Diverse interests will again face off in coming months.

Los Angeles prides itself on having defied its geography and transformed a scattered collection of small towns into the nation's second-largest metropolis.

That's because over the last century, the world's greatest water transmission system was built, carrying billions of gallons of water from remote corners of the state to the millions of Angelenos who use it to water their lawns, fill their glasses and run their businesses.

But events are converging over the next six months that could cut back supplies in the months and years to come, driving up water prices for consumers and businesses alike and perhaps leading to stringent conservation measures.

Consequently water--hardly a topic that used to arouse much interest beyond the most avid policy wonks--has become a hotly debated issue getting the attention of local, state and federal officials.

In Sacramento, a $3.4 billion water bond has been put on the Nov. 5 state ballot to help fund a multibillion dollar fix of the main component of the state's water transmission system. In Washington, California's two senators are pushing for the federal share of that fix. And, in the Imperial Valley, a battle is being waged over how to transfer surplus water to urban water users along the coast and lessen the region's dependence on the Colorado River.

In the complex world of water politics, each of these decisions is connected to L.A.'s water supply. If the funding measures come through and the right agreements are reached, L.A. water supplies will be more assured in the years to come. But if any one of these links fails, area water agencies will be forced to scour for new sources, at a significantly higher cost. And the state as a whole. could face a major crisis.

"We could see a problem ten times worse that what you saw in last year's electricity crisis," said state Assemblyman and former Assembly Speaker Robert Hertzberg, D-Van Nuys.

Southern California companies and residents could see up to a 10 percent jump in water rates next year if Colorado River supplies are cut back. But the real crunch could come from a "perfect storm" combination of cutbacks from the Colorado River and Northern California supplies, coupled with a region-wide drought. Under such a scenario, water rates could easily jump 30 percent or 40 percent; local agencies could even be forced to ration water, first for major users and then for everyone else.

"If these persistent problems along the Colorado River and the Bay-Delta area are not resolved, when the next drought hits, we could be in for a really severe water rationing situation," said Rusty Hammer, president and chief executive of the L.A. Area Chamber of Commerce, which is actively campaigning for the bond measure.

Hertzberg is focusing his efforts on what long has been the most nettlesome problem plaguing the state's water delivery system: the San Francisco Bay-Sacramento River Delta region. This 700-square mile estuary northeast of Oakland is where the state's two largest rivers - the Sacramento and San Joaquin - meet as they empty into San Francisco Bay.

Crucial fur state

This area is crucial to the water transmission system because two-thirds of the state's precipitation falls in the northern half of California, while two-thirds of the people live in the southern half.

To get some of that water from the north to the south--as well as to the burgeoning area that would become Silicon Valley--planners and engineers 40 years ago built a system of huge pumping stations and aqueducts through the Bay-Delta area. This formed the backbone of the State Water Project that now supplies roughly one-third of the water consumed by Angelenos.

Almost from the start, problems emerged in the Bay-Delta area. Seawater intrusion threatened the quality of the water being transported through the region and the man-made levees began to deteriorate.

Then, in the 1980s, increasingly powerful enviromnental interests raised concerns over the impact of the pumping stations and the aqueducts on the Delta smelt and numerous other species inhabiting the area. In 1993, the smelt was listed as a threatened species, resulting in strict limits on how much water could be taken out of the Bay-Delta area.

By this time, environmentalists, Central Valley farmers and urban water users had become locked in a long-running battle over the BayDelta.

The stalemate was broken in late 1994 when then-Gov. Pete Wilson and then-U.S. Interior Secretary Bruce Babbitt reached an agreement to restore the Bay-Delta while still protecting the fragile ecosystem.

The agreement called for the creation of a consortium of federal and state agencies--known as Calfed--to develop a plan to fix the Bay-Delta. In 2000, the final plan was issued, calling for a 30-year program costing around $10 billion. The first seven-year stage alone is to cost $3.2 billion.

California voters approved an initial $1.5 billion in funding for the fix by passing a $1 billion bond measure in 1996 and a $2 billion water restoration measure in 2000.

But now, the Bay-Delta fix threatens to stall unless an additional $2.4 billion comes in over the next three years. About $825 million of that would come from the $3 billion water bond on the November ballot. And U.S. Seas. Dianne Feinstein and Barbara Boxer are pushing legislation that would earmark $1.6 billion over three years for the federal share of the Bay-Delta fix. That bill passed the Senate Energy and Natural Resources Committee on June 5; a companion bill by U.S. Rep. Ken Calvert, R-Riverside, is working its way through the House.

Competition for money

But passage of these funding measures is by no means assured. The bond measure will be competing with more than $17 billion in other bond measures on the Nov. 5 ballot, while a budget deficit in Washington makes the prospects of federal funding more uncertain.

"If the funding falls through, it delays and maybe even derails the whole Calfed process," said Adan Ortega, vice president of external affairs for the Metropolitan Water District, the wholesale water agency serving Southern California.

