The Race for $2.7 billion: Setting the Competition Guidelines for Water Storage

December 09, 2015 | Water in the West | Insights

Melissa Rohde and Debra Perrone


Photo Credit: Chris Austin

Next week the California Water Commission will begin the formal rulemaking process on how funds from Proposition 1 (the $7.5 billion water bond approved by voters last fall) will be allocated for water storage projects in California. Proposition 1 provides $2.7 billion for infrastructure projects with water storage components through the Water Storage Investment Program (WSIP). Although there are specific eligibility requirements for water storage projects written into Proposition 1 (50% matching costs, measurable benefits to the Delta, cost-effectiveness, and maximized public benefits), eligible project types include surface water storage, conjunctive management, and groundwater storage. 

The California Water Commission’s role in drafting regulations for the WSIP will inform how water storage funding will be prioritized and how the grant application process will work.  These decisions will affect all Californians moving forward -- water storage projects play an important role in ensuring long-term water reliability in the face of varying hydrologic conditions, a changing climate, a growing population, and California’s new groundwater law. The Sustainable Groundwater Management Act of 2014 (SGMA) requires sustainable groundwater management across the state and will increase the need for local agencies to recharge aquifers and to store water. Groundwater recharge and storage projects will play an important role in helping the newly formed Groundwater Sustainability Agencies (GSAs) under SGMA to achieve their sustainability goals, and Proposition 1 funding is one opportunity for GSAs looking to fund these projects.

The case for multiple solicitation deadlines

The California Water Commission’s current draft regulations offer only one solicitation to distribute all WSIP funds most likely in 2017 using a two-step application process. This is likely to preclude many GSAs from the opportunity of applying for WSIP funding, because the deadline for GSA formation is also in 2017, and GSAs are not required to adopt a sustainability plan until 2020. Many GSAs will be brand new by the contemplated 2017 WSIP solicitation date, and many will still be working out coordination with neighboring GSAs.  While GSAs have the authority to levy taxes or fees for groundwater management, raising substantive funds in advance of plan development (three to five years later) may be challenging and could delay their ability to raise matched funds.  Creating multiple deadlines beginning in 2017, rather than a single deadline, will give more GSAs the opportunity to compete for this important funding.  The single deadline also has the potential to create an unfair advantage for larger surface water projects that have already undertaken some form of feasibility analysis and secured matched funds.  Research by Water in the West indicates that groundwater storage is one of the more cost-effective ways to deliver public benefits and provide long-term reliability to California’s water infrastructure. Although surface water storage still has an important role in California, the California Water Commission should not set up an application process that does not take full advantage of the public and economic benefits of groundwater storage.

Groundwater storage is more cost-effective than surface water storage.

Surface water storage projects can be six times more expensive than groundwater storage.  Groundwater storage projects funded under past water infrastructure bond issues have a median cost of $320 per acre-foot.  This is significantly cheaper than the cost to build surface water storage infrastructure, which have a median cost of $1900 per acre-foot.

Groundwater storage can achieve a wide range of public benefits.

Groundwater recharge and storage projects funded by past water bonds identified a wide range of public benefits in addition to aquifer recharge. These include: increasing water supply, improving water quality, flood control, protecting wetland habitat, mitigating land subsidence, reducing greenhouse gas emissions, preventing seawater intrusion, providing recreational use, and increasing regional self-reliance.

The demand for groundwater recharge funding is high.

More than half of the funding awarded from past water bonds (2000-2006) has gone towards groundwater recharge and storage projects, demonstrating the demand for groundwater projects. However, less than half of the applications submitted under past water bonds received funding, indicating that there is additional demand for financial assistance for local groundwater storage projects. This demand is likely to increase as GSAs begin to implement the management criteria under SGMA.

Groundwater storage provides long-term reliability for California’s water.

Surface water and groundwater storage sites are highly dependent on surface water inputs, and vulnerable to changes in future water availability due to climate change.  California’s future will depend on incorporating stormwater and treated wastewater into its water supply so that the system is resilient under drought conditions.  In most cases, the most accessible and inexpensive place to store stormwater and treated wastewater is in local groundwater basins.  Taking a longer-term approach to water storage and developing facilities that use treated wastewater and stormwater will provide agencies with more flexibility and reliability when managing this critical resource.


Devoting resources to groundwater recharge and storage projects will help communities throughout the state to bring their groundwater basins into balance and ensure the overall success of SGMA. Funding is critical to the success of groundwater projects, and there is a need from many communities for state funding. Ensuring that Proposition 1 funding is accessible to local agencies managing at the basin to sub-basin scale in a manner that is consistent with the timeframe of SGMA legislation will offer a strategic approach for jump-starting the sustainable management of California’s groundwater basins while building long-term reliability into California’s statewide water storage system.

For more details on our groundwater recharge and storage research, visit: