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California State Water Project Water Contractors

During the 1960s, as the Project was being constructed, long-term contracts were signed with public water agencies, known as the State Water Project contractors. They receive annual allocations, specified annual amounts of water, as agreed to in their contracts, which will expire in 2035. In return, the contractors repay principal and interest on both the general obligation bonds that initially funded the Project's construction and the revenue bonds that paid for additional facilities. The contractors also pay all costs, including labor and power, to maintain and operate the Project’s facilities.

Deliveries

The SWP's water supply capability depends on rainfall, snowpack, runoff, reservoir storage, pumping capacity from the Delta, and legal environmental constraints on project operations. Project water supply comes from storage at Lake Oroville and high runoff flows in the Delta. Water deliveries have ranged from 1.4 million acre-feet in dry years to almost 4.0 million acre-feet in wet years. In January 2000, the SWP exceeded 60 million acre-feet in total deliveries since operations began in 1962. SWP Annual Water Deliveries Chart

In most cases, contractors use SWP water to supplement local or other imported supplies. Five contractors use Project water primarily for agricultural purposes (mainly southern San Joaquin Valley); the remaining 24 primarily for municipal purposes.

Service Areas

The service areas of these contracting agencies extend from Plumas County in the north to San Diego County adjacent to the Mexican border. These contractors’ service areas comprise almost one quarter of California's land area and more than two-thirds of its population. While many of the contractors are agencies that have been in existence for many years, a number of the districts were formed for the express purpose of contracting for SWP water (Water Contractors Service Areas & Annual Allocations).

The SWP made its first deliveries in 1962 to the Bay Area. In 1968, service was extended into the central and southern San Joaquin Valley, and by 1972, Southern California areas began receiving their first deliveries.

SWP Contractors Payments

SWP contractors pay the same amount per acre-foot of their allocations for constructing and operating the SWP conservation facilities, which are used to develop the Project's water supply. These facilities include Lake Oroville, San Luis Reservoir, and a portion of the California Aqueduct from the Delta to San Luis Reservoir.

The Delta Water Charge, which is common to all contractors, provides funds to maintain water quality in the Sacramento-San Joaquin Delta, where the water is exported to various regions of the State. Each contractor also pays transportation charges for the construction, operation, and maintenance of necessary facilities to convey water to their respective locations. The greater the distance the water is transported, the higher the cost.

The SWP contractors also repay all costs related to the Project (SWP Contractors Financing Repayment Charts). Annual repayments total about $600 million a year (2002). Of that amount, operation and maintenance (O&M) costs for labor and equipment account for 30 percent. The cost for power (purchases less generation and sales) amounts to 20 percent. Bond service payments of principal and interest and repayments for other capital financing are about 50 percent.

Through 2001, the contractors have paid cumulative payments totaling $9 billion.