April 18, 2006 > Hetch Hetchy
This is the second part of a continuing a series of articles exploring the origin and present state of the Hetch Hetchy water and power system that runs through the Tri-City area. San Francisco Public Utilities has begun a $3.6 billion capital improvement program to repair and modernize its water supply system. A debate has surfaced over the need for continued use of the O'Shaughnessy Dam that resulted in the flooding of the Hetch Hetchy Valley in Yosemite National Park.
The Raker Act passed Congress in 1913 allowing the flooding of the Hetch Hetchy Valley and was signed into law by President Woodrow Wilson. Twenty years later, in 1934, water began flowing from the Tuolumne River to San Francisco. While San Francisco was a major beneficiary of the power and water from the O'Shaughnessy Dam, other local jurisdictions tapped into the flow. Passage of the Raker Act was, in large part, due to the lobbying efforts of communities surrounding San Francisco who also saw the need for an increased water supply.
After the Loma Prieta Earthquake of 1989 and subsequent droughts in the 1990s, a critical look at the aging system revealed the need for a complete overhaul of the system including significant capital improvements. To represent and protect the interests of 26 cities and water districts (including Alameda County Water District) and two private utilities that purchase water on a wholesale basis from the San Francisco regional water system, the Bay Area Water Supply and Conservation Agency (BAWSCA) was created on May 27, 2003. This customer group consumes approximately two-thirds of the water that flows through the system.
The formation of BAWSCA was the result of AB 2058 (Authors: Assembly members Louis Papan, John Dutra and Joe Simitian). Prior to this, San Francisco, in effect, operated an unregulated monopoly over water and power in the area and questions of rate structures and use of power and its effect on water conservation were left to a handful of officials and voters who did not represent the will of the majority of users. In 1998, San Francisco voters passed an initiative imposing an 8 year freeze on their own rates, leaving any increased costs to outside sources. Since the water system is not an investor-owned utility, it is not subject to PUC (Public Utilities Commission) regulation.
Additional laws to address this critical water system included AB 1823 (Authors: Assembly members Louis Papan and Joe Simitian) that targets the state of physical facilities. It requires the City and County of San Francisco to fix the system through a Capital Improvement Program (CIP), prepare an emergency response plan and report annually to the California Department of Health Services. It also restrains power production at the expense of water customers. This law "sunsets" on December 31, 2010 or when construction contracts are awarded, whichever comes first.
SB 1870 (Author: Senator Jackie Speier) outlines financing $2.9 billion of improvement projects needed on the regional water system. San Francisco's city charter required voter approval even for water revenue bonds until it was amended in November 2002. A Regional Financing Authority (RFA) was created to provide an alternate way to raise capital for the wholesale customers' share of the regional CIP. The RFA's authority to issue bonds under SB 1870 "sunsets" in December 2020.
Noted in the California Water Code:
"Many separate cities, districts, and public utilities are responsible for distribution of water in portions of the Bay Area served by the regional system operated by the City and County of San Francisco. Residents in the counties of Alameda, San Mateo, and Santa Clara who depend on the water made available on a wholesale basis by the regional system have no right to vote in elections in the City and County of San Francisco and are not represented on the San Francisco commission that oversees operation of the regional system.
The San Francisco regional system is vulnerable to catastrophic damage in a severe earthquake, which could result in San Francisco and neighboring communities being without potable water for up to 60 days. The San Francisco regional system is also susceptible to severe water shortages during periods of below average precipitation because of insufficient storage and the absence of contractual arrangements for alternative dry year supplies.
The lack of a local, intergovernmental, cooperative governance structure for the San Francisco regional system prevents a systematic, rational, cost-effective program of water supply, water conservation, and recycling from being developed, funded and implemented."
California Water Code Section 81301(a), (b), (c).
Nothing in these Acts changes the governance, control or ownership of the regional water system.