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<br />7A - ATTACHMENT NO.3 <br />Saltworks Proposa/- Water Group Summary Report (22 January 2010) Page 47 <br /> <br />the lower Kern River. This water has been subject to multiple agreements over the <br />years, including certain storage rights in area reservoirs. <br /> <br />In 1981, Nickel and the Olcese Water District (OWD), a private water company regulated <br />by the California Public Utilities Commission (CPUC), entered into an agreement <br />regarding these water rights. Under the terms of this agreement, OWD obtained the <br />rights to use water from the lower Kern River sufficient to meet the needs of its <br />customers, and Nickel retained the right to use any water in excess of OWD's needs. <br /> <br />2000-2001 <br />On September 7,2000, KCWA approved the "Kern River Restoration Program." KCWA <br />received an appropriation of $23 million from the State to carry out the program. The <br />program had various elements, including River restoration activities, groundwater <br />banking, and the installation of wells and other infrastructure. The program also <br />included the acquisition of water rights to the lower Kern River. KCWA already had <br />certain rights to this water. The program consisted of acquiring the balance of such <br />rights. KCWA adopted a Negative Declaration (for CEQA compliance) in connection <br />with its approval of the restoration program. No CEQA challenge to the restoration <br />program was filed. <br /> <br />On December 15, 2000, KCWA entered into an agreement with OWD and Nickel.4 <br />KCWA approved the KCWAlOWD/Nickel agreement in Resolution 88-000. The <br />resolution stated that the agreement was part of the Kern River Restoration Program. <br />The agreement included a variety of provisions conveying property between these three <br />entities. For purposes of the OMS source of supply, the following provisions are <br />relevant: <br /> <br />. The agreement recognized that OWD and Nickel owned certain rights in <br />lower Kern River water. The agreement states that OWD and Nickel were <br />the sole owners of such rights. <br /> <br />. Under the agreement, KCWA acquired those rights. The agreement states <br />that historically the rights yielded "on average 50,000 acre-feet per [y]ear." <br />Elsewhere, these rights are identified as the rights to high seasonal flows in <br />the lower Kern River. According to the agreement and related documents, <br />the flows have fluctuated significantly from year to year. Some years, no <br />excess water was available in the river. Other years, flows reached over <br />500,000 acre-feet. Flow data through 2000 indicated that the average flows <br />were in the range of 40,000-50,000 AFY (although, as noted above, the flows <br />fluctuated dramatically). <br /> <br />. Under the Kern River Restoration Program, KCWA would capture and bank <br />this water in high-flow years. The banked water would then be available for <br />extraction during other years, when DWR cuts back on KCWA's entitlement <br /> <br />4 Other documents refer to this agreement as the "Nickel-KCWA Agreement," and state that the agreement <br />is dated January 23, 2001. The agreement itself is dated January 23, 2001. It appears that, although <br />KCWA approved the agreement in December 2000, the parties did not execute the document until the <br />following month. Because the deadline for challenging the agreement expired long ago, the discrepancy in <br />dates does not affect the water team's analysis. <br /> <br />40 <br />