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Executive Summary for August 18th

In this weekly roundup, we analyze key water developments around the West, including emerging realities about the cost of California’s big water tunnel project and Colorado’s 30-year water plan, and promising developments in updating the Colorado River treaty.

Published on Aug. 18, 2017 Read time Approx. 3 minutes

California Water Tunnels: What’s the Real Cost for Ratepayers?

The massive water diversion tunnels proposed to be built under California’s Sacramento-San Joaquin Delta are an expensive undertaking: $17 billion is the latest working estimate. The local water utilities that must ultimately pay the bill are weeks away from final decisions about whether to support the project. So, after years of study and controversy, they’re at last beginning to tell ratepayers about the burden that could fall on them.

The tunnels are designed to divert a portion of the Sacramento River’s flow under the Delta, in order to minimize harm to endangered fish caused by the current diversion works. The Los Angeles Times reports that, at a meeting this week, the board of directors of the Metropolitan Water District of Southern California was told the project would cost its member utilities $9.2 billion, or about 55 percent of the total cost. This would work out to as much as $38 per year for each residential water customer in the Los Angeles-San Diego metro region, depending on interest rates.

Like everything about the project, the estimate was immediately challenged. Critics said the district could end up shouldering an even larger share of the cost, because San Joaquin Valley irrigation districts may decide the project is too expensive.

MWD’s estimate also assumes the tunnels will deliver 1.3 million acre-feet more water than the present diversion system provides from the Delta. Jeffrey Michael, a University of the Pacific economist who has been critical of the project, called this estimate “wildly optimistic.” It also contradicts the state’s own estimates, which have consistently shown the tunnels may not deliver more water – but will deliver existing supplies more reliably. The differing estimates could throw off the cost projections, the financing – and the ultimate bill for ratepayers.

The tunnel project has been under study for a decade. Now some MWD board members say they need more time to review the project and consider the costs. That’s understandable: It’s a huge burden to place on the district’s 19 million customers.

Deal Close on Updating Colorado River Treaty

Politics between the U.S. and Mexico are not in a happy place, generally speaking. But the two countries have managed to reach agreement to update a crucial Colorado River treaty set to expire at the end of this year.

Even as political tensions have grown over President Trump’s immigration policies and his vows to have Mexico foot the bill for a border wall, the Colorado River negotiations seem to have moved ahead relatively smoothly, the Desert Sun newspaper reports.

Under the agreement, Mexico, the U.S. and nongovernmental organizations will team up to secure water for environmental purposes, plus $18 million for habitat restoration and monitoring. The accord also lays out a strategy for Mexico and the U.S. states jointly to put the brakes on water use to reduce the risks of a crash in Colorado River supplies if drought persists. And it provides for Mexico to continue storing water in Lake Mead, near Las Vegas, which helps avoid triggering shortage conditions.

“It seems like everybody’s in agreement on how to address these challenging issues,” said Tina Shields, water manager at California’s Imperial Irrigation District, a crucial player in the negotiations.

Colorado Water Plan Price Tag Doubles

The cost to achieve the goals in Colorado Gov. John Hickenlooper’s ambitious 30-year water plan has doubled to at least $40 billion, according to the Colorado Independent.

The new estimate comes from the new director of the Colorado Water Conservation Board, Becky Mitchell. She’s apparently taking a more realistic view of the plan, which includes a long list of new water storage projects and conservation programs. The latter, apparently, was not included in the $20 billion estimate prepared by Mitchell’s predecessor, James Eklund, who resigned in March.

The plan aims to secure enough water to keep up with rampant growth, which is expected to boost the state population of 5.5 million last year to as many as 10 million by 2050. It has always been unclear where the money to implement the plan would come from – and that’s more true than ever now that the cost has doubled.

But Mitchell said it’s important not to get “hung up” on the cost.

“What’s more productive is framing this around how much progress we’ve made coming together around this plan,” she said. “We have to look at the whole picture right now. We just have to.”

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