Newsom’s big water deal is in trouble | Edit ShortsCars

By Camille von Kaenel

Presented by Megafire Action

With help from Alex Nieves and Riley Ramirez

Gavin Newsom's signature water deal has problems. | Rich Pedroncelli/AP

THE DEAL IS SPRINGING A LEAK: Gov. Gavin Newsom’s signature water deal is starting to unravel just months before he leaves office.

The governor’s plan sought to direct billions of state, federal and water district dollars toward restoring the sensitive Bay-Delta ecosystem while providing farms and cities with more flexible access to the water. Now, two of its most important partners, the federal government and Westlands Water District, the largest irrigation district in the Central Valley, are threatening to walk away.

This development puts Newsom in a bind as he tries to cement a water legacy built around making California’s water supply more reliable — an agenda that has occasionally put him on the same side as the Trump administration.

The governor has long pressed the State Water Resources Control Board to adopt the plan, which is based on a deal he struck with California water agencies in 2022. The basic bargain was simple: Water agencies would provide more money for fish and habitat restoration in the Bay-Delta in exchange for a more collaborative alternative to the state’s existing strict rules that limit how much water they can pull from the region for farms and cities.

But changes regulators made to the plan in August, including giving the state more oversight over water operations, have water agencies and their allies calling foul.

Central Valley GOP Reps. Vince Fong and David Valadao are calling the regulators’ latest changes a “bait and switch,” and the Trump administration said it won’t participate in or fund the program if state regulators move ahead with the latest draft.

Bureau of Reclamation Principal Deputy Commissioner Aubrey Bettencourt said the new version of the plan “disregards federal law, undermines negotiated certainty, and threatens the viability” of federal water operations in a letter last week. Westlands Water District, one of the Central Valley’s most powerful irrigation agencies, followed up by saying it will also end its participation unless the state reverses course.

Even the water agencies that have not yet explicitly threatened to pull out of the deal are warning that they’re not happy.

Jennifer Pierre, general manager of the State Water Contractors, which represents the 27 agencies that get water from the state government, said the group has identified “very concerning components” and hopes they can be resolved before it is in a position to “enthusiastically support” the final plan. “This is different than what we proposed, so we're trying to get to a place where it's workable,” she said in an interview.

Newsom’s top water officials have acknowledged the conflict but are still projecting confidence. “Details matter, so I do think it will be important for the Water Board to consider these public comments,” Natural Resources Secretary Wade Crowfoot said in an interview. But he was not “overly concerned,” he said, because talks between the Newsom and Trump administrations had not yet completely broken down, and there had been “constructive” discussions on a possible resolution.

Crowfoot said he remained “laser-focused” on getting the plan approved by the Water Board by the end of Newsom’s term.

“We have a strong plan moving forward, and we’re staying the course,” he said. “Having worked in California water for 20 years at this point, I'm convinced that this more comprehensive approach is better for water users and the environment.”

Environmentalists have always opposed Newsom’s plan out of concern it could harm sensitive ecosystems and generally prefer strict rules that determine how much water must flow down the rivers at key times to keep endangered species healthy.

Now, Barry Nelson, a policy adviser with the advocacy nonprofit Golden State Salmon Association, says the latest threats expose a deeper problem: that Newsom’s deal won’t work. The governor’s original deal planned for about $2.9 billion in funding over its first eight years, including roughly $1.4 billion from the state. But the funding and overall success partly depends on participation from the agencies and governments that signed on.

“We’re talking about the risk of the public providing billions of dollars for a program that is just a sham,” Nelson said.

The Water Board is scheduled to vote on the plan Oct. 28 and 29. Spokesperson Jackie Carpenter said the Board could still propose additional changes to the plan after a Sept. 18 deadline for written comments or in response to oral comments at its October meeting.

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Sam Altman wants power companies to trust him. | Jose Luis Magana/AP

LEARN FROM EXPERIENCE: OpenAI is pitching power companies that it can help protect their grids against cyberattacks — like the one it unwittingly committed.

