Building Drought Resiliency for California’s Water Supply Systems—The Role of Permitting Reform

PPIC Water Policy Center senior fellow Ellen Hanak testified at the Assembly Select Committee on Permitting Reform on October 16, 2024. Here are her prepared remarks:

Climate pressures are compounding current water supply challenges

California’s water supply system is tasked with delivering safe drinking water to residents across the state and supporting a dynamic and diverse economy, including the nation’s largest agricultural sector. The system provides these services using a mix of local, state, and federal infrastructure—including above- and below-ground storage, conveyance, treatment facilities, and vast underground networks of pipes for local water delivery. Some of this infrastructure is also key for supporting fish and wildlife.

The water system was designed to cope with two longstanding features of precipitation in California: (1) long dry summers, which coincide with peak irrigation water demands; and (2) high volatility between wet and dry years. The long dry season requires seasonal water storage—in surface reservoirs, groundwater basins, and Sierra snowpack. And year-over-year storage in surface reservoirs and especially groundwater basins helps California weather droughts. California’s many reservoirs also help reduce flood risk.

Climate change is stressing this system, bringing higher temperatures, reduced snowpack, and more volatility, with bigger storms and more intense droughts. Sea level rise is also threatening water quality in the Delta—a major conveyance hub—and in coastal aquifers. These changes will simultaneously reduce usable water supplies and increase flood risk. Addressing these threats will require adapting how we manage water, including major improvements in both built and natural storage and conveyance infrastructure to cope with worsening droughts and floods.

Climate pressures are compounding a number of current challenges that will also require considerable investment: upgrading aging infrastructure (e.g., dam safety, water distribution systems), meeting water quality standards for new contaminants (e.g., PFAS), and ending long-term overdraft of groundwater basins under the 2014 Sustainable Groundwater Management Act (SGMA). While implementation of SGMA is key to long-term resilience of many regions, it is a heavy lift. In the San Joaquin Valley, it will likely require 500,000 to 900,000 acres of farmland to be taken out of intensive irrigation, impacting regional jobs, GDP, and public health.

Permitting poses challenges for building water system resiliency

During our many discussions with stakeholders over the years, one consistent theme has emerged: the time and cost of permitting to undertake water projects both large and small. A complex suite of federal, state, and local approvals is typically needed, under numerous statutes and regulations. While each individual permitting requirement was introduced to meet a well-intended policy goal, the cumulative effect can be daunting, causing years of delay and escalating costs, and even outright preventing actions that would serve the greater good. In short, permitting challenges are keeping us from taking timely action to build water system resiliency, while increasing affordability challenges.

A few recent examples illustrate the challenge:

• Groundwater recharge. Recharging groundwater basins during wet years is one of the most cost-effective approaches to expanding water storage and bringing groundwater basins into balance under SGMA, and it is a state and local priority. Yet our recent survey of San Joaquin Valley water managers found that, despite some improvements in getting access to high flow water for recharge, securing permits to build and operate these projects remains a major obstacle.
• Repurposing farmland. Even with best efforts to recharge more water, some currently irrigated land will need to transition to other uses to build resiliency. But we found that a number of current state and local policies—such as CEQA mitigation requirements and Williamson Act rules—disincentivize beneficial land repurposing.
• Delivering safe drinking water. As water utilities work to update their local infrastructure and meet new safety standards for contaminants such as hexavalent chromium and PFAS, some report substantial delays from state and local permitting authorities.

Insights from PPIC’s Advancing Restoration through Smarter Permitting study

As a recent PPIC study led by Dr. Letitia Grenier highlighted, environmental permitting requirements are even a roadblock to projects to restore California’s declining ecosystems. Drawing on case studies from across the state, the team noted several promising approaches to speed up the process, reduce costs, and get better overall outcomes. Although the study focused on advancing restoration, these findings apply more broadly to advancing water projects in environmentally protective ways:

• Using a coordinated, programmatic approach for similar projects (for examples see Sustainable Conservation’s simplified permitting resources);
• Coordinating within and among agencies undertaking different permitting actions for the same project (e.g., the Bay Restoration Regulatory Integration Team (BRRIT), which brings together staff from multiple agencies to review flood protection and habitat investments in the San Francisco Bay); and
• Permitting at scale to achieve broad functional goals (e.g., the Upper Santa Ana River Habitat Conservation Plan, designed to undertake broad ecosystem investments in tandem with the development of numerous water supply projects.)

The study also found that investing in an inclusive approach, so that parties can jointly understand and address the complicated regulatory requirements, paid dividends. When project proponents covered the cost of additional permitting staff within regulatory agencies, this also helped to relieve bottlenecks.

Potential roles for the legislature

In the case studies examined by Dr. Grenier, project proponents often took the lead in initiating smarter permitting efforts. And the Newsom administration has led many of California’s recent permitting reform efforts, in some cases accomplishing that through executive orders. Since solutions undoubtedly lie in improving how agencies work to tackle problems, there is no substitute for strong executive leadership.

The legislature can also play a critical role in ensuring that permitting processes are transparent, timely, and serving the public good. One recent example is SB 149, enacted in 2023, which streamlines the CEQA judicial review process for some types of infrastructure projects. This law has already been used to substantially speed up judicial review of challenges to the environmental impact report for the proposed Sites Reservoir project. In our work on the San Joaquin Valley, we identify a number of places where legislative action to simplify and rationalize permitting could help build climate resiliency. Your conversations with stakeholders from across California can help identify other areas for improvement, allowing the state meet current challenges and build resiliency for its people, economy, and environment.