Portfolio-Based Conceptual Alternative for the Bay-Delta

A diverse coalition of environmental and business groups and urban water agencies released a  “portfolio-based” conceptual alternative to meet the ecosystem and water-supply challenges facing the Bay-Delta, as well as to help California provide reliable water supplies for a healthy economy. This approach proposes a more diverse portfolio of investments, both in and outside of the Delta, rather than focusing exclusively on a large Delta facility and Delta habitat restoration, as the Bay-Delta Conservation Plan, or BDCP, largely has. This conceptual alternative shows how California can develop a plan that would shrink the size of a Delta facility, strengthen protection for the Bay-Delta ecosystem, lower total costs, and deliver more water to users. 

A New Portfolio of Solutions

The current BDCP approach and this new portfolio-based approach are summarized in these two graphics.

This alternative plan proposes the investigation of a smaller, less expensive new Delta facility—a 3,000 cfs diversion facility and a single tunnel designed to transport 3,000 cfs without the need for a separate energy source. It also proposes the restoration of 40,000 acres of Delta habitat over the next 15 to 20 years. Although ambitious, this restoration program would be half of the maximum in the current draft BDCP plan and would be focused on the near term, critical for habitat restoration. The scientific community has questioned the scientific foundation for the BDCP’s earlier focus on very large scale Delta tidal marsh restoration. This new approach, however, recommends a focus on restoration efforts with the strongest scientific basis and allows for testing the results of that effort before committing to larger scale restoration. 

This conceptual alternative also relies on proposed pumping rules developed by state and federal fisheries agency scientists to meet the needs of the Bay-Delta ecosystem and its fisheries, based on the best science available today. 

Dollars and Sense of the Alternative Plan

Reducing the size—and cost—of a Delta facility and habitat restoration would save billions of dollars that could be invested in a range of additional actions, such as reinforcing Delta levees, dramatically increasing water recycling, conservation and other local sources south of the Delta, improving cooperation among water agencies, and developing new south of Delta water storage. The portfolio approach allows the comparison of the relative benefits of investments within the Delta with the benefits of larger investments in export water areas in Southern California, the Central Valley, and the Southern Bay area. 

The proposal is designed to work within the budget of the current BDCP proposal, which envisions a capital investment of approximately $18 billion. Based on initial estimates, this conceptual alternative could cost $14 billion to $16 billion, with the potential for even higher savings, greater benefits, and broader support. 

It’s not an accident that this approach emphasizes the economic bottom line. All those involved in these discussions recognize that the CALFED effort to resolve Bay-Delta issues floundered in part because of its failure to resolve economic and financing issues. The reality is that a successful plan for the Bay-Delta must be environmentally and scientifically credible, implementable, and financeable.

In summary, the potential benefits of this approach include:

  • A less expensive, more cost-effective plan
  • More water for export water users
  • Faster water supply benefits
  • More local control of water supply and less reliance on imported water
  • More reliable dry year water supplies
  • Reduced vulnerability to earthquakes, sea level rise and climate change impacts
  • Better environmental results that are supported by science
  • Greater likelihood of permits from state and federal regulatory agencies
  • Greater potential to attract funding partners and reduced pressure for public funding
  • The potential for broader support in Delta communities
  • Thousands of new jobs in the communities that will pay the majority of costs of a Delta plan 

Filling in the Gaps

It’s important to note that this is not a proposed project, ready for permits and ribbon-cuttings, but a conceptual new approach that explores solutions that require further study. For example, BDCP has not evaluated the potential cost-effective approach to South of Delta storage included in this proposal, or whether one million acre-feet of new storage is an optimal size, and NRDC is requesting an analysis of these open questions in the BDCP environmental review. Similarly, none of the supporters of the portfolio approach is ready to endorse the new agency-developed operations proposal that it includes. But it is a credible starting point for a debate over the right science-based pumping rules. Additional cost-benefit analyses and input from more stakeholders would further inform the discussion of a final plan for the Delta, but this conceptual alternative lays out the promising groundwork.

Next Steps

The next step is for BDCP to incorporate this conceptual alternative in its upcoming analyses, including a recently initiated cost-benefit analysis, the draft EIR/EIS, the Clean Water Act Section 404 analysis, and more. The result will be a more affordable, effective, implementable, and financeable plan with broader support. 

Bay-Delta issues have become increasingly polarized in the past decade, but this new collaborative approach is encouraging. In the past, when environmental and business groups have reached common ground with water agencies, it has led to major breakthroughs like the Central Valley Project Improvement Act, the 2009 Delta Reform Act legislative package, and the creation of the California Urban Water Conservation Council.  

In the investment community, it is accepted wisdom that a diversified portfolio of investments is a wise strategy to minimize risk and obtain an acceptable return. For many years, the BDCP has focused on putting billions of dollars of eggs largely into two baskets in the Delta—a large new conveyance facility and a massive investment in Delta habitat restoration. This new portfolio approach is testing the theory that a more comprehensive plan offers an affordable and effective strategy for protecting the Bay-Delta as an essential ecosystem and water-supply source.