Two More Reasons Why BDCP Should Analyze Our Proposed Conceptual Alternative: Law and Economics
Skeptics of the portfolio approach recently put forward by NRDC and a coalition of business, municipal, water agency, and conservation interests have asked the question: ‘Why would water contractors pay for a tunnel that would deliver less water?’ This question misses the mark for at least three reasons.
First, by using the cost-savings from downsizing the current proposed tunnels, the portfolio approach would increase investments in cost-effective alternative regional water supplies, which would actually yield an increase in water supplies more quickly and more reliably than the proposed 9,000 cfs tunnels. In other words, the portfolio approach delivers more water more quickly for less money. That’s a good deal.
Second, the state’s asserted justification for a new conveyance facility around the Delta is not to divert more water; it’s to respond to risks facing the existing conveyance system, including disruptions in service from earthquakes, levee failures, and big storms. A new conveyance facility adds a relief valve to help cope with a temporary interruption in Delta water supply exports caused by a natural disaster (although expanding local and regional supplies that don't face the same threat of interruption also provides an important hedge). But Delta levee improvements are a critical part of any comprehensive strategy to respond to this threat, which the portfolio approach includes and the current BDCP proposed project does not. Spending all our money on supersizing the tunnels as a hedge against earthquake risks doesn’t make economic or policy sense given the critical need for flood improvements to protect the Delta and its residents against those threats. (See, for example, this cost-benefit analysis of earthquake risk reduction in the Delta prepared by the University of the Pacific’s Business Forecasting Center.)
Third, the question fails to recognize that any proposed tunnel project, no matter the size, must reduce diversions from the Delta, at least until the ecosystem recovers, in order to achieve the co-equal goal of restoring the ecosystem. That’s the inescapable lesson of the experiences of the last decade of excessive water withdrawals from the Delta, of the overwhelming weight of the science, and of the proposed operations developed by the fish agencies.
But there are two other important reasons why any new tunnel proposal must reduce diversions from the Delta: law and economics. With regard to economics, California cannot afford to put its future water supply eggs in one Delta basket, but must invest in a range of tools to meet future needs. Financial risk managers recognize this fact and will punish or reward water district managers based on their response. For example, Fitch just downgraded the bond rating for the City of Lomita, citing the “[c]ontinued delay in the production of local water” and expressing concern that “[t]he city is 100% reliant upon costly water from Metropolitan Water District of Southern California ..., the cost of which has increased nearly 70% per acre-foot since 2009.” Water managers throughout the state should sit up and take notice. It makes good business sense to invest more heavily in local water supplies and reduce reliance on the Delta.
The law too is clear that the policy of the State of California “is to reduce reliance on the Delta in meeting California’s future water supply needs through a statewide strategy of investing in improved regional supplies, conservation, and water use efficiency.” That policy is precisely what our portfolio approach is designed to implement. Despite efforts to mangle the meaning of this straightforward directive, this Water Code provision means what it says. Here’s what the lead author of the language from the State Assembly, then-Assemblyman, now-Congressman Huffman says about this provision:
As one of the legislators who helped write that Act, and who specifically insisted on the inclusion of the “reduce reliance” provision, let me be clear: the Act means what it says. Reduce means reduce — it means use less Delta water. Equally plain, it does not and cannot mean use more Delta water, even if technical justifications are offered based on per capita water use or other complex rationales.
There are those who seek to creatively reinterpret the word “future” to mean that all present reliance was somehow grandfathered in and that the goal of lessening our pressure on an oversubscribed Delta Estuary was somehow limited to some as-yet-unknown additional pressure.
These are inaccurate, self-serving interpretations of the Act by interests who knew full well in 2009 what the letter and spirit of the Act required. Having declared in 2009 that the level of reliance on the Delta was “unsustainable,” it would make no sense to enshrine that unsustainable reliance as a means of fixing the Delta.
A portfolio approach addresses all these realities far better than the proposed large twin-tunnel proposal. We urge policymakers to give it serious consideration as a viable alternative in the BDCP environmental review.