from ACWA
Submitted by Pamela Martineau on Wed, 05/29/2013
MILPITAS – State officials released a draft fiscal analysis of the Bay Delta Conservation Plan (BDCP) during a press conference in Silicon Valley Wednesday, revealing estimates that new conveyance facilities in the Sacramento-San Joaquin Delta could bring a $5 billion net benefit to the agricultural and urban water districts expected to pay for most of the project.
Brown Administration officials have been releasing chapters of an administrative draft of the plan in stages over the past few months. The plan’s final chapters 8 through 12 were released Wednesday at a press conference where leaders from business, labor and agricultural sectors joined water officials in stressing the importance of a reliable water supply to California’s economy.
Several speakers at the press conference stressed that doing nothing to improve water conveyance and the ecosystem of the Delta would leave the state vulnerable to natural disasters and unreliable flows that could threaten California’s water supply and economy. Many of the economic scenarios laid out in the plan compared the fiscal benefits of proposed Delta fixes to the costs of doing nothing to restore and strengthen the estuary.
“California’s current water supply system is clearly vulnerable to many threats, and the cost of its failure would be enormous,” California Natural Resources Secretary John Laird said. “As public officials we are duty bound to address these threats. This conservation plan provides the most comprehensive, well-conceived approach to ensuring a reliable water supply to 25 million people and restoring the Delta ecosystem.”
Laird and others stressed that the BDCP is not viewed by officials as the ultimate solution to the state’s water challenges. It is part of a multi-faceted approach that includes water conservation, recycling, integrated regional water management plans and targeted water transfers.
“Water conservation is one of our key strategies for meeting future water demands,” said Beau Goldie, chief executive officer of the Santa Clara Valley Water District.
“Yet with these efforts….the future still depends on imported water,” Goldie added.
The fiscal analysis states that the BDCP is a “beneficiary pays” project in which water users are expected to pay about 68% of the estimated $24.5 billion cost of constructing and operating the conveyance facility as well as its mitigation and adaptive management during its 50-year implementation period.
The remaining estimated $7.9 billion for the project’s habitat restoration, pollution control, and other measures to reduce ecological stress will be funded through a variety of programs, including federal and state financial participation that could include general obligation bonds in future years, according to a press release from the California Natural Resources Agency.
The report states that agricultural and urban water districts that will likely pay the bulk of the costs of the project would see a roughly $5 billion net benefit over the 50-year life of the project if the preferred alternative of twin tunnels that could convey 9,000 cfs of water is adopted. The benefits to water users include improvements in water supply reliability and water quality and reduced seismic risk to Delta supplies.
The report outlines the costs and benefits of the nine alternative projects being studied. It states that the estimated $10 billion cost of a 3,000 cfs alternative outweighs the estimated benefits of $8.9 billion by $1.1 billion. A version of a 3,000 cfs facility has been supported in recent months by a coalition of business and environmental groups.
“What’s clear from this report is that a new conveyance facility must be adequately sized in order to make it a worthwhile investment,” Terry Erlewine, general manager of the State Water Contractors, said in a press statement released Wednesday. “The smaller, single tunnel touted by some critics of the Bay Delta Conservation Plan very obviously does not pencil out from a cost-benefit standpoint.”
A broader economic analysis of the statewide economic impacts of the proposal is expected to be released by the Brown Administration in July.
Letty Belin, counselor to the deputy secretary of the U.S. Department of the Interior, said the Obama Administration is “arm in arm” with state officials on crafting a solution to the problems in the Day Delta.
“We very much agree with the state about the urgency of the problem,” said Belin. “We strongly believe that inaction is the worst option.”
Department of Water Resources Director Mark Cowin highlighted the economic benefits to the state of the project, saying the “economics of doing nothing is embedded in every part of the analysis.”
”The draft chapters released today demonstrate the value of the benefits of our proposed project to water users and we can consider the cost from the perspective of our nearly $2 trillion economy,” said Cowin. “Meanwhile, we urge Californians to get acquainted with the details of the draft plan and to bear in mind the high costs – from species extinction to water supply disruptions in the Delta – of doing nothing.”
In recent years, water deliveries from the Delta have been restricted to protect endangered fish such as smelt. Two-thirds of California’s population and 3 million acres of farmland draw water conveyed through the Delta by the State Water Project, operated by the California Department of Water Resources, and the Central Valley Project, operated by the U.S. Bureau of Reclamation.
The entire administrative draft of the plan is available at http://baydeltaconservationplan.com. A formal draft of the plan is expected to be released for public review in October.