Kristen Castaños Discusses Wind Developer Impact of New California Groundwater Law

Partner Kristen Castaños authored an article in North American Windpower titled “Will Recent Groundwater Law Impact California Development?” The article discusses the implications of legislation enacted in September 2014 for developers and others who rely on groundwater to supply their projects.

According to Castaños, the new legislation makes no substantive changes to California’s existing groundwater rights system, which has provided for virtually unregulated use of water based on common law principles that provide a property owner the rights to use groundwater from under his property, followed by “appropriative” rights, which result from simply extracting and using the water. California has no statewide system for obtaining a permit or license for a groundwater right.

The new legislation “establishes a scheme for local regulation of groundwater to be implemented by local agencies with water supply, water management or land use responsibilities.” The agencies are expected to implement policies to sustainably manage groundwater resources, including developing groundwater sustainability plans (GSPs), which will include a 50-year planning horizon. The plans must include measurable objectives and milestones and can require groundwater users to comply with specific measures to protect groundwater supplies.

Uncertainties for developers and other groundwater users can arise from constraints on the use of groundwater that could result from the measures included in GSPs. The 2014 legislation also gives the local groundwater sustainability agencies the authority to charge fees for permits, groundwater extractions and related activities, which could substantially increase project costs.

Castaños points out that the wind industry may see favorable effects from the legislation, since it creates another hurdle for water-intensive energy development in California, one that wind projects won’t have to clear.