[inaudible] >> i was hoping to get transportation in 2001 because my whole background is in trade and transportation. i was a transportation banker for a number of years for both citicorp and bank of america and i had worked for transportation companies, so my whole background is actually in transportation, so it is nice to be able to return to a field in which i have worked previously and it's nice to be able to be back in a department on the familiar with the. >> watch her interview with elaine chao, secretary transportation in the trump administration tonight at 8:00 p.m. eastern on c-span,

c-span radio and a c-span.org. >> water management and drought preparedness were the focus of a senate energy and natural resources subcommittee hearing this week. from hat-- capitol hill in this runs just over an hour. [inaudible conversations] >> the hearing of the senate energy and natural resources subcommittee will come to order. at the purpose of today's hearing is to receive testimony on water supply and drought issues. we will hear testimony on aware cache range of topics including

of the structure and supplied, certainty and planning and innovative management practices that are critical to maintaining secure water supplies. this includes items that are crucial to arizona such as the colorado river drought planning and watershed restoration, better use of existing reservoirs, reliable water supply and drought protection cannot be achieved without storage of the structure and forward thinking management and planning. often times discussions on water policy at the federal level are dictated by cost. however, it's important that congress consider the barriers local communities face as they plan and pursue new water projects. i look forward to today's hearing to hear how states of local policies encouraged judicious water use and help permit streamlining the regulatory particularly can ensure that all solutions on the table. we will hear about innovation and water treatment technology and project financing that can help with water of the structure

and supply challenges. we live in an age that when you expect when you turn on the tap there is water and the water will always be there, which means supply certainty is critical for managers. protecting the santa did state water rights, reserving-- resolving conflicts as we will see today to help ensure water certainty as missing in arizona providing this certainty can also unleash innovative partnerships that improve water management. finally, changes to operation and management of existing infrastructure can be cost-effective water strategy as well. i'm glad the committee will hear from several witnesses today who can speak to that importance of using the most up-to-date hydrology and forecasts and operating the existing reservoirs. i think we can learn from this testimony and build on last year's drought red-- legislation to address critical water needs for arizona in the nation.

water managers on the ground have great ideas about how to increase water supply and drought resistance and i look forward to working with them on these efforts in addition to the experts we will hear from today we have received a number of written statements for the hearing record and i will consider that input as we move forward as well. senator franken and i were talking a bit ago. this is important for arizona and i noted for all of my life whenever it rains no matter where i was living when i would see rain i would have instinct to call my dad because he was an old rancher and that was when he was in a good mood. [laughter] >> our favorite time as a family was to hop in the truck after eight good rain to see which tanks had filled and that was our version of excitement in snowflake, arizona. anyway, i'm glad we are having this hearing and i'm glad to

have a ranking member angus king from maine and i turned to him for his opening statement. >> thank you, mr. chairman and thank you to our expert witnesses. welcome to washington at this time of year. if you're like me you would probably rather be in maine on a day in august. as the chairman mentioned we will hear from a range of point of view this morning on different approaches to maintaining a healthy water supply. even in maine we are not immune to the impacts of a fragile water supply due to drought conditions. we recently had our first drought in 14 years which impacted 70% of our state and a very significant percentage of our state's residents, i think almost half depend upon wells for their water. .-dot drought finally ended this past april, but it was a very serious matter for us and i understand my companies in the

west probably aren't very sympathetic to hearing about drought in new england, but they do occur in all regions of the country with the serious issues, so i look forward to hearing about the different approaches that have been developed in other parts of the country. the critical nature of water management across the country has stimulated a variety of approaches to planning and financing. for example, we were-- will hear from martha shields in regard to importance of green infrastructure improvement on the water supply and i also look forward to hearing how we can promote public-private partnerships in water infrastructure projects and use the lessons where infrastructure improvement is in fact desperately meet needed. we will also hear about the value of planning and flexibility that we can provide in water management. while we have different specific water concerns around the country and needs depending upon

where we are we can certainly take lessons from these folks who have joined us this morning to think differently and use more creative approaches to water management. public-private partnerships, innovative infrastructure technology solution, so mr. chairman, thank you for calling this hearing and i look forward to hearing from our witnesses with their testimony. >> thank you. we will turn to the witnesses today and thank you for joining us today. i will begin that panel with mr. tom buschatze, director of arizona department of rutter-- water resources or tom, i greatly appreciate the close working relationship we have had and all you have done for the state of arizona on critical water issues. you have been an important water leader for the state and will is a 4w before the senate. next we will have a ms. shirlee zane, chairman of the board of the sonoma county water agency. then, martha sheils project

director for the new england debarment zero finance center animosities hearings are typically western focus, so it's nice to have a witness to talk about things going on in maine. then we will hear from heiner markhoff, president and ceo of ge water and finally we will hear from carlos reva, ceo of poseidon water. thank you for your testimony and we would like to limit your remarks if we can for five minutes to read time for questions and your poll remarks will be submitted for the record and with that we will recognize mr. tom buschatze. >> thank you and good morning. i am trying to-- tom buschatze, thank you for providing an opportunity to testify. i have submitted written testimony for the record and my comments today will highlight key issues.

