Undaunted, Quinn tried again the next year. He began negotiating another round of options contracts, with a call date on April 1. But he added a new provision. "I learned in 2003 to put your call date really late," Quinn says, so he sweetened the new round of contracts: If farmers would hold on until May before Metropolitan decided whether to exercise its options, the agency would pay an additional $20 per acre-foot premium. "We offered them more money if they kept the call going longer," Quinn says. "That's valuable to you as the buyer, because it reduces the probability of your making a mistake."
With such adjustments, Quinn slowly stacked the odds in Met's favor. At the beginning of every "water year," which starts on Oct. 1, there is a 50-50 chance that Metropolitan will have enough water to meet its demands. The potential spread at the start of the year is huge: Met may need to store as much as a million acre-feet of excess water each year, or it may need to scare up a million acre-feet to cover shortfalls. It all depends on how much precipitation falls over the course of the winter. Only as summer approaches do water managers finally have a solid idea of how much water will really be available.
In early 2005, Met signed options for 125,000 acre-feet of water. But by February, after a relatively wet winter, there was only about a 10 percent chance Met would need it. "And then when April hit" - in a repeat of what had happened in 2003 - "the (supply) curve shifted up," Quinn says. "All of a sudden we had no (water) problem."
This time, Met let the options expire without exercising them. Although the agency lost the $1.25 million it paid for the options, that was just a fraction of the nearly $16 million it would have lost had it bought the water but not ultimately needed it.
"Some people say, 'Well, you wasted money - you paid the 10 bucks (per acre-foot),' " Quinn says, shrugging. "But it's like paying health insurance: Even if you don't get sick, you don't feel like you wasted the premiums you paid."
This summer, Quinn left Metropolitan for a new job just as the biggest crisis in years hit the agency. In June, the state shut down its Delta pumps for nine days to protect endangered Delta smelt, whose populations have plummeted in recent years. Then, in September, U.S. District Judge Oliver Wanger ordered the state to protect the smelt by throttling down the pumps from late December until June, when the fish spawn in the Delta. The restriction could reduce by up to a quarter the amount of water pumped out of the Delta.
Metropolitan kicked into crisis mode. The agency maintains an office on the ninth floor of The Senator Hotel, across the street from the state Capitol in Sacramento, and high-level Met managers have been on rotating deployments there throughout the fall. In October, the agency joined the list of supporters for a proposed ballot initiative that would approve a multibillion dollar project to route Sacramento River water around the Delta.
Exactly what form that project will take is, for the moment, unclear. But it could turn out to be a scaled-down version of the Peripheral Canal, which would protect Met's water supply - and, the project's supporters say, be paired with a substantial program to restore the smelt's habitat. (Despite that apparent reversal of its Boronkay-era decision not to seek new infrastructure, Met did, quite prominently, decline to support a competing measure that enjoys the spirited support of the farm lobby; it would authorize both a canal and two new dams.) Even if voters approve either of the measures - something that many capital veterans say is unlikely - it will be at least 15 years before an around-the-Delta canal is completed.
That has left Met scrambling to assess how vulnerable its water supplies will be next year. Metropolitan has significant quantities of water stashed around the state in its various storage projects. But as that water is drawn down, farm-water transfers will become critical. Deep within the agency's L.A. headquarters, its Water Surplus and Drought Management group - known in Metspeak by the pronunciation of its acronym, WSDM, as "the Wisdom group" - has been assessing whether Met needs to begin doing drought-rationing triage and lining up options contracts.
When the state shut down its Delta pumps in May, the WSDM group began calling in Met's chits. The agency immediately asked the Palo Verde farmers to fallow the maximum amount of land allowed under their contract. "We put them on notice," says Kightlinger, Met's general manager, "and we'll be going full-bore next year."
Meanwhile, in an office just past the reception area in the ninth-floor Sacramento office, Steve Hirsch has maps pinned on every available patch of wall. Hirsch is Met's program manager for water transfers and exchanges, and he has an order from WSDM to find and buy 200,000 to 250,000 acre-feet of water next year - 9 to 11 percent of Met's annual average deliveries.
Judge Wanger's ruling is forcing Hirsch into unexplored territory. In the past, when Metropolitan negotiated dry-year options with farmers, Hirsch says, "it's always been smarter to go north of Delta," in the Sacramento Valley, where water is cheaper. But Wanger's decision considerably complicates efforts to move water from the Sacramento River through the Delta and into the pumps.
Because of the pumping limits, Hirsch will have to thread his water transfers through needle's-eye windows of opportunity that may open at the pumps from next July through September. Only if next year is extremely dry will Met have any chance of getting water transfers across the Delta, through the State Water Project pumps and into the California Aqueduct.
That has left Hirsch pursuing a two-pronged strategy. In addition to buying options north of the Delta, he is making contacts with an entirely new set of irrigation districts, south of the Delta in the San Joaquin Valley. There, it's more likely that Met can actually take delivery of whatever water it buys - but the prices are higher, too.
Met is not the only agency seeking emergency water. Several San Francisco Bay Area urban water agencies will also see their supplies cut by Judge Wanger's ruling and are scouting out their own water-transfer deals. They will likely work cooperatively to find water. But at the end of September, the directors of the San Diego County Water Authority - a member of Met that has been increasingly insistent on lining up its own dedicated supplies - voted to seek a deal for 30,000 acre-feet from the Butte Water District in the Sacramento Valley.
The increased competition for water could drive prices up significantly. "If the prices get too high, we have the ability to say we'll sit out a year," Hirsch says. Metropolitan has enough water in storage that it could draw that down further to make up any shortfalls. "That's what we'll do if things get too crazy," Hirsch says, although he points out that such a tactic would result in less water in storage to cover shortfalls in future years.
In addition to the logistical challenges Met faces in the coming year, it will have to overcome some substantial lingering perceptual issues. "They've done a very good job of changing their approach and seeking cooperation," says Van Tenney, who retired from the Glenn-Colusa Irrigation District last year. But, he says, to many irrigation districts, "they're still suspect, even today. A lot of people in the north wouldn't give them the time of day."
In October, Hirsch did not seem particularly overwhelmed by the complex juggling act he'll be facing this winter. Still, he allowed, "this year's tough, because we're entering into a lot of new scenarios."
As evidence continues to mount that climate change will further reduce water supplies in California and throughout much of the West, Hirsch's tough new scenarios will likely become the norm for the entire region. It may not be long before Met's quiet, two-decade-long experiment in risk management proves useful to far more than the 18 million people whose faucets the agency will try to keep full next year.
Back in L.A., in his office on the 12th floor of Metropolitan's headquarters, Kightlinger says that the state's farms are as important to the agency now as they were in Carl Boronkay's day. "In those critical years, we need everything we can get hold of," he says. Then he circles back to the abiding question, "How do we make it work so we can both survive?"
The author is a contributing editor of High Country News.
This article was made possible with support from the William C. Kenney Watershed Protection Foundation and the Jay Kenney Foundation.