On February 13, 2023, Governor Newsom signed Executive Order N-3-23 (the "Order"), which aims to enhance water supply resilience in the state by: (1) directing the State Water Resources Control Board ("Board") to consider modifications to State Water Project ("SWP") and Central Valley Project ("CVP") water right permit conditions in order to enable additional water storage; (2) suspending compliance with the California Environmental Quality Act ("CEQA") for such approvals; and (3) continuing the Governor's CEQA exemption for groundwater recharge projects to the extent necessary to address drought impacts.

First, the Order provides that the Board shall consider modifying requirements for reservoir releases or diversion limitations in SWP and CVP project facilities to ensure there are adequate water supplies for purposes of health, safety, the environment, or drought resilient water supplies including "supplies both north and south of the Delta." As the state has experienced an extremely wet water year to-date, yet began the year with many reservoirs near all-time lows, pressure has grown to conserve stored water earlier in the year.

On the same day the Order was issued, the United States Bureau of Reclamation and the California Department of Water Resources filed Temporary Urgency Change Petitions with the Board seeking to modify water quality conditions for their water rights, including moving a salinity compliance point in the Delta known as "X2" farther east through March, would allow the projects to conserve up to 700,000 acre-feet of water in storage. The Order suspends CEQA compliance for Board approval of such actions.

The Order also continued prior Executive Order N-7-22, issued on March 28, 2022, which among other things suspended CEQA with respect to groundwater recharge projects to the extent necessary to address drought impacts.

Notably, the Order also directs state agencies to advise the Governor, no later than April 28, of recommendations for further actions necessary for drought response, including whether any existing provisions are no longer needed.