arizona continues to develop and improve the legal framework, policy prescription, institutions and if the structure needed to secure its water resources, create certainty and prepare for drought. the state prioritizes actions to collaborate with the federal government. aggressive water management actions have resulted in a reduction in arizona's water use while its population in economic output have increased all while decreasing my groundwater usage. for the past 20 years the job has been a concert in arizona. wind shortage on the colorado river is declared, that he 4% of the total falls to arizona. this knowledge drives robust drought mitigation programs in the state. i want to share examples of innovative water management actions in arizona. first, the palo 33rd generate station for reclaimed water for cooling purposes in 1973 became a common practice.

in 1986 and again in 1984 the landmark groundwater management act was to-- the program promotes the use of existing infrastructure to reduce cost and the water can be used for drought management or growth. the arizona water banking authority was created in 1996. it has a stored over 4 million acre-feet for arizona, but also stored 600,000 acre-feet for nevada. our underground a storage credits can be marketed to others. tribes, lease water to others facilitated by federally authorized tribal water rights settlements. one reason the state's policy is to settle rather than litigate tribal water rights claims, there are 11 tribes in arizona with pending claims and so much work needs to be done. arizona's efforts to deal with drought impact to the colorado river, major activities are

ongoing. over the past decade the risk at that lake mead might fall to unhealthy levels has risen to unacceptable levels. in response, arizona, nevada, california and the bureau of reclamation negotiated a draft drought contingency plan. the dcp further incentivizes the conservation and storage of colorado river water in lake mead grading greater flexibility to recover some of that water. under the dcp arizona and nevada would take additional reductions and for the first time california would take reductions to protect critical lake mead elevation. a draft minute would have mexico take action when both agreements are finalized. arizona believes congressional authorization likely through

this subcommittee directing the secretary of the interior to execute dcp will be pursued with the dcp is finalized the. that authorization will create certainty for all parties. as demonstrated by the groundbreaking measures i've outlined collaboration and all hands on deck approach is the future of the colorado river. within the state we will do more with our existing infrastructure , the bureau of reclamation completed a system use agreement earlier this year, something that chairman has been prodding the department of interior to complete. it allows for wheeling of non- project water. that agreement creates a clear pathway for the recovery of water stored underground and the transport of the water in the canal to entities who will be shorted by colorado river reductions and we will also

allow for exchanges between water uses which lowers their cost and creates flexibility. another opportunity is the use of dedicated flood control space to increase the shield by an average of 70000 acre-feet per year. to date compliance and process issues for interested parties to set aside their efforts, streamlining the process similar to the amendment that was inserted into the energy bill last year to make that a reality in conclusion, arizona's internal efforts to manage the water resources it is collaborative effort on the colorado river will be most successful in a setting where federal oversight minimizes legislation. thank you. >> thank you. >> thank you. members of the subcommittee, thank you for the opportunity to testify today.

my name is shirlee zane and i serve on the board of supervisors for sonoma cala california and as a chairwoman as the board of directors for the sonoma county water agency. proud to be here today to provide a local perspective on water management. we believe securing our water future means investing in our water resources. water is life. we have the pleasure and awesomeness possibility to deliver safe affordable drinking water 365 days year 24 hours a day. drought or flood we must provide a secure water supply. there are two points that i would like to convey to the subcommittee this morning. first off, the use for reservoir operations are woefully outdated and they are in dire need of update. secondly, western water managers require in proved long-range forecasting of precipitation in order to manage water resources

for both extreme wet and dry conditions. we managed to projects that provide water supply for the people in sonoma and marin county's. there are dual purpose reservoirs at the us army corps manages flood protection function and the water agency manages water supply function. the lake water control manual was created in 1959, nearly 60 years later the manual has not been adjusted. in 2013, the core was required to released way 5000 acre-feet of rainfall from the reservoir because it had to adhere to that antiquatedrule curve despite weather predictions that no rain was forecasted. the reservoir dropped to 25% capacity later that season and sonoma county lost water valued at 10 the millions of dollars. if we had updated accrual curves sonoma county would've been better positioned to adapt to the prolonged drought that

followed in the next four years. unpredictable-- unpredictability in our weather pattern and climate means we are constantly managing water supply with an underlying goal of becoming more resilience. not only is resiliency critical for our security, but it also makes sense economically. we embarked upon a initiative and 4014 with several state partners to improve weather forecast modeling in managing reservoir operations. the effort is called forecast informed her reservoir operations known as-- in a partnership with the core the bureau of reclamation and the state of california as well as their agency. this summer the partnership released a preliminary viability assessment for the lake and that document is a dock-- a passionate our testimony and our ultimate goal is to put in place

a modern rule. we in the west need better data and long-term forecasting to improve water management. in california we experience atmospheric rivers. these atmospheric rivers provide about 50% of the yearly rainfall in california within a few storms. the frequency and location are the primary drivers of flood and drought however rainfall forecasting beyond tend to my 14 days remains unreliable. information about weather is crucial for operating while others-- water supply and flood control infrastructure. these sub seasonal to seasonal rainfall forecasts are critical for improving efficiency of water project operation. we are working with western states water council to build a coalition of stakeholders committed to working with our partner to improve forecasting capabilities. the need for global system to actively predict the weather pattern is critical.

