State Auditor: DWR Forecasts Do Not Adequately Account for Climate Change

Dear Governor and Legislative Leaders:

As directed by the Joint Legislative Audit Committee, my office conducted an audit of the Department of Water Resources and the State Water Resources Control Board (SWRCB). Our assessment focused on DWR’s water supply forecasting and surface water management, and we determined that DWR has made only limited progress in accounting for the effects of climate change in its forecasts of the water supply and in its planning for the operation of the State Water Project. Until it makes more progress, DWR will be less prepared than it could be to effectively manage the State’s water resources in the face of more extreme climate conditions.

DWR is responsible for developing water supply forecasts that are important to both state and local efforts in managing California’s finite water resources. Despite acknowledging more than a decade ago that it needed to adopt a new forecasting method that better accounts for the effects of climate change, DWR has continued to rely heavily on historical climate data when developing its forecasts. In fact, in water year 2021, DWR significantly overestimated the State’s water supply—an error that DWR attributed to severe conditions due to climate change. DWR has since begun planning to adapt its forecasting model and associated procedures, but it could better ensure that it is using the best approach available if it adopted a formal process for evaluating the quality of its forecasts.

Large numbers of California’s residents and much of its agriculture depend on DWR’s effective management of the State Water Project. Although researchers project that climate change will significantly challenge the project’s operations, DWR has not developed a comprehensive, long-term plan for the State Water Project that meets best practices for proactively mitigating or responding to drought—particularly more frequent or more severe future droughts. Further, DWR has not maintained sufficient documentation to demonstrate that some releases it made from the Lake Oroville reservoir in water years 2021 and 2022 were appropriate in volume. DWR’s limited documentation in this key operating area impairs its capacity to demonstrate adequate stewardship of the State Water Project. Insufficient documentation also hinders DWR’s ability to effectively evaluate and, to the extent necessary, improve its management of the State Water Project to ensure the most efficient use of the State’s limited water supply.

Respectfully submitted,

GRANT PARKS
California State Auditor

FULL REPORT: https://www.auditor.ca.gov/reports/2022-106/index.html

Summary:

Climate change has had significant ramifications for the State’s water supply, and researchers project that its effects will increase in the future. Nonetheless, the Department of Water Resources (DWR) has been slow to account for the effects of climate change on key responsibilities related to managing the State’s water resources.

For example, one of DWR’s responsibilities is to develop water supply forecasts on which both state and local water agencies rely. However, DWR has not adequately ensured that its forecasts account for the effects of climate change. Similarly, it has not developed a comprehensive, long‑term plan for managing the State Water Project—a water storage and delivery system that collects surface water from the northern part of the State and delivers it to both the Bay Area and Southern California—during periods of more severe future drought. Addressing these issues will better prepare DWR to more effectively manage the State’s water resources in the face of increasingly extreme conditions.

DWR Has Not Adequately Ensured That Its Water Supply Forecasts Account for the Effects of Climate Change

In water year 2021, DWR significantly overestimated the State’s water supply. For example, in its February median forecasts, DWR projected that runoff would be at least twice the volume that actually occurred in the majority of watersheds for which it produces forecasts. Significant errors in DWR’s forecasts can affect state and local efforts to effectively manage the water supply, in part because of operational requirements tied to the forecasts. DWR attributed its error to the extreme conditions brought on by climate change. However, DWR has continued to rely heavily on historical climate data when developing its forecasts, despite its own acknowledgment more than a decade ago that its forecasting methods needed to better account for the effects of climate change. DWR’s limited progress in adopting a new forecasting model and related procedures stands in contrast to the efforts of other agencies we reviewed. Although those agencies’ specific forecasting models differ, each directly incorporates observed or modeled data that is relevant to climate change, such as temperature and soil moisture. Following the significant error in its water year 2021 forecasts, DWR developed a plan to make its forecasting more resilient to the effects of climate change, and DWR has entered into various contracts for technical assistance to improve its forecasts. However, if DWR also adopted a formal process for evaluating the quality of its own forecasts, it would be better positioned to ensure that it is using the best forecasting approach available.

---

DWR Must Do More to Prepare for the Impact of More Severe Droughts on the State Water Project’s Operations

DWR has not developed a long‑term plan for the State Water Project that aligns with best practices for proactively mitigating or responding to drought. In particular, although DWR has published strategies for responding to immediate conditions after droughts have begun, it has not developed comprehensive plans to respond to the effects that more severe future droughts may have on State Water Project operations. Such a plan could, for example, take into account the project’s ability to meet water quality and flow standards for the protection of wildlife in the face of more extreme conditions. In addition, DWR has not maintained sufficient documentation explaining how it decided that significant releases it made from its Lake Oroville reservoir in water years 2021 and 2022 were appropriate in scale. Improved recordkeeping would better position DWR to explain its decision making to water stakeholders and the general public as well as allow it to more consistently and reliably evaluate its release decisions and improve its future operations.

---

Agency Response

DWR generally disagrees with our report findings and recommendations. Specifically, DWR does not believe it has been slow to account for climate change in its forecasts, does not believe it lacks a comprehensive, long-term plan for responding to droughts, and does not believe it lacks sufficient records demonstrating the need for certain water releases from the State Water Project. Further, it believes many of our audit’s recommendations will add an additional layer of processes and procedures that it equates to “paperwork.”