By itself, a year or two delay is not necessarily dire. But Ortega and others say the Calfed agreement is tenuous and could dissolve entirely if the rest of the funding doesn't materialize. if that happens, one-third of the MWD's water supply is threatened, at the least.

"You could easily have what we refer to as lawsuit creep," Ortega said. "One interest, upset at not getting the water they feel they are entitled to, decides to sue to force the delivery of water, which in turn prompts countersuits and pretty soon, the whole process goes south."

Of more immediate concern to the MWD is an impending deadline for its Colorado River supplies, the cheapest water source in the MWD mix, if a complex series of agreements are not completed by year's end, the MWD could lose 15 percent of its overall water supply starting next Jan. 1. Unless the heavens open up and deliver lots of rain to Southern California next winter, such a cutback could force the MWD to buy more water from the State Water Project's sources in Northern California, which are more expensive.

The result: higher rates and tougher conservation measures.

The root of this potential crisis goes back to a key 1963 U.S. Supreme Court decision. At that time, rapidly growing California was going after new water supplies at a rate alarming to its neighbors, particularly along the Colorado River. The other states, led by Arizona, filed suit in an attempt to cap California's draw from the river. The Supreme Court ruled that California would have to limit its total take to 4.4 million acre-feet a year. (An acre-foot is 326,000 gallons, a year's supply for two typical single-family households.)

But over the last 30 years, California has been drawing more than 4.4 million acre-feet - in some years up to 5.4 million acre-feet. At first, the other Western states did not object, since they weren't using all their shares from the river. But after explosive growth through the 1980s, the other states found that they would need to use all their shares and they pressured the federal government to enforce the 1963 court decision.

In 1996, then U.S. Interior Secretary Babbitt told California to come up with a plan to bring its Colorado River draw back down to the legal limit of 4.4 million acre-feet in 20 years. The MWD and other water agencies came up with the so-called 4.4 Plan to reduce their reliance on the Colorado River. It relied on a series of complex water transfers and water storage plans to make better use of the water already being taken from the river.

Just before he left office, Babbitt issued an order requiring all parties to agree to the 4.4-Plan by Dec. 31, 2002. if this so-called Quantifled Settlement Agreement (QSA) is not agreed to by that date, the order calls for the temporary permission to exceed the 4.4 million-acre-foot threshold to be withdrawn.

But the measures in the 4.4-Plan have run into several stumbling blocks. The MWD's plan to store 2 million acre-feet of water in the Mojave Desert, primarily under contract with a private company known as Cadiz Inc., has come under fire from environmentalists. They are concerned about another part of the Cadiz plan that allows the company to draw down the already existing aquifer underneath the Mojave Desert.

Complex negotiations

The water transfers have been even more complex to negotiate. At the crux is a transfer of up to 200,000 acre-feet of surplus water a year from the Imperial Irrigation District in the Imperial Valley to the San Diego County Water Authority through pipes owned by the MWD. When this deal was first proposed, San Diegans objected to the price that the MWD said it would charge to transport the water through its pipes. That issue was resolved four years ago when the state agreed to pony up $200 million to make up the difference.

But last year, environmentalists raised concerns about what the diversion of this water would do to the shrinking Salton Sea and the species of fish and birds that rely on that sea. (Much of the excess water in the Imperial Valley drains into the Salton Sea.) They pressured the federal government, which in turn told the Imperial Irrigation District that before it could sell the water to San Diego it must somehow mitigate the impact of the loss of drainage water into the Salton Sea.

The solution now on the table--and backed by Feinstein--is to let some of the farmland in the Imperial Valley lay idle, or fallow. But when Feinstein tried to sell this plan to people in the Imperial Valley, she was met with howls of protest from farm workers and other officials who feared a massive impact on the local economy.

"I call this whole water transfer deal San Diego's 'Chinatown,' where a big and growing urban area comes in and arranges a deal to take water from a poor, rural farming community' said Stephen Erie, professor of political science at the University of California San Diego.

"This fallowing proposal, which I believe is inevitable because the big boys aren't going to allow the transfer to fall through, will have considerable impact on the Imperial Valley economy' he said.

Fallowing, said Imperial Irrigation District Director Andy Home, would eliminate almost 300 Imperial Valley jobs in the short term and 1,400 jobs in the long term. Direct economic losses to the farm sector alone "would amount to hundreds of millions of dollars' said Home in written testimony to a House of Representatives resources subcommittee.

Imperial Valley's economy is almost entirely based on farming; when crops are not being harvested, unemployment levels typically exceed 30 percent.

The Interior Department's assistant secretary for water and science, Bennett Raley, warned in a May 31 letter to the Imperial Irrigation District that if an agreement is not reached by Dec. 31, the federal government will cut back California's water draw from the Colorado River to 4.4 million acre-feet.

"That would knock out 15 percent of our water supply in one fell swoop' the MWD's Ortega said. "We are working on other measures to reduce our reliance on the Colorado River, like desalination and water recycling, but no way will those be ready in six months. We would have to step up our purchases from the State Water Project and encourage all of our customers to conserve."

