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Water Supply Contract Extension Program

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State Water Project Analysis Office
Department of Water Resources

1416 9th Street, Room 1620
Sacramento, CA 95814

Mailing Address:
P. O. Box 942836
Sacramento, CA 94236

water contract extension
California Aqueduct

California Aqueduct

Program Background and Purpose

The State of California entered into long-term water supply contracts (Contracts) with water agencies in the 1960s. Under the contract terms, the Department of Water Resources provides water service to these public agencies, known as State Water Project Contractors, from the State Water Project (SWP) in exchange for payments that will recoup all costs associated with providing this water service over the life of the SWP. The majority of the capital costs associated with the development and maintenance of the SWP is financed using revenue bonds. These bonds have historically been sold with 30-year terms, but such bonds have not been sold with maturity dates that extend beyond the year 2035, the year the contracts begin to expire.

With each passing year it becomes more challenging to affordably finance SWP capital expenditures because bonds used to finance these expenditures are limited to terms that only extend to the year 2035, far less than 30 years from today. In order to ensure continued debt service affordability to SWP Contractors, it is necessary to extend the Contract termination date. Contract extensions will allow DWR to again sell bonds with 30-year terms or longer, commensurate with the economic life of the project being financed, thus ensuring the debt service on these bonds remains affordable to SWP Contractors and their water customers.

Program Mission

Extend the term and amend the State Water Project contracts by conducting negotiations between DWR and the SWP Contractors, in a public forum, to ensure continued water supply affordability while complying with obligations under the California Environmental Quality Act and the Monterey Settlement Agreement.


DWR released the draft Environmental Impact Report (DEIR) on August 17, 2016, and the public comment period closed October 17, 2016. DWR held a public hearing for the DEIR on September 12, 2016, at the Tsakopoulos Library Galleria in Sacramento, California. A copy of the DEIR, information about how to make public comments and additional information about the proposed project can be found on this website.


Contact Information

Ted Alvarez, P.E.
Department of Water Resources
State Water Project Analysis Office
SWP Support Branch
1416 9th Street, Room 1620
Sacramento, California 95814
Phone: (916) 653-6271

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