they are leading the way. the bottom line is this. that are science leads to better data and a better data would greatly benefit reservoir operations. we are committed to working with this committee and other members in congress to support securing our water future by vesting and better technology. we know modern technology could be used more effectively to mayonnaise-- manage our reservoirs. future generation status track now to secure water supply. thank you again for this opportunity to testify and i'm pleased to answer any questions you may have. >> thank you. martha sheils. >> good morning mr. chairman and ranking member king, thank you for this opportunity to appear today. im martha sheils, the director of the new england of our mental finance center.

knowing how busy you all are i would like to make three key points, first that clean water is essential for growing our economy, protecting our health and ensuring security of our nation. second, there is cause for hope in numerous examples around our country on how state and local government are saving money by investing in watershed conservation and sustainable management practices and finally, that the federal government support although helpful should be expanded. clean waters a critical component and essential for tracking and retaining businesses, residents and tourists took in maine we now have two computer chip manufacturers as well as proliferation of microbreweries all of which require high quality tap water in plentiful supply. in the bay watershed alone almost 20000 jobs in the tourism sector depend on that base health. in maine our entire country is ripe with numerous opportunities

to protect a manage our watershed promoting cost savings and provide multiple economic benefits. ebay example located in senator king's backyard is the lake watershed. 's supply some of the cleanest drinking water in the country to the greater portland area, which is the economic engine of the entire state. portland water district has a sustainable forest management program to keep the watershed healthy and resistant to invasive species and fire threat with the primary objective. the bad news is that 90% of the watershed is privately owned and development pressures are developing the district epa filtration waiver. the district is considering a mix of management scenarios for private land including buffers, covert upgrades, conservation easement and sustainable for street. these nature -based solutions cost approximately one third of what it would cost to build a

new filtration plant. if we had the other benefits like wildlife habitat protection, recreation, carbon sequestration and others to the aborted cost of not building a filtration plant, the net positive benefits increased tremendously. on a larger sale-- scaled new york city invested $1.4 billion to purchase conservation land at its drinking water source. ultimately saving approximately $5 billion compared to the constructing of a new filtration plant. protecting natural infrastructure also pays off by mitigating flood damages. tropical storm irene caused extensive damage in vermont in 2011. where flows or should have been even higher they were actually far less because large conserved water-- wetland complex absorbed the floodwaters, say because of

flooding. maine's shoreline is increasingly vulnerable from sea level rise and are clear economic benefits from preserving and restoring coastal wetlands. in urban areas, green infrastructure that mimics nature, things like fire retention areas, green ribbon rain gardens are more economical than sewer separation projects to manage a storm water and because green if the structure installments are many and few they very very well increase security by relying on a diversity of approaches rather than centralized facilities. the challenge for maine and the rest of the country is to better use existing available funds to first of all protect existing natural infrastructure and second to promote infrastructure that mimics nature in more urban watershed. finally, financing programs at the federal and state levels

should require or at least encourage economic analysis in the evaluation of projects that clearly show the cost, benefits and trade-offs of projects as in the portland water district in new york city examples. by doing so, the most cost-effective project should be chosen to encourage savings and generate multiple benefits such as water quality protection, resistance to invasive species, wildlife habitat and rick ray sharples kit all the same time. we need your help to tell these stories widely so private and public landowners adopt sound financial practices that are cheap multiple benefits. i will leave you this, an ounce of prevention is worth a pound of cure. help us implement most cost-effective strategies and provide multiple but if it's at the same time. thank you for your time. >> thank you.

heiner markhoff. >> good morning. thank you for the opportunity to testify regarding the importance of securing sustainable water future. my name is heiner markhoff and i am the president and ceo of ge water within the ge power business p ge water is one of the world's leading advanced water treatment technology companies with more than 50000 customers in approximate 130 countries employee roughly seven thousand people worldwide. our solutions and portfolio enhances water, wastewater and productivity and help businesses and communities overcome scarcity challenges and comply with regulatory requirements. so far, more than 4000 of our customers have connected over 40000 assets into our digital platform helping to optimize water efficiency through

real-time responsiveness. overall our installed base technology enable customers to treat over three billion gallons of water a day. we expect to invest about $500 million in research and development over the next 10 years and i would like to mention in march, ge announced it has signed eight agreement to sell the water technology business to a global service and solution company with operations primarily in water and waste management. the deal remains subject to customer closing and we expect to close by the end of the third quarter. our strategy will remain and strengthen as we transition. according to market research the global population will grow by another 3 billion people by 2050 this growth in population will require 55% more water in a proximally 70% more energy and demand that cannot be met with current resources.

