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In case you missed it… Dr. Jeff Michael’s Valley Economy Blog Post: Urban Water Agency Op-eds Follow the Same Script

For Immediate Release: Tuesday, January 8, 2013

Contact: Steve Hopcraft 916/457-5546; [email protected]Twitter: @shopcraft

Barbara Barrigan-Parrilla 209/479-2053 [email protected]; Twitter: @RestoretheDelta

In case you missed it…

Valley Economy Blog

Urban Water Agency Op-eds Follow the Same Script

By Dr. Jeff Michael’s Valley Economy Blog, Originally Published 10/1/12 Emphasis added

For the past two months, there has been a steady flow of op-eds from urban water agency leaders that follow roughly the same script. This one from San Bernardino caught my eye this morning and is typical.  It piles the fragile levees argument on extra thick, but at least spares us the “one state” line that appears in most of them. But what really gets my attention is that they are all giving very consistent numbers for the ratepayer costs.

Construction of the new conveyance system is expected to be under way by 2017 at a cost of $12 billion to $14 billion, with another $9 billion needed for eco-system restoration. That amounts to a cost of $1 per person or about $4 to $5 per household per month over the anticipated life of the project.

The simple math, 25 million people times $1 month ($12 year) is $300 million per year, maybe $400 million factoring in some population growth and rounding up. This is compared to the estimated annual debt service and operating costs of the facility is $1.2 billion. That means that the urban agencies expect the portion of the state’s agriculture industry that uses Delta water to pay $800-$900 million annually.  Is that affordable or in the best economic interests of agriculture?  I highly doubt it.

The urban water agencies are being dishonest with their ratepayers in multiple ways:

1. They aren’t telling their customers that they are counting on agriculture to finance the vast majority of the conveyance project, and that there are serious risks for their water rates and/or taxes in the very probable case that agriculture can’t pay that much.

2. They are leaving out the “$9 billion” ecosystem cost that will also be largely paid for by their ratepayers, although through their taxes not their water rates. They should say the plan also depends on $9 billion in ecosystem costs paid for with their tax dollars, crowding out investments in local schools, health and welfare programs, or requiring a general tax increase.  Divide that $9 billion by roughly 40 million Californians and you get $225 per capita, about $700 per household.

3. They say nothing about alternatives and comparative costs.  There is a strong case that a combination of Delta levee upgrades, local water supplies, conservation and recycling will be less expensive, more resilient to droughts (the biggest reliability threat), save lives and protect critical statewide transportation and energy infrastructure, and create jobs across the state, including southern California.

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