Major Unknowns Remain Just Ahead of Key Votes on Massive Water Project

Just weeks before key votes on a multibillion-dollar state water project, two major questions remain: How much water will the project actually deliver? How much will that water actually cost?

If those sound like the only two things you’d really want to be sure about before investing billions of dollars in a new water project – well, they are.

The project, known as WaterFix, is designed to ensure that water keeps coming south through the Sacramento-San Joaquin Bay Delta, a series of waterways and wetlands fed by snow melting in the Sierra Nevada mountain range. An existing series of canals through the Delta harm fish and are also susceptible to catastrophic damage from an earthquake or rising sea levels.

The project has evolved over the years. In 1982, state officials – including then-Gov. Jerry Brown, during his first stint in office – wanted to build a new canal around the Delta. That was rejected by voters. Now, the plan is to build a pair of 35-mile-long tunnels under the Delta instead. This time around, water agencies – not voters – will decide if the project gets built.

Some of the unknowns surrounding the project may only be answerable when it’s up and running – an engineering and construction feat that will take at least 18 years. By that point, of course, it will be too late.

The Cost Question

The Metropolitan Water District of Southern California guesses the project will end up costing the average Southern California household about $2 a month.

Metropolitan is the largest supplier of water to San Diego. The San Diego County Water Authority buys water from Metropolitan and then sells it to local water agencies, like the city of San Diego’s water department. So any costs will trickle down.

But that number depends on a number of long- and short-term variables that are hard to predict.

Oddly, the thing that may have the highest degree of certainty is the cost of constructing the tunnels. Some people scoff, pointing to the Big Dig in Boston, a tunneling project that was expected to cost $2.6 billion but ended up costing more than $15 billion.

“Any mega construction project, there is potential for things to go haywire,” said Jeffrey Kightlinger, Metropolitan’s general manager. But he said the agency has done what it can to vet the costs. The agency has three different cost estimates, for instance.

The highest is $16.7 billion – a figure that already includes $3.7 billion in cost overruns.

Another big variable is who puts in money to pay for those costs.

The tunnels would deliver water to a number of different water agencies up and down the state, not just Metropolitan.

About 55 percent of the water would go largely to cities in Southern California and farmers in the Central Valley who use an existing series of canals, known as the State Water Project, which was built by the state. About 30 percent of Southern California’s water comes from this state project, including about a fifth of San Diego’s water.

The rest of the water goes to a group of farmers who get water from a separate set of canals known as the Central Valley Project, which was built by the federal government. The new tunnels are designed to help make both the state and federal water projects more reliable.

If the world were a simple place, each group of would pay based on how much water they get. If everybody paid their share of the water, Metropolitan would pay about 26 percent of the project’s cost and get about 26 percent of the water.

But, of course, things may not be that simple.

It’s not clear if the farmers on the federal system will chip in, nor how many of the agencies on the state system will either.

So if agencies opt out, the agencies that stay in will have to decide if they will pay more for the project, even though paying more doesn’t necessarily mean getting more water.

Farmers and urban water agencies have a different pain tolerance for higher water prices. A group of farmers in the Westlands Water District, which has long supported the tunnels project, recently got spooked when Goldman Sachs estimated they could end up paying $500 an acre foot, or about triple the super cheap rate they currently have.

But Metropolitan expects it will end up paying about $1,200 for an acre foot of water. An acre foot is about as much water as two single-family homes use in a year. At that price, the deal looks pretty good to Metropolitan staff, given that San Diego pays about $2,400 for an acre foot of desalinated water these days.

If farmers bail, critics of the project worry that Metropolitan will gradually take on more and more of the project’s costs until it has bitten off more than Southern California ratepayers can chew, including ratepayers in San Diego.

Metropolitan’s board won’t know everyone who is in or out when it’s set to vote on Sept. 26. That’s why there will likely be two sets of votes.

The first vote at Metropolitan will assume that everybody pays their share of the project.

Then, once all the other agencies wrap up their voting – likely by mid-October – Metropolitan may vote again. If a bunch of agencies that serve farmers drop out, Metropolitan may try to sign side deals to buy up that water and to save the project from collapsing.

Then, by the end of the year, Metropolitan would vote again on the various side deals.

The Supply Question

If the tunnels end up delivering a whole lot of water, there is little question that water will come in handy. The other outstanding question, though, is how much water they will end up carrying. In the past, the point of new water projects was to get more water – the tunnels, though, are mainly just designed to make sure there isn’t a lot less.

Right now, about 4.7 million acre feet of water move through the Delta in an average year. Without the tunnels and because of regulations, that number is projected to decline to 3.5 million acre feet. That fall is based largely on the assumption that new state or federal environmental regulations will require more and more water to be sent to the Pacific Ocean to preserve the natural flow of rivers and protect fish.

With the tunnels, though, the amount of water moving through the Delta is projected to remain flat or rise to 5.3 million acre feet.

There is a lot of fighting over how significant future regulations will be either if the tunnels are built, or if they are not.

The Water Authority recently said the project only makes sense if “regulations become more stringent.” Environmental groups, like the Natural Resources Defense Council, have taken a similar position. But if those regulations don’t materialize, then the tunnels project might not be worth it.

So, the state is betting the regulations do become significantly more stringent, in part because it’s seen wave after wave of regulations cut into the amount of water it can deliver through the Delta.

“While there’s some uncertainty, we can look at the past couple of decades and we can really identify the limitations of our system for fisheries,” said Karla Nemeth, the deputy secretary for water policy at the state’s Natural Resources Agency.

There is actually a bit of chaos when it comes to figuring out where people stand on the tunnels. San Diego, for instance, used to be the biggest backer of a project like the tunnels; now it’s probably the biggest skeptic. Southern Californian water agencies, like Metropolitan, have been vilified in the past for trying to suck California dry; now they are being criticized for trying to build a project that doesn’t take enough of Northern California’s water. Similarly, environmentalists who generally want more regulations are arguing against assumptions that there will be new regulations.

Decisions

Over the years, the San Diego County Water Authority has gone from one of the project’s biggest supporters to one of its biggest skeptics, though the agency has yet to take a formal position. That will have to happen soon, even though San Diego still may not have satisfying answers to how much the project will cost or how much water it will provide.

“This makes it hard for us to figure out our position on this at this point,” said Fern Steiner, who represents San Diego on the Metropolitan board.

Whatever San Diego decides won’t matter that much, though. The most-watched votes will happen at Metropolitan, which is San Diego’s largest source of water. A vote on one version of the project is scheduled for Sept. 26, though some board members, including San Diego’s, are pushing for a delay.

The Water Authority may end up having to vote with imperfect information of its own. Right now, the Water Authority is waiting to see if the California Supreme Court will hear an appeal of a case it lost to Metropolitan over water rates – rates that may affect how much San Diego ends up paying for the tunnels. If the court declines to take the case, the Water Authority’s court loss will be final and it’ll have to live with the rates. But if the court does take the case, a ruling could take a year or more, so the Water Authority is going to have to decide without knowing for certain what price it will be paying for water.

But even though the Water Authority is Metropolitan’s biggest customer and is on the agency’s board, San Diego can’t block the deal there on its own, even if it wanted to.

Kightlinger said major decisions like the tunnels take courage because of the unknowns, but his own experience tells him it’s better to build than not.

“Decisions like this are always tricky when you’re looking into the future and making investments, but it’s pretty rare you see people say, ‘Gee, I wish we hadn’t built that,’” he said.