1. Central Valley Water Transfers Southern California Water Dialogue Steven P. Hirsch Transfer & Exchanges Program Manager Metropolitan Water District September 28, 2005 Steven P. Hirsch Transfer & Exchanges Program Manager Metropolitan Water District September 28, 2005

2. Factors Affecting Transfer Needs – Service area demands – Availability of member’s local supplies – Availability of CRA and SWP supplies Metropolitan Water District

3. Demands on Metropolitan

4. Colorado River Aqueduct Supplies

5. State Water Project Supplies

6. Surplus/Shortage Outcomes -1,500,000 -1,000,000 -500,000 0 500,000 1,000,000 1,500,000 100% 94%88%83%78%73%68%62%57%52%47%42%36%31%26%21%16%10% 5%0% Acre-feet Exceedence Probability

7. Metropolitan’s Storage Capacity Lake Mathews Lake Skinner Desert / Coachella Semitropic Castaic & Perris No. Las Posas Arvin Edison Diamond Valley Lake Year ’90’90’95’95’00’00’05’05 Millions Acre-Feet 1.0 2.0 3.0 San Bernardino Valley North Kern & Mojave Demo Kern Delta Prop. 13 Programs (start-up) Greater than 10x Increase

8. Shortage Actions Shortage Stages Actions 1234567 Public Affairs Program DVL Take Take from Semitropic, Arvin-Ed. Cut REPL Deliveries Contractual GW Take Take from Monterey Res. Extraordinary Conservation Call Water Transfer - Options Contracts Buy Spot Water Allocation Plan Potential Simultaneous Actions

9. February Call  76,232 AF February Call  76,232 AF March Call  49,998 AF March Call  49,998 AF 2003 Sacramento Valley Water Transfers May Call  No call for water  20,000 AF May Call  No call for water  20,000 AF GCID Western Canal W.D. Western Canal W.D. Richvale I.D. Richvale I.D. Sac. Valley Settlement Contractors Sac. Valley Settlement Contractors Placer County Water Agency Placer County Water Agency 11 Districts 146,230 AF

10. April Call w/ option to Extend to May Call 2005 Sacramento Valley Water Transfers GCID Western Canal W.D. Western Canal W.D. Richvale I.D. Richvale I.D. 3 Districts 125,000 AF

11. Value of a Late Call: 2005 Transfers NorCal precipitation (%) Average Northern California Precipitation 1921-2003 (Oct – Sept) 0 20 40 60 80 100 JanuaryFebruaryMarchApril April 1 Initial Call Date May 2 Second Call Date Jan 15 Purchase Options Forego option? Exercise option? Extend option? Forego option? Exercise option? May

12. Value of a Late Call (Con’t) -1,500,000 -1,000,000 -500,000 0 500,000 1,000,000 1,500,000 100% 94%88%83%78%73%68%62%57%52%47%42%36%31%26%21%16%10% 5%0% Acre-feet Exceedence Probability March 2005 February 2005 October/November 2004

13. Summary MWD’s storage and conservation investments reduce need for transfers Transfers are not needed every year Transfers = insurance against drought Prefer options with late call dates Transfers are not “risk free” Transfers require hard work