even though the world is facing increasing demands we believe greater water reuse can help address scarcity. its estimated globally only 4% of waste water is currently, but we know it's possible to reuse more water. for example, in israel nearly 80% of wastewater is reuse and 40% in singapore is met with new water. in the us approximately seven to make a percent of all wastewater is reused, but in areas like california nearly 60% of the 1.6 trillion gallons of wastewater per year is reused with an increasing trend. our business serving the public in march of this year regarding its perception of reusing wastewater. the response was reassuring with 49% willing to drink reused water up from 40% a few years ago. even though we work with communities to reuse their

wastewater we focus on water reuse for industrial processes where doesn't have to be treated to be safely used. the majority of my written testimony focuses on how advanced water treatment solutions can be adopted by communities and industries to help address water scarcity, address economics of reuse and energy efficiency and the adoption of digital solutions. deploying these technologies across the water ecosystem will secure a water future and i believe that our company and other providers and research institutions will continue to find ways to bring innovation to market. in addition to developing and implementing water reuse technologies, we have released a series of reports highlighting policy options for promoting more rapid adoption of reuse solutions and we have some publications that will make available for everyone. the major policy options include education and outreach to

provide information on and recognition of the water recycling and reuse efforts, reducing or removing regulatory or cost barriers such as the fact that there are currently no nationwide quality standards for reused water provided financial regulatory or other incentives for recycling and reuse and mandating more water recycling. we believe our technology can unlock economic power of water by adopting water reuse programs to the climate cycle by harnessing the energy and wastewater for entry neutral plan operation by leveraging data via the internet to solve complex water infrastructure and treatment challenges. thank you for holding this important hearing and for the opportunity to present this testimony and i look forward if your questions and working with you to address these challenges. >> thank you. mr. reva. >> good morning and thank you for inviting me here today.

my name is carlos reva and i am president and chief executive of birth-- poseidon water come in development company that delivers large-scale complex infrastructure projects to water agencies through public-private partnerships. my written testimony describes characteristics of mp3 business model which is widely used in areas such as the uk, canada and australia and getting acceptance around the world to speed up infrastructure delivery without body to public debt. my own company poseidon water has been developing water infrastructure projects in north america using the three approach for more than 20 years and our signature project with 50 million in per date seawater desalination plant, which is the largest and most advanced desalination plant in the western hemisphere is serving san diego county california. after a lengthy permitting period it was constructed on time and on budget and today

supplies about 10% of the daily water needs. i would like to make for brief and simple points. first, we must anticipate and plan for future water supply challenges that are brought on by factors such as publishing growth, economic growth, aging of existing water systems and changing climatic factors. it takes years to implement projects to meet large-scale regional water needs and we can afford to wait until we are in crisis. second, now more than ever is the time for closer cooperation between the public and private sectors to meet this challenge. across the us many of our water systems have gone three or four decades with a low investment. the capital needs to bring our water system of two modern standards is estimated to be in the hundreds of billions of dollars. given today's harsh political realities public water agency capital budget cannot cover

this. fortunately, many private investors are willing to invest through the vehicle p threes for the modest but steady long-term return offered by infrastructure projects. third, to skeptics who fear the loss of public control over crucial public facilities met me at the site a key point. a well-designed piii project is different from outright privatization. is in reality a alternative method project delivery over defined concession period with specified performance obligations and i would be happy to illustrate the difference by focusing on the example of our partnership san diego county water authority. in this case the water agency exercise a high degree of control over the design and operation of the project and ultimately will assume ownership of the plant at the end of the contract. fourth and finally, there are simple and significant steps

congress can take to remove barriers. my testimony describes a few propose reforms such as limits on the use of private activity bonds or path which could be lifted. also, the bureau of reclamation finance authority could be brought into a program similar to the recently enacted program at epa which was itself based on the successful model for transportation project. and restrictive budget scoring rules related to piii repayment stream should be re-examined. let me close by noting that in the united states we have long since come to accept and embrace private financing for many other types of infrastructure serving public needs such as transportation, energy and telekinetic asians. i feel the time is right to bring this approach to renewing our water systems specifically through the model of public-private partnership. where this model fits it offers a win-win for everyone at a time when our country needs a

nonpartisan wins. water agency can meet their service obligations and conserve their borrowing capacity for the private sector puts of the capital. the consumers get the benefit of much-needed infrastructure on a faster schedule and more predictable terms. everyone works together for the good of the citizens and the overall economy. thank you and i look forward to any questions you may. >> thank you all for your testimony. we will start a round of questions. i will start with tom. you point out in your testimony that cuts to arizona colorado river supply take under the shortage declaration with efforts underweight to keep water in the lake and you talk a lot about this. last year the department of interior provided assurance that arizona's conserve the water would not be delivered to farmers across the river in california and it's my understanding tcp as a permanent fix for this so-called system water.

