LA may have to pay 90% of the cost for governor’s Delta tunnels

Jerry Brown wants to protect fish and allow more water to flow to the ocean.  In exchange for this, the people of Los Angeles will be forced to pay higher water rates—to pay for the $68 billion delta tunnels—that even the Obama Administration does not support.  This is the Brown payoff to unions and special interest—the general public is the loser.

“The governor’s tunnels, essentially an underground version of Mr. Brown’s ill-fated Peripheral Canal idea of the 1980s, “still represent a very poor return on investment for urban water users for the $16+ billion in capital cost: only about 10,000 acre-feet of annual water supply per $1 billion in capital investment,” the independent economist notes.

“Realistically, I think the only way the tunnels are built is as an urban project – with MWD (Metropolitan Water District) probably paying about 90 percent of the cost,” Mr. Michael says.”

Great news for the people of Southern California—higher taxes, more regulations, failed schools and now 90% of the cost of a political payoff.  Doesn’t Texas look better every day?

Lake Shasta Water Reservoir

LA may have to pay most of the cost for governor’s Delta tunnels

Central Valley Business Valley, 1/5/17

  • Final EIR puts the tab on urban water users, economist says
  • “Realistically, I think the only way the tunnels are built is as an urban project”

It will be the people of Los Angeles, Orange County and San Diego who will pay for most of Gov. Edmund Gerald Brown Jr.’s Delta water tunnels “legacy,” says an independent economist.

San Joaquin Valley farming companies will get off lightly by comparison.

Compared to the option of doing nothing, building the mammoth tunnels – each 40 feet in diameter and running for about 35 miles beneath the California Delta — is now projected to increase water supply to the State Water Project by an average of 186,000 acre feet per year, but decrease water supply to Central Valley Project south of Delta users by 14,000 acre feet per year, according to an analysis of the final environmental impact report.

The analysis is by economist Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton.

“While this is a slight decrease from the total exports estimated in the 2015 draft EIR, it is a large change in the distribution between agricultural and urban users,” he says in his online publication, “Valley Economy.”

“I don’t have any insight into why the CVP/SWP distribution changed, but these modeling results would seem to set the stage for the what I (and others) have long anticipated. CVP agricultural contractors will drop out of the [tunnels project] due to the cost and minimal water yield,” Mr. Michael says.

He says the cost of the tunnels could be more easily passed along to urban water users who have no choice if they want water to drink or use in their businesses.

Farmers, on the other hand, can tap groundwater in some cases or switch to less water-demanding crops.

The governor’s tunnels, essentially an underground version of Mr. Brown’s ill-fated Peripheral Canal idea of the 1980s, “still represent a very poor return on investment for urban water users for the $16+ billion in capital cost: only about 10,000 acre-feet of annual water supply per $1 billion in capital investment,” the independent economist notes.

“Realistically, I think the only way the tunnels are built is as an urban project – with MWD (Metropolitan Water District) probably paying about 90 percent of the cost,” Mr. Michael says.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.