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FACTS

I. Water

We begin our examination of the current appeal by revisiting some foundational

background facts summarized in our prior opinion on the first appeal. The State Water
Project (SWP) was authorized in the 1950s, and was envisioned to become a system of

reservoirs, dams and other facilities for the storage and delivery of 4.23 million acre-feet

of water per year (AFY). The Department of Water Resources (DWR) manages the SWP

and operates its facilities. (California Oak, supra, 133 Cal.App.4th at p. 1227.)

When the SWP began, DWR entered into a number of long-term contracts with
water suppliers (DWR contractors) throughout the state. The central provisions of these

long-term contracts were the same: a DWR contractor was allotted an entitlement to a

certain amount of water from the SWP each year, in exchange for which the contractor

agreed to pay, on a proportionate basis, the costs of financing and maintaining the SWP’s

facilities. (California Oak, supra, 133 Cal.App.4th at p. 1227.) The long-term contracts
also included a provision –– “Article 18” –– outlining the procedures for the reallocation

of water among contractors in the event of water shortages within the SWP system.

(See generally, Planning & Conservation League v. Department of Water Resources

(2000) 83 Cal.App.4th 892, 898-900 (PCL).)

The entitlements to SWP water which were allotted to the contractors under their
long-term contracts with DWR were based on the predicate that the state would actually

build out the SWP as planned, so that it actually had the capacity and capability to store

and deliver 4.23 million AFY of water. The state, however, never completed the SWP as

envisioned, and, today, the SWP simply does not have the physical capability to deliver

4.23 million AFY of water to its contractors. On the contrary, the actual, reliable water
supply in the SWP is more in the vicinity of 2 to 2.5 million AFY of water.

(California Oak, supra, 133 Cal.App.4th at pp. 1227-1228.)

With this general background of the state’s water resources and some relevant

statutory schemes in mind, we move on to other events.

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