This might only prove a mild inconvenience in a wet year, but the current dry spell can only exacerbate any supply cutoff.

In a typical year, one-third of the MWD's supplies come from groundwater; in a dry year, that portion declines dramatically, forcing the agency to import more water. If the local drought continues and the MWD's Colorado River supply is cut back, the agency would be forced to rely on the State Water Project--among its most expensive water sources - for nearly two-thirds of its water supplies.

"The impact of this would not be limited to major water users," said Hammer. "Consumers of the products and services provided by the major water users would see higher prices and the entire economy would receive a jolt."

But Hammer said this would only be a harbinger of crises to come unless the Bay-Delta problem is resolved. "We know that ultimately we have to reduce our reliance on the Colorado River," he said. "But if we also have to reduce our reliance on water from northern California, that's where the real crunch will set in."

[GRAPH OMITTED]

Journey of L.A. Water

Annual Rainfall in Inches, L.A. Civic Center


'70/71  18.82
         7.17
        21.26
        14.92
        14.35

'75/76   7.21
         12.3
        33.44
        26.98

'80/81   8.96
        10.71
        31.28
        10.43
        12.82

'85/86  17.86
         7.66
        12.48
         8.08
         7.35

'90/91  11.99
         21.0
        27.36
         8.14
        24.35

'95/96  12.46
         12.4
        31.01
         9.09
        17.94

'01/02   4.42

L.A. gets its water from sources hundreds of miles from the city and
from local supplies. The system is supported by several reservoirs which
vary greatly in size throughout the state. The four main sources of
water and their transmission lines are highlighted on the map.

* California Aqueduct, which carries water from the Bay-Delta region in
Northern California.

* L.A. Aqueducts, which carry water from the Sierra Nevada

* Colorado River Aqueduct

* Local groundwater supplies

Source: National Weather Service

Note: Table made from bar graph

RELATED ARTICLE: L.A.'S SEARCH FOR WATER--A SPECIAL REPORT

Water Lingo

Terms used in the Los Angeles water debate.

* Acre-toot: The amount of water required to cover one acre to a depth of one foot It is equivalent to 326,000 gallons, or the amount of water used by two typical Southern California families in and around their home in a year

* Bay-Delta: The San Francisco Bay-Sacramento River Delta region, which is the natural drainage mouth for much of California's watershed. Virtually all of the water that Southern California receives from the State Water Project passes through this region with the aid of several major pumping stations.

* Calfed: The consortium of federal and state agencies set up in 1995 to develop a plan to restore the Bay-Delta region. Formed after a 1994 agreement was reached between then-Gov. Pete Wilson and then-U.S. Secretary of the Interior Bruce Babbitt, the consortium has 15 member entities, including five state agencies, five federal agencies and five other stakeholders.

* Department of Water and Power (DWP): The Los Angeles Department of Water and Power, formed in 1902 and charged with supplying the growing City of Los Angeles with adequate water and power. The DWP is a semi-autonomous agency, with some latitude to set its own rates and policies. Ultimate oversight is still exercised by the L.A. City Council and the LA. Mayor

* Metropolitan Water District (MWD): The water wholesaling agency created in 1926 by 13 water agencies throughout the Southern California region. The MWD, which now has 27 member agencies, is charged with finding and conveying adequate water supplies to the Southern California region.

* 4.4 Plan: The plan now in final development stages to allow California to stay within its annual allotment of 4.4 million acre-feet of water from the Colorado River. For years, California has exceeded that allotment, which was set out in the 1963 U.S. Supreme Court decision, Arizona v. California. In the 1990s, other states along the river pressured then U.S. Interior Secretary Bruce Babbitt to force California to live within its 4.4 MAF allocation.

* Interim Surplus Guidelines: The allowance granted last year by the U.S. Department of the Interior for California to exceed its 4.4 MAF allocation from the Colorado River through the year 2016 while it implements the 4.4 Plan.

* Qualified Settlement Agreement (QSA): In order to meet the 4.4 Plan, Babbitt required that all California entities drawing water from the Colorado River reach an agreement on how to reduce their dependence on Colorado River water by Dec. 31, 2002. If an agreement is not reached by that date, the Department of the Interior has indicated it will cut California's Colorado River allocation from the current 5.3 MAF to 4.4 MAF, effective Jan. 1, 2003.

* IID-SD Memorandum of Understanding: The water transfer agreement between the Imperial (Valley) Irrigation District and the San Diego County Water Authority under which the IID is to transfer 200,000 acre feet of water each year for the next 30 years through MWD pipelines to the San Diego area.

* Los Angeles--Owens Valley MOA: The 1998 agreement reached between the City of Los Angeles and the Great Basin Unified Air Pollution Control District (representing the Owens Valley) that requires the L.A. DWP to divert some water from its aqueducts traversing the Owens Valley to the dry lake bed to reduce the occurrence and severity of dust storms.

* Kuehl Bill (SB 221): Legislation by state Sen. Sheila Kuehl, D-West Los Angeles, passed last year, that requires local water agencies to certify that adequate water supplies can be obtained for all new major development projects.