if the dcp will not take into effect until next year at the earliest are we operating once again without doi assurances? >> chairman flay, we do not have those assurances in writing. we would like to see that happen this calendar year the assurances we had last year ran out at the end of 2016. is imperative that conserve water stain the lake. of the efforts of arizona, nevada, california and mexico over the last several years to serve-- conserve water in the lake actually had a shortage, so it's critical that water stain the lake and the certainty that commitment in writing from the department of interior would give us would allow us to continue to go ahead with confidence that the money we are spending to conserve that water in the lake will be well served. >> perception by some is that the drought ended in the west with all of the rain particularly in the sierra

nevada. what has the what wetter winter that we have had-- has it changed the equation at all for the lower basin? >> it has reduce the probability that lake speed will go into shortage or fall to lower shortage levels in the future, but the wet winter that started peter daut in the spring and between march and june they lost about a 2 million-acre feet off the runoff projection, so give us a brief respite, but there's more to do it without the water conservation that we have done in lake mead right now, we might even be short and 28 despite the good winter we had this year's sema, was glad to see in your testimony you covered the reuse of reclaimed water, the recycling we have an arizona. frequently we hear about water recycling. it comes when we-- when it's talked about it comes with a request for the government to build a treatment plant for

recycling projects. in arizona we have seen projects from tucson to phoenix to treat that does not require federal funds. can you explain how arizona state water lot treats affluent and how it has graded situations where private entities have incentives to invest? >> yes, chairman. the nuclear generation station contract that i mentioned earlier spurt a lawsuit in arizona and the supreme court in 1989 did rule that treated wastewater is the property of the entity that treats its. that really did incentivize folks for doing reuse, building the plans, building infrastructure and i think the certainty that that framework created in arizona has led to arizona using quite a bit of its water for reuse in the phoenix metropolitan area almost 100%

and same in tucson. we have long been leaders in reuse and that was one of the key factors that allowed us to achieve that goal. >> thank you, heiner markhoff. you mention you use predictive analytics to better utilize these systems in private investment that you have your explain that. >> >> what we are really talking about in different areas, one just looking at the plant operation itself as performance management it's really about improving productivity, efficiency, predicting downtimes and taking preemptive measures and basically protect and prolong that asset life of the

plant operation. if you look outside of the plant itself, we have our-- large infrastructure and there is a whole slew of different tools to protect the health, to protect leakages, to address non- revenue water, preventing leakages through preemptive maintenance activity and together with analytical tools and analysis upfront this clearly helps to drive improvements and operating productivity and efficiencies. >> senator king. >> thank you, mr. chairman. i was struck by your testimony, ms. zane and the desire for more certainty and more science in terms of predict ability. what bothers me is that the budget recently submitted by the administration cuts the noaa budget by 16%, cuts research in noaa by 32% and even cuss the

national weather service bite 6%. you said we need better data to better manage and i would say we also need better data to make better policy and i find that very concerning for all of the work we are doing here. if we don't have the data and predictability it will aggravate this problem. would you agree? >> 100%. we have got to invest in technology and just to remember what it costs us when we don't invest in technology. we went down to my 25% of our reservoir because the corps of engineers were following a rule based upon the upcoming precipitation. on the other hand, we have been able to keep more water this last season where we had our rush river flooded three times, so basically in one year sonoma county was declared both an emergency in terms of the drought and in terms of flood,

so we truly know that extreme differences and i think it's all about investing in the innovation it's about better forecasting and disguise so we can better manage water on the ground. weather is an ethical part and we do know that even with the science that we now have been working on, if we install the proper radars along the coast in northern california we will have basically a forecast that gives us three to my four days in advance to prepare for floods and keep that water in the reservoir. so, that is the thing we have got to track. we see again extreme weather differences and i could not agree more. noaa has been an integral partner. ..

>> for per-person. i think it varies this different parts of the country. certainly, in arizona where it doesn't rain much, the outdoor use that attaches through a home, for example, you need water to meet that demand. so it would be a very different number than perhaps on the east coast. so perhaps on the east coast

it's 50 or 60 gallons per day, in arizona, 170, 150, somewhere in that range is a more reasonable number. >> well, okay, so is there sort of global calculation of what's the potential for either conservation or reuse? is it a third, a half? i mean, can we invent our way out of this problem? we haven't gotten to desalinization yet, but let's talk about the potential for simply low-flow toilets, just more conservation measures. >> so at least in arizona, senator king, we have been doing conservation since 1980. we reduced in the population centers our gallons per day by 25-30%, in some cases more. we have projected out our future supplies and demands, and we know that conservation alone will not achieve the goal of keeping up with growth this population and economy -- in

population and economy. we do know, however, that reuse might fill as much as 50% of our future growth projections. >> so those are two areas that we've just absolutely got to concentrate on. >> yes, absolutely. >> sheils, i think you gave this calculation, and it's an important one, and that is can you dollar value the natural protections, buffers and the like, versus filtration? and i think you gave a figure on that. >> yes. in the case of the sabago lake watershed, in order to preserve the needed natural infrastructure, the frees around -- the forests around the lake, it costs a third -- it cost a third less than to build a new filtration plant that would do the same work that the forest floor does now. >> to follow up on that, are there differences in abilities

to finance those two solutions? in other words, can you get federal grants, for example, for a filtration plant but not for acquiring buffers? >> you can get some grants for filtration plants through state revolving funds and some federal programs, but for acquiring land it's much different. some state revolving funds do finance purchase of land by drinking water utilities, but they don't allow the coordination of purchase with land trusts who might be interested in that same piece of land. >> i would be interested if you could supply us for the record a sort of comparison between buying a filtration plant and protecting naturally and what policy, tax policy, grant policy, how it works. i'm interested in whether we are providing sufficient incentives

