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Metropolitan Water District Documents Show Questionable Analysis to Justify Desired Outcome of Phased-In Delta Tunnel Analysis: Response from University of the Pacific’s Dr. Jeff Michael and Restore the Delta’s Barbara Barrigan-Parrilla

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STOCKTON, CA – Documents acquired by Restore the Delta from a recent a public records act request to Metropolitan Water District of Southern California (MWD) confirm that MWD and the State Water Contractors (SWC) collaborated to rework an unfavorable draft of the economic analysis report released recently to the public for the phased-in approach to construction of the Delta tunnels. According to a recently authored response by Dr. Jeff Michael, Director of the Center for Business and Policy Research at the University of the Pacific, to DWR’s current economic analysis for California WaterFix, the alterations made in the data used by MWD and the SWC delivered “highly biased modeling scenarios and assumptions to Dr. Sunding in order to boost the estimated water supply benefits of a single tunnel scenario.”

*All the documents contained in the PRA release can be read here. This link offers a catalogue by which to read through the 291 documents included in the release. Dr. Michael sent his response to the economic analysis to Restore the Delta for release as he is traveling with his family this week. Phone numbers have been redacted from these documents to protect the privacy of involved parties.

In addition, Restore the Delta discovered through the documents that:

1) Brattle Group Economist Dr. David Sunding, who prepared the state’s recent economic analysis for a phased-in tunnel approach, emailed MWD on October 19, 2017 to inform them that California Natural Resources Agency wanted to complete the new single tunnel analysis by December 2017. The request for a new analysis for an altered project was made over one month before the Department of Water Resources and opposing parties submitted their testimony to the State Water Resources Board for the second phase of permit hearings for the twin tunnel project.

2) MWD was working with the State on modeling a single tunnel project before the Department of Water Resources submitted its testimony to the State Water Resources Control Board.

3) A January 5, 2018 email from Dr. Sunding reports that he was not getting the assumed benefit results from modeling runs, with incremental yield for State Water Contractors at only 549,000 acre-feet (Doc No 45).

4) A January 9, 2018 email shows the response to Dr. Sunding’s findings was for Metropolitan Water District to use a “do nothing” integrated regional plan baseline to estimate water supply shortage numbers models for Dr. Sunding. This assumption creates a fake baseline that is contrary to Metropolitan Water District plans for regional water management. Moreover, this “do nothing” baseline is not disclosed in Dr. Sunding’s final economic analysis as an assumption for the phased-in tunnel approach. (Doc Nos 45-47).

5) In the February report, authored by Dr. Sunding, the incremental yields for State Water Contractors went up to 666,000 acre-feet showing that the alternative “do nothing” baseline, along with other changes to the baseline, increased the reported water yields by 21 percent for the economic analysis. (Doc No 82)

6) A January 30, 2018 email from MWD’s Tom Philp shows that State Water Contractors are requesting that Scenario 6 Fall Old Middle River environmental restrictions are added to the no-tunnel baseline. This appears to be the change that boosts the water yields by 21 percent to increase the benefits. Note that Tom Philp says lifting the restriction with the project is justified by assuming “successful adaptive management.” In other words, they as water contractors are counting on an adaptive management plan that will yield Southern California, instead of managing for the improvement of Delta fisheries. (Doc No 84)

7) A table entitled “Project Deliveries by Scenario” shows that MWD is still holding out hope for a participation project split between State Water Project Contractors and Central Valley Water Project Contractors. MWD continues to identify CVP users as buying 17 percent of the water that would be conveyed with a single tunnel, even though none of these contractors have committed to funding the project. (Doc No 104)

8) An email from Jeff Kightlinger affirms that MWD is counting on the tunnels being operated during dry years to maximize water exports for MWD, even though it is precisely during these periods that the Delta needs fresh water flows to protect fisheries and to stop saltwater intrusion into Delta drinking and irrigation water supplies. (Doc No 272)

9) MWD is considering infrastructure funding from the Trump Administration in the form WIFIA loans. Discussion of these loans, most often associated with public-private partnerships (P3’s), were relabeled in a staff presentation made to the MWD Board of Directors regarding California WaterFix last month, as low interest Federal loans that are 200 basis points below market value, and that could be used to finance 50 to 100 percent of California WaterFix. The emails do not indicate, however, if MWD has dropped the pursuit of WIFIA loans to create a public-private partnership through its planned finance joint powers authority for the project, or if this relabeling of the loan type was to further obfuscate public understanding behind the proposed finance plan. (Doc Nos 82-84)

Restore the Delta’s executive director Barbara Barrigan-Parrilla said in response to the documents,
“The degree to which MWD is playing fast and loose with assumptions, baselines, and planning for the Delta tunnels is astonishing. While we expect a regional water district to put its own interests first, the terms under which it is planning the Delta’s future, with the full support of the Brown Administration, feels almost fraudulent. This scenario also exemplifies why MWD cannot be allowed to run the finance joint powers authority for California WaterFix or manage the proposed adaptive management program. From manipulating access to testimony for project protestants at the State Water Resources Control Board, to using faulty assumptions to project maximized water exports to gain support from their Board of Directors, to pursuing favorable loan conditions with the Trump Administration for a project that is not permitted and is only 10 percent designed, senior management at MWD is focused on gaming government processes to push this project on Californians. They are aided in this pursuit by officials at the Department of Water Resources. The madness needs to stop. It’s time for Californians to speak with each and every elected official and candidate in California about why the project must be stopped, and why the relationship between Metropolitan Water District and the Department of Water Resources must be reigned in by the legislature.”

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For immediate release: 3/26/18
Contact:
Nora Kovaleski, 408-806-6470, [email protected]
Barbara Barrigan-Parrilla, Restore the Delta, 209-479-2053, [email protected]

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