Why Ratepayers and Taxpayers Could Be Stuck Holding the Bill for a Massive Water Infrastructure Project in California

A LA Times editorial, "Give the Bay Delta Conservation Plan a chance," inexplicably accuses “critics of the proposed tunnel” for claiming that “wasteful Southern Californians intend to suck every last drop of the Sacramento River to water their luxuriant lawns.”  

The editorial fails to mention that the Southern California ratepayers who will pay for the tunnels are among the most vocal critics of the Bay Delta Conservation Plan (BDCP). The construction of two massive peripheral tunnels to export more water to corporate agribusiness will not only hasten the extinction of Central Valley salmon and Delta fish species and take fertile Delta farmland out of production, but it could also dramatically raise rates for Southern California water customers. 

A groundbreaking economic analysis by ECONorthwest released on August 7 by Food & Water Watch reveals that Los Angeles Department of Water and Power (LADWP) customers could be on the line for $2,003 to $9,182 per customer to pay for the 37-mile Peripheral Tunnels project announced by Governor Jerry Brown on July 25. 

California Water Impact Network (C-WIN) President Carolee Krieger urges Angelinos to learn from Santa Barbara County’s costly mistakes. 

"In 1991, Santa Barbara County voters approved the Coastal Aqueduct at an estimated cost of $270 million," said Krieger. "The aqueduct ended up costing nearly $1.7 billion and has not been necessary to meet the County's water needs. California ratepayers and taxpayers should expect the same bad deal with the Peripheral Tunnels." 

Krieger said most of the cost burden will fall on taxpayers and urban water ratepayers, although corporate agribusiness will receive the majority of the water from the tunnels through the Kern County Water Agency and Westlands Water District. While this taxpayer-subsidized water is intended for farming, an increasing amount of this water is being sold to real estate developers at large profits. 

“Water agencies like LADWP are at a crossroads of whether to invest in the failed engineered solutions of the past or invest in the future, which provides local water and local jobs,” said Conner Everts, the executive director of the Southern California Watershed Alliance. “This report shows the true cost of speculating on faraway infrastructure and illustrates why we should instead cost-effectively reduce demand here in L.A. first.” 

The white paper by ECONorthwest, one of the oldest independent economic consulting firms on the Pacific Coast, analyzes the impacts that the costs of building and operating the tunnels would have on LADWP ratepayers. It outlines a low-cost scenario of $20.6 billion, and a high-cost scenario of $47.2 billion. For each, they evaluate the costs if the state and federal water projects evenly split the costs of the tunnel and related activities, and if the state project paid 100 percent. 

This analysis does not take into consideration the environmental mitigation and other related expenses that will be left for California taxpayers to cover, which is estimated to cost between $3 and $5 billion. 

The analysis concludes with an overview of local water supply alternatives’ potential and costs. 

“The most reliable water is water that we save and obtain from our local communities,” said Kristin Lynch, Pacific Region director of Food & Water Watch. “LADWP is already planning on importing less water from the delta and maximizing local supplies despite projected population increases. These tunnels represent failed policies of the last century. L.A. has already embraced modern, smart water solutions and can’t afford the Governor’s archaic, wasteful pipedream.” 

The tunnel plan is a bad deal for salmon, Delta farmers and Southern California ratepayers. The LA Times, rather than saying "Give the Bay Delta Conservation Plan a chance," should proclaim, "Give salmon, the Delta and Southern California ratepayers a chance." 

To download the report, go to: http://documents.foodandwaterwatch.org/doc/BayDeltaConveyanceLAEconAnalysis.pdf