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Incomplete Cost-Benefit Analysis on Phased Delta Tunnels Focuses on Project Beneficiaries Instead of Statewide Impacts

STOCKTON – Environmental and public interest nonprofit Restore the Delta thoroughly examined the state’s recently released cost-benefit analysis of the newest phased-in version of the Delta Tunnels project.
The study by UC Berkeley Economist David Sunding, was released this Tuesday to justify construction of a single tunnel even though the Department of Water Resources continues to plan for a second tunnel, as evidenced by their continued fight at the State Water Resources Control Board for the water right needed to build and operate a two tunnels project.
Restore the Delta policy analyst Tim Stroshane said that the study ignores the majority of Californians by only examining benefits for State Water Project contractors. Among other costs, it fails to factor in economic, environmental, and cultural losses for San Francisco Bay-Delta residents, San Joaquin Valley agricultural communities, and Northern California tribes resulting from Tunnels construction and operation in the Delta.
Upon reviewing the state’s cost-benefit analysis, Policy Analyst for Restore the Delta, Tim Stroshane noted,
“This present analysis continues DWR’s and Sunding’s practice of focusing solely on benefits from the Tunnels to state and some federal water contractors to the exclusion of costs the project would impose on the Delta as well as the rest of California. Specifically, Sunding’s method does not examine losses to Delta agriculture, tourism, and jobs. University of the Pacific Economist Dr. Jeff Michael included these costs in his 2016 analysis of the two tunnels project, which Restore the Delta used during their Part 2 testimony, comparing Dr. Michael’s 2016 study to Sunding’s 2015 study that found subsidies would be needed for the project to service agricultural ratepayers.”
Executive Director of Restore the Delta, Barbara Barrigan-Parrilla said,
“Ironically, General Manager of Metropolitan Water District Jeff Kightlinger made a statement likening Los Angeles’s water supply challenges to the drought crisis in Cape Town, South Africa, to promote the tunnels. In addition to being an inaccurate comparison, his thought ignores the fact that the tunnels project positions Delta communities as sacrifice zones during construction and operation of the tunnels.
“Sunding’s flawed economic analysis suffers from this same type of logic, or lack thereof. The study doesn’t look at the economic damage done to the rest of the state as a result of unsustainable water transfers that the Delta tunnels will facilitate. Plus, MWD continues to under-fund its own conservation programs, while placing the financial burden on ratepayers to contribute $5-6 billion to a project that benefits agricultural districts that do not want to pay for WaterFix. Moreover, MWD has a history of behind-schedule, over-budget projects, such as the $1.2 billion Inland Feeder tunnels, meaning Southern Californians will face increased water rates as the project faces delays, climate change obstacles, and poor planning known as “adaptive management.”
Investments in the Delta can be made without the tunnels to secure a continued share of sustainable water yield from the Delta. But keep in mind that all California watersheds will decrease in volume with extended drought from climate change, meaning there will be fewer opportunities to transfer water from Northern California to Southern California. It makes more sense for Metropolitan Water District to instead invest its $5-$6 billion in local solutions to capture and reuse every drop of water locally. Robbing Peter, Northern California watersheds, to pay Paul, Metropolitan Water District, is not a climate-resilient water management strategy. The tunnels will become a sunk cost for Metropolitan Water District, and their ratepayers will be stuck with the bill.”
For immediate release: 2/16/18

Nora Kovaleski, 408-806-6470, [email protected]
Barbara Barrigan-Parrilla, Restore the Delta, 209-479-2053, [email protected]

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