunity for a long time. In the first Trump administration, I thought Brenda Burman did a pretty good job; she got those interim deals done.

Bruce Babbitt , among others, was retained by …Metropolitan … to play that role  some years ago. Who is the Bruce Babbitt today at the federal level?

They don't have one. They have people in roles, but not a longtime water manager, governor and Interior Secretary willing to spend the time Babbitt did on the Bay-Delta Accord and the Quantification Settlement Agreement. That means rolling up your sleeves, showing up, talking to every stakeholder and helping people find the path – while also being the tough guy saying, if you don't come up with something better, I'll come up with something myself. The Secretary has said that, and what we got instead was the path of least resistance plus a promise to check in every two years, which I don't think the parties are happy about either.

I won't call it a bright spot, but real leadership has come from the Southern Nevada Water Authority. They're a very small part of this, yet they've looked at the reality around them and invested their own dollars in the region's future: 100 percent recycling, very good conservation, and they got the state to ban non-functional turf, which is a big reservoir of water everywhere else. Arizona and Nevada are making that transition ahead of Southern California – though they're a desert and we're Mediterranean, so there's a meteorological reason too.

The other thing the federal government does to make a deal happen is add money. There's a massive adaptation ahead for every urban and agricultural area that overbuilt on the bounty these reservoirs provided, and it may be too expensive to do locally. Washington could do a lot of good funding recycling, lawn rebates and agricultural transition. Buying agricultural water year to year isn't sustainable, because the future holds more frequent and drier droughts and Lake Mead probably will never fill again – but buying out water rights could help. We built a wonderful system that produced a bounty of food, fiber and economic development the world has never seen. Mother Nature isn't going to keep providing it, so we have to deal with it.

If you were offered the position of Interior Secretary, would you take it?

Right now, no. But that's for a lot of reasons.

You've flagged that this plan may not be enough to prevent Glen Canyon Dam from losing hydropower generation as Lake Powell keeps falling. What's the actual grid and infrastructure exposure if that happens, and who absorbs the cost?

First, this isn't a tourniquet yet. It's the band-aid – a big band-aid. I don't mean to belittle what the Lower Basin offered; it's still going to take a lot, and people are clear-eyed that we need to prepare quickly for worse. Urban areas will sustain it, but not without cost and pain.

On energy I don't know the exact answer, and I've asked. It depends on the area, how diversified its supply is and how its grid is built out. Hydropower gives you a clean source that's stable and can ramp, and people are working on alternatives for reasons beyond drought – wildfire and every other threat to the grid. The electricity folks are always balancing sources for amount, frequency and voltage, so I think they've thought about it, but I don't know what Plan B is in many of these places. The real exposure is smaller communities completely reliant on Glen Canyon. In the south you have big utilities that have been planning the transition for years – and even in California, Diablo Canyon has been allowed to run past its planned retirement to keep the lights on while we work through that transition.

Back in 2019, Metropolitan's board chair told TPR that the original Drought Contingency Plan was a bridge solution with an expiration date of 2026. That date is now here. Is this new deal a real deal, or another bridge with a new expiration date?

Exactly – a new bridge with another expiration date, and it may not be enough, in which case the federal government reserves the right to do more. Nobody ever got rich betting on the weather, although with the growth of Kalshi and Polymarket, where you can bet on anything, that may not be true anymore. You also don't want to crush everyone, which is why I say we should have taken a more gradual, more cautious approach to cutbacks years ago. The DCP was something the people at Metropolitan and elsewhere should be proud of. It's that we haven't made progress since then that's the problem.

In our VX News 2018 interview you credited Governor Brown's Water Action Plan with building resilience through diversified local supply. With Metropolitan's Pure Water Southern California and LA's Operation NEXT scaling up, how much of this 12 percent cut can the region absorb through local supply rather than drawing down its credits in Lake Mead?

Those two projects will take 15 to 20 years to bear enough fruit to take a real bite – but you have to start now. They'll be a tremendous boost to sustainability, and they have to be coupled with conservation, stormwater capture and groundwater cleanup. LA has plenty of polluted water in its basin, and the San Gabriel Valley has been cleaning up for decades.

Conservation and efficiency plus stormwater capture into our basins can get us a long way; the county has run large-scale capture in the spreading grounds for years, so we have a history to look at. The Tillman project in the Valley, under construction now, will put 25 to 40 million gallons a day into the ground – probably the biggest single chunk. We'll also have to transition out of green summer lawns into drought-tolerant plants and more trees. That costs money, because helping people do it is expensive. But we've shown in the 1970s, the 1990s and during the drought of the teens, when I was at the water board, that the public will step up given the right information and a few incentives. Urban California saved 24 percent in short order when we gave people a reason, constant information, and the ability to compare their community to others. People are fairly altruistic, but sometimes it takes regulation so they know everyone else is doing it too.