CEO Sam Altman has been briefing electric utility executives since July 20 on OpenAI’s Daybreak, a $1 billion cybersecurity initiative to patch vulnerabilities in critical systems like power grids, Aaron Mak reports for POLITICO.

Those meetings began before OpenAI disclosed that its own rogue AI agents had carried out a seven-day attack on Hugging Face, an artificial intelligence platform. In more recent meetings, including a briefing with Southern California Edison last week, Altman’s team also discussed the risks posed by these kinds of autonomous hacks.

Southern California Edison did not respond to requests for comment.

KEEPING THE EMBERS ALIVE: Newsom on Thursday declined — again — to say whether he would call a special session of the Legislature to address the topic of power companies’ wildfire liability after his compromise deal collapsed earlier this month.

But the governor said at a press conference that he’s continuing to work on the issue, including in meetings with key players this week. “There's been a number of productive meetings, so we'll play it out by ear,” he said. “It’s a real issue, and it's one that I hope we can tackle together, and if not, it will, I assure you, be one of the first agenda items in the new administration,” he added.

SPEAKING OF WILDFIRE: It’s not just California.

States west of the Mississippi considered more legislation related to wildfires and utilities in 2025 than they had during the previous 10 years combined, according to a new policy tracker from the Smart Electric Power Alliance and the Department of Energy’s Pacific Northwest National Laboratory.

The map shows which states have passed certain policies, like dividing up costs between insurance companies, taxpayers and power companies, or changing how electric utilities pay for wildfire upgrades. Map and policy wonks, rejoice.

Spencer Cox on America’s political divide

In the latest episode of On the Road, Jonathan Martin sits down with Utah Gov. Spencer Cox to discuss his new book, Off Ramp, the future of the Republican Party, immigration reform and what he says it will take to rebuild trust and community in American life.

Watch now.

Rob Bonta is trying to defend climate science from President Donald Trump. | Pool photo by Alicia Ramirez

SCIENCE WARS: Attorney General Rob Bonta and a multistate coalition of attorneys general are blasting the Trump administration’s proposed changes last month to a major recent scientific study of climate change.

In a letter Wednesday, Bonta and the other attorneys general said the Trump administration’s proposed changes to the 2023 National Climate Assessment are a “rushed, procedurally flawed and politically motivated” attempt by the Trump administration to discredit and downplay scientific findings. The changes would limit federal agencies from using certain worst-case, high-emission scenarios laid out in the study in their policies.

In a press release, Bonta said that restricting federal agencies from acknowledging or planning for the impact of climate change is “playing politics with people’s lives.” He urged the federal government to rescind its changes and support rigorous, peer-reviewed scientific findings.

The state of California, meanwhile, is planning on releasing its own climate change assessment this fall.

CHARGING UP: Henrik Holland has been named the new president of EV Realty, a San Francisco-based company that builds large electric vehicle charging hubs for commercial fleets. Holland previously served as an executive at Shell and Prologis Mobility, the nation’s second-largest commercial EV charging network. He’s also the board chair for CALSTART, a nonprofit focused on clean transportation development.

Where energy, tech and policy connect

POLITICO Surge helps readers follow the policy and political forces behind data center growth, rising electricity demand, infrastructure pressure and the energy transition.

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— A trade organization’s leaked internal memos expose a coordinated push to dismantle California’s single-use plastic law.

— U.S. and Mexican officials announced a Colorado River water-sharing deal that calls for Mexico to cut more than 100,000 Olympic swimming pools’ worth of water in both 2027 and 2028.

— San Francisco Supervisor Shamann Walton plans to propose a 45-day moratorium on new data center construction.

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Alexia Underwood @underwood_AD Noah Baustin @NoahBaustin Alex Nieves @alexdrnieves Camille von Kaenel @cvonka

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