California Warns Water Deliveries Will Be Cut to Zero

California officials said the state’s deepening drought means they won’t be able to deliver any of the water sought by contractors that supply two-thirds of the population and a million acres of farmland.

The California Department of Water Resources, which earlier predicted it would meet about 5 percent of requests, projected yesterday that it won’t be able to deliver any of the 4 million acre-feet of water sought by local agencies. An acre-foot is the volume needed to cover an acre of land one foot deep with water.

The reduction means that local agencies will have to rely on existing supplies such as ground water or what is in storage behind dams. The Los Angeles-based Metropolitan Water District, serving 19 million people in Southern California, and the San Francisco Public Utilities Commission, which supplies much of the Bay Area, have built up water reserves.

“This isn’t a coming crisis,” said Mark Cowin, director of the Water Resources Department, the state’s largest supplier. “This isn’t an evolving crisis. This is a current crisis.”

Enough water will continue to flow to maintain public health and safety, the department said. The state is curbing delivery so that a small amount can be held in shrinking reservoirs to protect the Sacramento-San Joaquin Delta, an ecologically sensitive confluence of two rivers that feed into San Francisco Bay. The reserve is needed to keep salt water from seeping in and damaging the water supply.

‘Stark Reminder’

Governor Jerry Brown declared a drought emergency Jan. 17 in the most populous U.S. state after three years of below-average rainfall, including the driest year on record, left some reservoirs and rivers at critical levels. The 75-year-old Democrat asked residents and businesses to voluntarily cut use by 20 percent and warned that mandatory restrictions may follow.

Yesterday’s action “is a stark reminder that California’s drought is real,” Brown said in a statement. “We’re taking every possible step to prepare the state for the continuing dry conditions we face.”

Brown ordered the Forestry and Fire Protection Department, known as CalFire, to hire more firefighters because of drought conditions. The Public Health Department offered assistance to 17 rural communities with what it called “vulnerable” drinking water systems, and the Fish and Wildlife Department restricted fishing in some areas because of low water flows.

Reservoirs, Aqueducts

About two-thirds of Californians get at least part of their water from northern mountain rains and snow through a network of reservoirs and aqueducts known as the State Water Project, according to the Water Resources Department. Besides serving households and businesses, the system irrigates crops in the San Joaquin Valley near the center of the state -- the world’s most productive agricultural region.

“Except for a small amount of carryover water from 2013, customers of the State Water Project will get no deliveries in 2014 if current dry conditions persist and deliveries to agricultural districts with long-standing water rights in the Sacramento Valley may be cut 50 percent -- the maximum permitted by contract -- depending upon future snow survey results,” according to a water department statement.

The projection could change if more rain falls in coming weeks, officials said. But the drought has grown so severe, it would have to rain heavily every day through May to get levels back to normal, they said.

The drought in California, the top U.S. agricultural producer at $44.7 billion, is depriving the state of water needed to produce everything from milk, beef and wine to some of the nation’s largest fruit and vegetable crops, including avocados, strawberries and almonds.

Agriculture Threatened

Lost revenue in 2014 from farming and related businesses such as trucking and processing could reach $5 billion, according to estimates by the 300-member California Farm Water Coalition, an industry group.

The announcement in Sacramento came one day after the Metropolitan Water District of Southern California said it would ask customers to voluntarily reduce water use by 20 percent.

The abnormally low precipitation is likely to depress revenue for the district and other local agencies, Moody’s Investors Service said in a Dec. 5 note. Metropolitan, the largest U.S. supplier of treated water, is rated Aa1, second-highest, the company said.

It had $4.4 billion in long-term debt as of June 30, according to data compiled by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.