In a VX News 2022 conversation you argued that Inflation Reduction Act drought funding needed to go toward structural fixes – Salton Sea restoration, water rights buyouts – not short-term water purchases. Given this administration's posture toward IRA climate funding, is that structural investment still realistically on the table?

In this proposal – and we won't know until we see it – there's $100 million for conservation in the Upper Basin and $350 million toward some of those things in the Lower Basin, out of Inflation Reduction Act dollars. They could put in more later. That's what we have a federal government for – insuring ourselves. Some of it goes to disasters; we should spend on disaster prevention the same way.

We can get rid of our lawns, and we don't have to go to rock and gravel, because we're not a desert — we can plant natives that are good for pollinators and do stormwater capture through multi-benefit projects. San Diego has done a pretty good job and is one of the conservation leaders among California cities, along with San Francisco and Santa Cruz.

The question is how you pay for it, and the federal government can help through grants and, more importantly, low-cost loans. During the drought of the teens we streamlined the recycling rules and put out a billion and a half dollars in grants and low-cost loans. Those loans, through the State Revolving Fund, are the most helpful thing the federal government does. California has a really good bond rating, so we raised another $500 million issuing bonds on behalf of the state. You don't want to issue bonds all the time, but if you're financing infrastructure that lasts 30 or 40 years, you can finance it over 30 or 40 years, the same as your house. Southern Nevada may have pioneered century bonds for assets like pipelines that last 100 years. And there are private-sector investors we need to figure out how to engage – at a lower return than other private investments, but more secure, because people are always going to buy water and flush their toilets. It's a pretty sure repayment scheme.

What should California water agencies and infrastructure investors be doing right now to prepare for the real possibility of more dramatic cuts before 2028?

We need a Manhattan Project of putting money into lawn rebates. During the drought of the teens, Metropolitan put out almost $400 million, matched by over $100 million from the other retailers – more than half a billion in rebates, and people snapped them up within weeks. Folks know they don't need a bright green lawn; it's a vestige of people who moved here from a different climate. Some love them, and I like them too – I love the smell of cut grass, and you want a little lawn so your kid can play catch and fall down without getting hurt. That's fine within reason. It just doesn't have to be the bright green of a Scottish golf links in the middle of a summer drought. If enough people take theirs out, or you ban ornamental turf as Southern Nevada did, that's a real down payment.

Then you do fixture, toilet and appliance retrofits; new homes are far more efficient than old ones on their own. And leaks can be 20, 30, 40 percent, so let's run a blitz to help people change out leaky pipes. LA has a massive effort underway on its capital backlog – a high priority for DWP and for this mayor, who has pushed for a far more professionalized capital improvement program citywide, the way New York has.

All of that is great, but you need financing. State and federal money now saves enormous pain and expense later, because when a drought hits and you start hitting industry and the economics of the city, people begin to think maybe I shouldn't move here, maybe I should leave. The economic cost to the community is far higher than the cost of the investment – and that is not how we've measured these things. UCLA did a really good study on this for LADWP some years ago: we have to make adaptation decisions by comparing the cost of the investment against the cost of not making it and having imported supplies disrupted. And they will be disrupted – if not by an earthquake, which is unlikely to hit all three aqueducts, then by climate change for certain. So we have to think differently, and we have to think about financing. That's exactly where the state and federal governments can help and get paid back over time.

As we do this interview we're less than a hundred days from the election of California's next governor – and as you well know, there's no conversation from those candidates about water, or about any of the issues you've just raised. What's keeping them from focusing on something you believe is an existential challenge?

They do care. But I don't think it should be part of the campaign. It always goes wrong. They have a lot going on, and water issues tend to be intensely local – the state can help with money and sometimes regulation, but it's very different from energy or climate. So it's better left for governing than for campaigning.

Last question. If you were advising Interior Secretary Burgum on the actual long-term post-2026 operating guidelines, not just this interim patch, what's the one structural fix nobody is seriously discussing yet?

Other than massive investment in conservation and retrofit – which I do think is the big thing – he should pull together panels of experts to work through the options, and find a way to be the convener of more than just the state players. That means talking to the local water agencies, to the tribes, to academics who spend their time thinking about this and aren't personally self-interested. You need a team of people invested in actually talking to everybody to help come up with possibilities.

The tribes absolutely need to be included in this. A lot of players, including the states, have made great strides in their relationships with tribes, and this is a particular responsibility – a trust responsibility of the federal government, and of the Interior Department in particular. Some great ideas and great solutions are there in working with the tribes. So: more players, and being up to your armpits in the actual conversations rather than one step removed through the state players.