Could ‘Angel Investors’ Buy a Piece of Friant-Kern Canal?

An investor funding proposal that could substantially increase the Friant-Kern Canal’s historic flow capacity is gaining interest among the Friant Water Authority’s member districts.

In theory, that investor money could bump the amount of water that has historically flowed down the canal on the Central Valley’s eastern flank by up to 800 cubic feet per second — or more.

It wouldn’t be cheap.

A Friant Water Authority survey sent to its members last month suggested the price per CFS could be $200,000.

That kind of money would mean water districts would likely have to partner with outside investors.

Who those outsider investors might be, remains an open question.

Before getting to the investor stage, though, the canal would first have to be repaired to its historic operating level, which has been damaged by land subsidence in its southern section.

Then there’s a choke point to the north that would have to be dealt with before outside investment would make sense.

And behind all those issues, SGMA still lurks.

Increasing the Friant-Kern Canal’s capacity would only be attractive if investors could reap “excess” water from flood flows in big water years.

But with water managers throughout the valley scrambling to shore up groundwater supplies per the Sustainable Groundwater Management Act, flood flows may already be spoken for.

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33 Mile Sag in Tulare, Kern Counties

The Friant-Kern Canal has a 33-mile-long sag between Pixley in southern Tulare County and Lake Woolomes in northern Kern County.

That sag has severely restricted the amount of water it can carry south of the sag from 4,000 CFS to 1,400 CFS.

The cost to fix the sagging section is around $400 million, according to the Bureau of Reclamation, which owns the canal.

Click here for a map of the Friant-Kern Canal.

Cash on Hand

The Bureau has $50 million for environmental and other pre-construction work.

It has requested another $70 million, which Congress is considering.

Assuming it gets the $70 million, that would bring the total to $120 million, which Friant water contractors must match.

If all that money comes in, it would give the Bureau about $240 million for construction.

That amount would be enough to rebuild the canal to carry between 2,500 and 3,000 CFS, Bureau Program Manager Adam Nickels told SJV Water last month.

The most likely prospects for more government funding are two bills, each with $200 million for the canal.

One by Rep T.J. Cox, D-Fresno, was folded into HR2, a larger infrastructure bill, and passed the House July 1 but has yet to be heard in the Senate. The other, SB 3811, was introduced in May by California Sen. Dianne Feinstein and is still in committee.

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Funding Split Into Zones

Friant Water Authority, meanwhile, has introduced a Zone 1, 2, and 3 funding proposal with its member districts, according to chief executive officer Jason Phillips.

Zone 1, he explained, would be a “no-build” option. Essentially, contractors would live with the canal as is.

Zone 2 lays out a variety of funding sources. They are:

— $50 million from a surcharge of $5 million a year tacked on to the canal operations and maintenance fees paid by all Friant contractors, including those to the north that aren’t affected by the sag.

— Settlement money from Groundwater Sustainability Agencies that represent farmers who overpumped near the canal and caused the subsidence that led to the sag. Phillips is still negotiating with those agencies and didn’t have a settlement amount.

Zone 2 is expected to get the canal back to historic operating capacity, according to Phillips.

“Operationally, everything would be exactly as it has been,” Phillips said of how the canal would work under Zone 2. “The contracts and rights would work exactly the same.”

Water Classes

Zone 3 is where the investors come in.

Money from Zone 3 investors would pay for increased capacity beyond Zone 2.

And water moved using Zone 3 capacity wouldn’t be subject to how the Bureau currently pro-rates which water gets priority in the canal, according to Arvin-Edison Engineer-Manager Jeevan Muhar.

There are two basic types of Friant water contracts — Class 1 and Class 2.

Those allotments are based on the type of water year, with Class 2 allotted in wet years.

In big water years, canal capacity plays a large role in which class of water is moved with Class 1 water taking priority.

Arvin-Edison is the largest Class 2 contractor in the Friant Division.

“So, we can get kicked out of the canal when Class 1 water is moved,” Muhar said of Arvin-Edison’s Class 2 water. “With the Zone 3 concept, there’s no fear of that water getting pro-rated out” in the southern section of the canal.

His board of directors is very interested in the potential for Zone 3 water.

Arvin-Edison responded to an interest survey from Friant Water Authority, writing that under a worst-case scenario of no Zone 2 capacity, it may consider investing between $40 and $140 million for an additional 200 CFS to 700 CFS.

And there’s also concern about the choke point in the canal near the Kings River.

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Design Flaw Causes Choke Point

The choke point has always been a part of the Friant-Kern Canal, Muhar explained.

It was a design flaw based on an incorrect concrete designation.

Essentially, the Bureau assumed that section of the canal was built with smoother concrete than it was. Rougher concrete equals less flow.

That original design error resulted in “less room from day one,” Muhar said.

Contractors have lived with it for nearly 70 years.

But now that they’re looking at paying for more capacity, the choke point has become a problem.

“It currently doesn’t make sense to invest in a project to convey more than 2,500 CFS if you can’t get the additional water through that point,” Muhar said.

About SJV Water

SJV Water is a nonprofit, independent online news publication covering water in the San Joaquin Valley. Lois Henry is the CEO/editor of SJV Water. She can be reached at lois.henry@sjvwater.org. The website is www.sjvwater.org.