SWP Management

The water supply availability for delivery by the SWP depends on rainfall, snowpack, runoff, reservoir storage, pumping capacity of SWP facilities, and regulatory and environmental mandates on SWP operations. Water from rainfall and snowmelt runoff is stored in SWP conservation facilities such as Lake Oroville, flows through the Delta and is delivered via SWP transportation facilities like the California Aqueduct. Water deliveries have ranged from 17 thousand acre-feet (af) in 1962 to about 3.7 million af in 2006.

SWP Water Supply Contracts

DWR administers long-term water supply contracts with 29 public agencies and local water districts, collectively known as the SWP water contractors. These contracts, originally executed in the 1960s while the SWP was under construction, establish the contractual framework for providing water service and serve as the foundation for the financing, operation, and long-term management of the SWP.

Under the contracts, DWR is responsible for financing, constructing, operating, and maintaining SWP facilities. In return, the SWP contractors agree to repay all capital, financing, operation, maintenance, labor, and power costs associated with the Project. The contracts also establish each contractor's maximum amount of SWP water it may request annually, referred to as its Table A amount. Actual water deliveries vary annually based on hydrologic conditions, including rainfall, snowpack, runoff, reservoir storage, pumping capacity, regulatory and environmental requirements, and the combined requests of the contractors.

Most SWP contractors use SWP water to supplement local or other imported water supplies. Five contractors primarily use SWP water for agricultural purposes, while the remaining contractors primarily serve municipal water needs. Contractor service areas extend from Plumas County to San Diego County and encompass nearly one-quarter of California's land area and more than two-thirds of the state's population.

DWR administers and maintains the original contracts, subsequent amendments, and consolidated contract versions that integrate amendments into the original contract language for reference purposes. 

DWR also issues Notices to State Water Project Contractors (NTCs) throughout the year to communicate information regarding SWP allocations, water supply programs, billing, and other administrative matters. These notices have served as the official means of announcing annual Table A allocations and other contract administration information.

SWP Table A allocations are established annually and may be adjusted throughout the water year as hydrologic conditions evolve. Initial allocations are based on conservative assumptions regarding available water supplies and may be revised as actual and forecasted water supply conditions become known. 

Contract Extension Amendments

The Water Supply Contract Extension Amendments were developed to ensure the long-term financial viability of the SWP. The original SWP water supply contracts, executed in the 1960s, were scheduled to expire between 2035 and 2042. As those expiration dates approached, DWR's ability to finance major capital improvements became increasingly constrained because revenue bonds could not reasonably extend beyond the remaining contract terms.

For those SWP Contractors who signed it, the Contract Extension Amendments extended the term of their respective long-term SWP water supply contracts through at least December 31, 2085. Extending the contracts allows DWR to issue long-term revenue bonds with repayment periods that more closely match the useful life of SWP infrastructure, reducing financing costs and supporting continued investment in the Project. The Contract Extension Amendment took effect on January 1, 2023.

In addition to extending the contract term, the amendments modernized the SWP's financial framework by:

• increasing operating reserves to improve financial stability;
• transitioning capital cost repayment from an amortized financing approach to a more comprehensive "pay-as-you-go" methodology;
• updating billing provisions to better align revenues with annual expenditures; and
• revising financial management provisions to support the long-term operation, maintenance, repair, replacement, and rehabilitation of SWP facilities. 

Water Management Amendments

The Water Management Amendments were developed to update and modernize water management provisions of the long-term water supply contracts by providing greater flexibility for transfers and exchanges of SWP water within the SWP service area.

On February 28, 2021, the SWP Water Supply Contract Amendments for Water Management took effect for those SWP Contractors who had executed them.