to do it naturally as opposed to mechanically. >> well, for one thing doing can it naturally is always less expensive. in the case of -- >> but, but, i understand that. but my question is are there perverse incentives or penalties, tax benefits. that's what i'm looking -- you don't have to answer me now -- >> yeah. >> but for the record, if you could supply that. i'd like to see a comparison of how tax policy, grant policy, regulatory policy affects the two forks of the solution. >> i can provide you that, but let me just say that it's really difficult to know all the benefits and to put that in the avoided cost number. we know the avoided cost of building a filtration plant is the cost of that filtration plant that you don't have to build -- >> i understand. >> but to value the non-market values of recreation and carbon sequestration and all those ore

non-market -- other non-market values, there's really not an easy way to do that. and if we don't count those costs, then we're underestimating the benefits. so i will get you that analysis. >> thank you, appreciate it. thank you, mr. chairman. >> we'll now turn to the man who has more lakes than constituents in his state -- [laughter] senator franken. >> no, we actually have more, i have more constituents. [laughter] it's called the land of 10,000 lakes, we have 14,000 lakes, and i have about 5.5 million constituents. >> that's why i'ming a politician. math is not my game. >> yes. well, let's talk science. which i believe involves math sometimes. scientists project that by the end of the century, the western united states will face higher temperatures coupled with more intense droughts.

in the midwest we will face weather events and resulting flooding. as a result, we need to prepare for these changes by adapting or modifying our infrastructure including our dams and levees. ms. zane, you've been working to manage water infrastructure during both droughts and flooding in the past few years. what can the federal government do to help communities prepare water infrastructure for a changing climate? >> [inaudible] you have to invest in technology. it's that, pure and simple. without the technology you're not going to have more accurate forecasting. we are basically using a midwestern -- no offense to the midwest, but you have more thunderstorms there. we're using that technology to give us our forecasts on the west coast.

the problem is, is that you have radar at a certain elevation, and the atmospheric rivers come well underneath that elevation, and it's not being detected. if we invested in technology today, we would be able to know four days, five days in advance when those atmospheric rivers hit. you know, we literally lived in a state of emergency throughout the winter time because the russian river crested over three times, and we had to evacuate literally thousands of people and animals. we got a $6 million fema grant to repair our roads, and we're putting another $4 million into the general fund. and that, to me, is wasted dollars because if we could better prepare for these floods and keep that wart -- water in our reservoir. and we have a $6 billion agricultural economy in sonoma county, and our fish are coming

back in terms of our endangered species. but if we had that technology today, i believe we could do such a better job and not waste one dollar or one drop of federal funding when it comes to those emergency disasters. so i couldn't be more disappointed that technology and research was cut in this recent budget. i think it is the wrong way to go, and i think -- i agree with senator king, it's got to be technology and data that is the foundation for all good policies. >> i'm concerned about a lot of the cuts that are are being made, noaa, of course, and in all kinds of -- this committee is just -- [laughter] i mean, the whole energy committee we're talking about less investment on energy efficiency, energy, renewable

energy, that sort of thing. ms. sheils, welcome. i love maine, my wife's from maine. in your testimony, you highlight the importance of green infrastructure and rebuilding natural systems like wetlands as a cost effective way to protect water by avoiding more expensive forms of traditional infrastructure projects. we just had, i just had the commanding general of the army corps of engineers in because we were, they dredge mississippi a lot to keep the channels open for shipping. and that's absolutely important. and we have a situation where they dredge material. they don't know what -- they're at a point where they're going to have to dump it on somebody's farm, you know? one thing you talked about were,

you know, creating wetlands. and he's hoping that he can find that solution. so can you talk about these types of green infrastructure projects and how they can be beneficial especially this light of a change -- in light of a changing climate. >> right. yes, definitely. more extreme weather events up and down the east coast, it's affecting communities tremendously. and protecting the wetlands that are already in place is the least -- the most cost effective way to manage floodwaters on the coast. >> uh-huh. >> restoring wetlands is another way to do that. and then the last thing is creating wetlands, like you were talking about. and that can also be cost effective as opposed to the flood damage that you can get if you don't have that natural system to absorb the waters. i talked about vermont9 --

vermont and how hurricane irene hit vermont so hard, and wetland got all these damages because it's basically impervious surfaces. downstream from that where there was this enormous wetland, conserved wetland, the flows were much less, and and damages were much less as well. so we have to just weigh the costs and the benefits we get from preserving these natural areas that will always be cheaper than to deal with the consequences. >> and it's, you know, there's significant conservation benefits mediating fish and wildlife habitat and reestablishing local species -- >> not only environmental, but also social benefits and economic benefits at the same time. >> you're nodding a lot, ms. zane. why? >> well, because we've been spending the last nine years

