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Unpacking Real Costs of California WaterFix

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For Immediate Release: September 29, 2017
Contact:
Nora Kovaleski, 408-806-6470, [email protected]
Barbara Barrigan-Parrilla, Restore the Delta, 209-479-2053

 

Press Release
Unpacking Real Costs of California WaterFix

 
Stockton, CA — Delta tunnels opposition researchers have discovered a draft analysis dated September 15, 2017 of CA WaterFix costs completed by the Kern County Water Agency posted at the Wheeler Ridge-Maricopa Water Storage District.
 
This recent Kern County analysis provides a comprehensive review of how expensive the Delta tunnels project would be for Kern County farmers, and elucidates more realistic cost numbers for State Water Project Contractors than those touted by Metropolitan Water District. (You can also read the document at Restore the Delta’s website.)
 
Researchers found that:

• Total WaterFix costs are estimated at $32.1 billion to $41.4 billion over 50 years; however, Kern County Water Agency only looked at interest rates of 3.55% or 3.88%. Higher interest rates would result in significantly higher total costs. These costs do not include potential cost overruns. (Page 72).

• Computations in 2033 dollars show that dividing the maximum capital costs by the average water supply yield results in an estimated cost range of $888 per acre-foot of water to $1427 per acre-foot of water for Kern County Water Agency water users. Using 2017 dollars, the price is discounted to $553 to $889 per acre-foot. (Page 76).

• Kern’s total costs range from $4.9B to $7B, and annual costs range from $153.9M to $247.5M (page 73)

 
Restore the Delta executive director Barbara Barrigan-Parrilla noted,
“Water this costly would cut deeply into profit margins for smaller farms within the Kern County Water Agency service area, and even the profits of big industrial farms like Stewart Resnick’s Paramount Farms. It is feasible that the real end-goal is for urban ratepayers within the Kern service area and Metropolitan Water District to subsidize the project, or that Kern County Water Agency could resell a portion of water back to Metropolitan Water District to make enough revenue to cover bond repayment.”
 
Prior to Westlands Water District’s withdrawal from California WaterFix, Kern County Water Agency projected that their cost share would be 24.23% of the State Water Project’s 55% share, or 13.33% of the total costs. (Page 71).
 
Barrigan-Parrilla added,
“It will be worth noting in the weeks ahead if KWCA will redo the math minus the Central Valley Project contribution of 45% to total costs, or if they will pretend that nothing has changed. It seems unlikely to us that farmers, who are businessmen first, would ignore this significant change in contribution percentages in the same way that Metropolitan Water District staff failed to acknowledge the loss of 45% of total project funding in their workshop to their Board of Directors on September 26, 2017. (All available workshop materials and presentations can be found here.) For farmers, such calculations are necessary to determine their bottom line.”
 
Prior to Westlands September 19th vote, KCWA estimated their total contribution to fall within a cost range of $4.9 to $7 billion, about double the $4 billion number (in 2017 dollars) that MWD continues to state publicly, even though KCWA would receive about half the amount of water that MWD would receive. (Page 73).
 
Barrigan-Parrilla concluded,
“WaterFix does not pencil out for agriculture without a huge taxpayer subsidy from the State or Federal Government, and increased contributions from Metropolitan Water District and Silicon Valley water rateypayers.”
 




Leave a Comment

{ 3 comments… add one }
  • Stephen Monismith
    October 2, 2017, 8:22 am

    It looks like the ca. $1000/AF price represents the one-time cost of building the tunnels, and not the annual per AF cost. Is that correct? Probably best to check with Jeff Michaels at U. Pacific to see what the likely real annual cost would be.

  • Richard Allen
    October 12, 2017, 3:41 pm

    I think it might be a little tricky to pencil out water politics and fraud.

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