Dr. Jeff Michael Tears Apart Blue Sky Tunnels Report:
Not Convincing, Not Very Reassuring, Misrepresented by Tunnels Backers, Fails to Count “Rate Stabilization Fund” Costs
Farmers Do Not Have Capacity To Pay For Tunnels & Make a Profit;
Conclusion: “Tunnels are not a doable deal”
Stockton, CA – Restore the Delta (RTD), opponents of Gov. Brown’s rush to build massive Tunnels that would drain the Delta and doom salmon and other Pacific fisheries, today noted Dr. Jeff Michael, of the University of the Pacific’s Business Forecasting Center, has torn apart a State-sponsored Report on Affordability and Financing for the Bay Delta Conservation Plan (BDCP). “The Brown Administration plans to stick families and businesses with the bill for water to mega-growers to export almonds and pistachios,” said RTD Executive Director Barbara Barrigan-Parrilla. “Independent, unbiased analysis shows that – contrary to state-sponsored incomplete and biased reports by paid consultants – farmers will NOT be able to pay for the tunnels and make a profit.”
Dr. Michael finds three key problems in the report.
- The costs per acre-foot of water are too high, and the report fails to include the cost of a large rate stabilization fund that would be necessary.
- The capacity of farmers to pay is overestimated and the return on investment “implausibly low”
- Costs are likely underestimated, relying on optimistic assumptions about ratings and bond covenants.
“The tunnels are really only affordable if property taxpayers who get no benefit are on the hook to pay for them,” said Barrigan-Parrilla. “Farmers can’t pay $300 an acre-foot for Tunnels water. It’s time for the governor to abandon this collapsing project.”
The Valley Economy blog is here.
FOR IMMEDIATE RELEASE: Wednesday, February 4, 2015
Contact: Steve Hopcraft 916/457-5546; [email protected]; Twitter: @shopcraft; Barbara Barrigan-Parrilla 209/479-2053 [email protected]; Twitter: @RestoretheDelta