with the corps of engineers and our private landowners basically implementing a biological opinion. we have yet to be sued. we've worked really well with our landowners, and we are seeing great restoration in terms of some of our endangered species. fish in particular. i grew up with a furbing pole in my -- fishing pole in my hand and fished all over the west with my father. so, you know, we will often say the sonoma county water agency if our fish are healthy, our water supply and quality is healthy. so we really use that as a measuring stick. and i would invite you all to come occupant and take a look at -- come out and take a look at some of those restoration projects along the tributary of the russian river, which is dry creek. they're quite incredible. some of the best wines you'll ever drink, those people who own

that property are making those wines, and they are working hand in hand with us as well as the corps to implement that biological opinion. >> well, thank you. i'm over my time, but sonoma is just unbelievably beautiful, as is maine -- >> yeah. >> arizona is gorgeous. where are the rest of you from? i forgot. [laughter] i'm sure, beautiful. beautiful country. we should be very proud of. and thank you for working on our water infrastructure. >> thank you. >> thank you, senator franken. mr. riva, you talk about desal salinization. i've taken a couple of survival trips where the only water i could drink is what i used a manual desal nateer for, and i know it takes a lot of time to produce enough water and a lot of pressure with a little manual

tool, for sure. so the big issue is power use. i assume that's a big cost. tell me, with california producing a lot of intermittent power, particularly with solar, does that provide benefits and opportunities for desalinization where you can pick the times that you actually use the hardware. tell me about power and intermittent use and how that's aiding or helping your industry. >> thank you. no in, power is a major component of the cost structure of desal nateed water. so, for instance, for every gallon of water that we produce, rough hi half of it represents -- roughly half of it represents capital, a quarter represents operating costs that are non-power and another quarter represents the cost of power. over the course of the last decade, the amount that

percentage of power in the overall cost has been declining as there have been a lot of technology innovations starting with the improvement in filters, improvement this different energy recovery systems and the like. but in terms of where we get that power from, in the first instance -- well, let me back up. as poseidon, we feel strongly we need to find ways to maximize the use of renewable energy in order to address the power supply. there are limits that we can do actually on site because there's just not enough room to put a massive solar or wind array in order to do that. but we will do some. we'll do rooftop solar where we can. what we would like to do is to be able to access some of the renewable energy that's being produced remotely, say in the desert areas in california, and find ways to bring it to the the site.

that's currently not possible for us under california law, but it's something that a number of people are working on, direct access. and then finally, the issue that you raised which is the ability to take low-cost power or where there's an excess of power and then alter your operating mode in order the accommodate that, that's another potential area which we're looking at. in our carlsbad unit, there's less potential to do that in other, say, a new build like a project we're building in huntington beach where there's much larger water storage. and that's really the issue. if you have more capacity to store, then you can produce more in off-peak and cut back in on-peak. this is active work for us in working with the california electricity commissions, because there is really a power/water nexus that is important to understand.

>> okay. as i -- between the hours of 11 and 2 p.m. every day, california's pushing no-cost power -- >> right. >> -- down the eastern grid to arizona and talked about how that could be used in terms of pumping. you know, the biggest single water user in arizona is the central arizona project to pump water. and if that can be done at times when intermittent power is cheaper, then it certainly helps out. >> right. mr. buschatzke, we talked a lot about the colorado river and making sure that through, you know, with regard to storage and water banking and wheeling, one thing we really haven't talked about is surface water in arizona and how that is utilized. talk about for a minute the importance of arizona's own watershed, our northern forest, for example, and how we can better utilize or make sure that

we're taking full advantage of every drop of rain that falls in arizona not necessarily in the upper basin and flowing through the colorado river. how important is that to arizona's water future, and what do we need to do? >> so, senator flake, our in-state supplies are critical. out of our seven million acre water budget, about 17% of that comes from the salt, veridian and hila live. the salt river itself, roosevelt dam is the main reservoir there. it has flick and shoal capacity dedicated to it. again, if we could use that capacity to store water in the summertime when it's very unlikely that we're winning to get any -- we're going to get any runoff events, it's highly variable, but we need to maximize every drop of water that we have from our in-state sources.

>> healthy forests with fewer trees, less choked, that's a better system to have, certainly, than what we experience now in the ponderosa pine forest. is that true? and how important is it to manage our forests? there are a lot of benefits, obviously, economic and otherwise. but in terms of water, is there an imperative to better manage our forests? >> senator flake, absolutely. we estimate that in pre-settlement days there were less than 50 trees per acre. that has grown now to over 1,000 trees per acre. so using a lot more water -- >> kind of like straws in the ground, isn't it? >> right. also creating a lot of fire danger. we've had the an increase in the number of acres burned over the last several decades there about 85,000 acres in the '80s to over two million acres in the 2000s. again, choking the runoff and the sediment that comes after

those fires, reducing our reservoir capacity, causing issues there. so the health of the forest is key. we do have a four forest restoration project underway. what we've seen is that we need to find ways to incentivize private industry to come in so that they can take advantage of those wood products so the restoration that's been underway so far has kind of been hampered by the fact that we can't create these industries to actually come in and use the wood products. and the costs of just doing the thinning without being able to market the wood products is prohibitive. we immediate to get private -- we need to get private industry in there. >> well, great. i just wanted to bring it back to the importance for water as well, because that's not talked about as much. senator king. >> first, i want to ask each of you as you leave, everybody always leaves a situation like this and says i wish i'd said this or i wish i'd made this

