AWSA Update: NM CAP Entity’s Financial Capacity Called into Question as Deadline Looms
AWSA UPDATE:
NM CAP Entity’s Financial Capacity Called into Question as Deadline Looms
Parties discuss supplemental terms to NM Unit Agreement
September 14, 2015
Given concerns over financing of the Gila diversion, the Bureau of Reclamation has requested that the NM Unit Agreement be amended to include “supplemental terms” to clarify legal and financial roles and responsibilities between the federal government and the NM CAP Entity for the planning, construction and operation of the NM Unit. The supplemental terms outlined by the Bureau of Reclamation at a recent legislative committee meeting provide the Department of Interior with legal protections and assurances related to the NM CAP Entity’s financial capability to carry out its responsibilities for the NM Unit, environmental compliance and NM Unit design and operational standards.
The NM Unit Agreement must be signed by the NM CAP Entity and the Secretary of the Interior by November 23, 2015. As of press time, the parties are still negotiating the amendments.
Locals Don’t Want to Pay the $1B+ Price Tag for the Gila Diversion
Problems surfaced quickly this past summer during the negotiations of the Joint Powers Agreement (JPA) that formed the NM CAP (Central Arizona Project) Entity. The Entity wants full responsibility to design, construct, operate and maintain the NM Unit. However, because local parties to the JPA did not want to commit to funding the Gila River diversion, they required language that would allow a CAP Entity member to withdraw from the JPA at any time.
The Entity is comprised of 13 local governmental organizations (Grant, Luna, Hidalgo, Catron counties; Deming, Lordsburg and Santa Clara; four irrigation ditch associations; and two soil and water conservation districts) and the New Mexico Interstate Stream Commission. Silver City, Bayard and Columbus opted to not join the NM CAP Entity.
In response, the NM Interstate Stream Commission (ISC), the lead state agency charged with implementing the Arizona Water Settlements Act (AWSA) in New Mexico, made it clear that water users must pay for the NM Unit and that the state and ISC are not on the hook for any funding beyond the AWSA subsidy funds. This means that locals would be responsible for the $900M+ shortfall in costs.
Feds Won’t Be the Gila Diversion Sugar Daddy
The Bureau of Reclamation on behalf of the Department of Interior (DOI) provided “full disclosure” to the NM CAP Entity through its supplemental terms that the federal government won’t pay for the Gila diversion beyond the AWSA subsidy of $66M and explained that the availability of the second increment of $36M is very uncertain and the third increment of $28M highly unlikely. Because the DOI must comply with the Anti-Deficiency Act when implementing the NM Unit, the federal government would not be able to initiate construction of the NM Unit unless full funding is committed.
Additionally, BOR is concerned that the JPA calls into question that the CAP Entity has the capability of fulfilling the requirements of the AWSA. The Secretary of Interior in response reserves her right to come back to the table if there are any changes with the composition or roles/responsibilities of the Entity.
Some of the other terms on the laundry list clarify that the NM Unit must be designed, built and operated in compliance with BOR standards and that a separate Memorandum of Agreement will be required to lay out roles and responsibilities with respect to environmental compliance.
Next Steps
If supplemental terms are agreed to, the NM Unit Agreement will have to be approved by each of the governmental organizations party to the NM CAP Entity. Stay tuned for meeting dates and times so that you can lend your voice to that process.