In an otherwise upbeat speech today about the future of water supplies in the West, Interior Secretary Bruce Babbitt sternly warned Southern California's water-rich Imperial Valley to reduce its usage or face federal action.

"I believe the time has come for me as the River Master {of the Colorado River} to play a more active role," Babbitt told a convention of the Colorado River Water Users Association, officials from seven states that depend on the 1,400-mile-long river.

Babbitt praised California's overall efforts to reduce its draw but singled out for criticism the Imperial Irrigation District, the largest user of Colorado River water, citing it for how much water it uses and how it uses it.

Babbitt also announced plans for the first rules for interstate transfers of Colorado River water. In the first transfer, Nevada would pay Arizona to store some of its water for future use.

He also said the time has come for federal action on California's Salton Sea, which suffers from high salinity, toxicity and dying fish and birds. Although he offered no specifics, Babbitt toured the troubled area this afternoon.

On the issue of Imperial Valley, Babbitt said he will not approve a historic sale of its water to San Diego unless the Imperial Irrigation District, along with two smaller neighboring agricultural water districts, limits its demand on the Colorado River. If no limitation agreement can be reached, Babbitt said, he is prepared to impose limits on the three agricultural districts.

Although delivered in measured tones, Babbitt's comments constitute fighting words in the Imperial Valley, where the farmers are the children and grandchildren of pioneers who turned the valley from a desert wasteland into an agricultural bounty. They have zealously protected their water rights with guns, lawyers and political muscle.

"We are disappointed that the secretary does not seem to understand our situation as well as we would like," said Michael Clinton, general manager of the Imperial Irrigation District. "He said in his speech that he wanted to make sure no entitlement holder on the river is disadvantaged. As the oldest and largest entitlement holder, we feel it is the secretary's duty to see that we are not disadvantaged."

California now gets 70 percent of its water from the Colorado River, and Babbitt has been pressuring the state to reduce its reliance on the river through conservation.

In the past, the farmers of Imperial Valley have fought to the Supreme Court to protect their water rights.

But Babbitt said he is hopeful that Imperial Valley will accept limits on its Colorado River draw as a trade-off for getting his approval for the lucrative agreement to sell between 130,000 and 300,000 acre-feet annually of its Colorado River entitlement to San Diego. CAPTION: BRUCE BABBITT