recommendation. be thinking about what we can do in federal policy to help in the areas that you're working on, whether it's tax policy, incentives, regulation. how, what are the things -- because that's our business here, is making laws. and to the extent you can provide some backup thoughts, white paper explanation, that would be very help. helpful. mr. riva, on desalinization, obviously, huge potential. i mean, gigantic oceans. what's the cost of a gallon of desalinized, of water created by desalinization versus a gallon that comes through a public water supply from traditional sources? >> i think it's fair to say that it's more expensive than existing water supply because

it's a new water supply -- >> my question is how much more expensive. is it twice as much, three times as much, four or five? >> it depends on the system, but it could be on the order of twice as much. >> okay. and -- >> but i think the reason for that is that the existing supplies have basically committed all of the existing inexpensive water. >> right. >> so then you're left with -- >> it's hard to beat free. comes out of the sky. >> well, that's right. or it's in a pond that requires minimal treatment or groundwater. but, and if that's available to you freely, then i think any community is going to go to that. but it's where you get beyond that whether for, because those supplies are diminishing or there are restrictions on them or because there's growth, population and the like, and conservation is obviously a critical part of that. but i think that for a healthy

system that's resilient to the type of events of climate and the like that senator franken was talking about, you need a diversified supply system. to me, resilience equals diversification, and i think desal is an important part, piece of that. it's not the silver bullet -- >> and will likely become more so as population pressure increases -- >> right. >> -- ask the amount of freshwater -- and the amount of freshwater remains constant. but that raises a question, i'm not quite sure who to address this too. the issue of cost. i have a friend who's a car dealer, and he tells me you can graph to a from e decision, when gas prices go down, he sells more trucks. when gas prices goes up, he sells more priuses. i mean, it's very clear. we haven't really talked about cost, and to the extent that there's going to be conservation , technology

invested in reuse, all of those things, don't those go back to what the cost of the commodity is and people will conserve more if it's more expensive, and there will be more creativity in terms of results? my friend from ge, you're nodding. is that an accurate perception? >> yeah, i would definitely agree with that point, senator king. >> if gasoline were 20 cents a gallon, we'd all be driving humvees -- >> well, you see that in the middle east with big cars. but it is clearly, and we see that where the price of water reflects more the real value of water, that's where you have more conservation activities, and that's where you have more new technology being applied to be able to reuse water and provide a different and broader mix of water sources, you know, the invest future needs. so i think you're absolutely right there. >> well, as supplies, as demand increases and supplies either

stay constant or dwindle, that's going to be a logical outcome, it would seem to me, just in terms of the market. and then we see more developments in -- we will see more developments in terms of conservation. i'm not advocating higher prices for water, but it seems to me that's an inevitability as we go to different technologies whether it's filters or desal salinization, dual systems in cities for drinkable water versus water used for other purposes. ms. zane? >> yeah, i want to get back to investing in technology too because we've got to understand what the weather's going to do if we're going to save water and conserve water -- >> i was going to ask you, would more storage be a partial answer here from when you have these storms so you can buffer, buffer the effect of the flood and also store the water for when it's dry? >> i don't think so. i think the storage has to be in the ground at this point. you know, california's the last

state in the western states to have any type of regulation in terms of groundwater. and we're just beginning to kick that off now. but i think the answer is that we need to find better innovative ways of storing our water in the ground. and at the same time, maximizing the reservoirs. and, you know, you asked what we would like to share with you. we would like to work with you to include projects like ours that do involve the corps and kind of emphasize that, you know, that those projects need to be implemented or initiated by the local water sponsors only. because i did a little research and found out the corps operates projects in all of your states. and so we'd like to be able to be included in some of the legislation that senator flake and risch and feinstein have

authored, which we really appreciate that legislation. so it's, again, i just want to stress technology and better science. i think we would have, save this country billions of dollars in emergency mitigation funds if we could figure out the technology in the forecasting. >> thank you all for your testimony. we have just a couple of minutes left in the vote that senator king and i have to run to. we've certainly had scheduling issues to get this hearing to come off, and we're pleased that we were able to do so today. i want to thank the witnesses more their testimony. we've -- for their testimony. we've really touched on some helpful issues here. last congress we were able to put together a drought bill that addressed many of the needs that we have, and i think between that bill and the testimony that we have heard today, we'll have the material to put together another water supply and drought bill that deals with a lot of the issues that we touched on today.

for the information of members, questions will be submitted for the record, must be submitted for the record before the close of business on thursday. the record will remain open for two weeks. we'd ask the witnesses to respond promptly if possible, and your responses will be made part of the record. with the thanks of the committee, this hearing stands adjourned. [inaudible conversations]

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[inaudible conversations] >> we're going now to the start of what is expected to be a two-hour discussion with reporters, congressional staffers and scholars at the national press club on relations between government officials and the press. communications directors for house speaker paul ryan, senator tom udall, former white house press secretary mike mccurry and former senate historian don richie among those participating. this is live coverage at national press club. >> good morning, thank you so much for being here today