Price Tag for Bay Delta Water Plan Swells to $24.5 Billion
The final segments of Governor Brown’s proposed $24.5-billion Bay Delta Conservation Plan (BDCP) were released May 29 at a news conference in the Silicon Valley. The administrative drafts of chapters 8–12 address issues of cost, funding and general need for the controversial 50-year project which would create new water intakes and tunnels and restore habitats in the fragile Sacramento-San Joaquin Delta area, the largest estuary in the U.S.
When first proposed the plan was estimated to cost $4 billion, then raised to $14 billion and then to the current value.
"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" says John Laird, secretary of California Natural Resources Agency.
The plan would transport fresh water from the Sacramento and San Joaquin rivers to California water facilities without using the Bay Delta as the primary conduit. Construction would include two 40-ft-diameter tunnels running five miles beneath the Delta and 30 miles above ground, diverting 9,000 cu ft per second of fresh water into new water facilities. Along the way, project officials say levees will be seismically upgraded, 145,000 acres of Delta habitat restored and 57 species of plants and animals saved.
In releasing the new chapters, Laird says transparency is important for all the local water agencies, environmental and conservation organizations, state and federal agencies and other interest groups behind the plan. "The entire draft is available for the public to see," he said.
The public can see it all but will they understand it? Take the $24.5-billion price tag for instance. Mark Cowin, director of California Department of Water Resources, says this figure is in "undiscounted 2012 dollars," of which $14.5 billion is for conveyance systems and the rest for capital costs, habitat restoration, and operations and maintenance costs over the life of the project.
But Cowin, who says the findings released are still very preliminary and can change at anytime, cautioned that there are many different ways of looking at costs. He says the overall estimate is for "undiscounted" dollars that don't take into consideration discount rates or interest.
"For other purposes in the plan we use discount rates and apply different economical principals," Cowin says. "When you see different numbers, consider what the purpose is, and ask an expert."
The plan calls for the project to be paid for over 50 years, with about 70% coming from agencies receiving water from the project, and the rest coming from state and federal sources and bond measures. Dr. David Sunding, economics professor at UC Berkeley, says the cost to consumers along the water route would be about $5 per month for about 40 years.
Chapter nine of the report focuses on the economic benefits and costs of the BDCP to the state and federal water contractors that are going to pay for more than two-thirds of it. Sunding says the study considered three categories of economic benefits: increased water supply reliability, increased water quality and reduced seismic risks because of new conveyances.
He says the analysis finds that the benefits of these three categories outweigh the project costs by 30% to 40%, yielding "a reasonable rate of return on water investment."
Officials said they hope to have a state-wide economic impact study of the BDCP released in July and a public review draft of the environmental impact report/statement out in October.