The Real Costs of the CA WaterFix
By Barbara Barrigan-Parrilla
***Editor’s Note: The following article is one viewpoint on the proposed California WaterFix project , the topic of our Head to Head feature in July. On July 21, an opposing viewpoint was published in the article “Modernizing the Delta: Time for a Decision.”
Californians will face huge costs and unreliable deliveries from the climate change-sensitive California WaterFix, a two-tunnels water diversion project that would continue to over-extract water from the San Francisco Bay-Delta.
CA WaterFix’s construction cost alone starts at $17 billion in 2017 dollars, according to Metropolitan Water District of Southern California, excluding annualized operating costs and debt service. It will take 17 years to complete the project, causing major economic, environmental, and community disruptions throughout the Delta. After 11 years, the project still has no clear finance plan and is only 10% designed.
Though water contractors insist that beneficiaries will pay, Goldman Sachs recently presented to Westlands Water District board members an array of finance options, including federal loans, that are most often used for public private partnerships.
Based on incomplete design and risk assessments, and a smorgasbord of financing options, Santa Clara Valley Water District, Kern County Water Agency, Westlands Water District, and Metropolitan Water District are expected to make a decision by September as to whether to commit to financing the project in addition to joining the project’s joint powers authority for construction.
Early this year, a U.S. Environmental Protection Agency fact sheet about P3s, industry jargon for public-private partnerships, found that they are challenging at best to arrange, can balloon costs, and delay projects. Often such projects are rescued by taxpayers, as was the joint powers authority for the Seattle tunnels.
Even more troubling, a review of the Goldman Sachs presentation to Westlands Water District by Natural Resources Defense Council Senior Attorney Doug Obegi found that the baseline used by Goldman Sachs to calculate incremental water supply is different than the one used in the CEQA/NEPA documents for CA WaterFix. University of the Pacific economist, Dr. Jeff Michael, found in the final CA WaterFix EIS/EIR that the State Water Project would only increase exports by 186,000 acre feet, while the Central Valley Project would reduce exports by 14,000 acre feet — creating a significant increase in costs for water, especially for CVP contractors.
CA WaterFix has been sold to Californians as a system that would seek “big gulps” during flood seasons and wet years, and “little sips” during droughts. Westland Water District’s General Manager Tom Birmingham said at the Goldman Sachs/Westlands event that Westlands would see the most benefit from taking gulps of Sacramento River water during high water events that occur in dry years. These are the same water years that flows would be essential for protecting fisheries in the Bay-Delta estuary, as well as domestic and irrigation water quality and supplies for the Delta’s four million residents.
As the 21st century wears on and droughts become longer and more frequent, there will be fewer big gulps to fill the Delta tunnels, and the entire project is likely to become a stranded asset from climate change. Goldman Sachs, however, suggested that financing for the project can be extended for 50 to 75 years, despite a shrinking Delta watershed.
While Governor Brown remains convinced that there is no “Plan B” after the tunnels, local and regional water agencies throughout California are already investing in their own drought-resistant water storage, reuse, recycling, and conservation programs. There is a real possibility that local water agencies will forego investments in regional self-reliance in order to increase imported water sales for Tunnels debt repayment, a troubling proposition for water ratepayers.
When it comes to California water management, regional self-reliance and climate change-resilient strategies are the only way to protect our state’s residents, ecosystems, natural resources, and economy.

Barbara Barrigan-Parrilla is the Executive Director and a co-founder of Restore the Delta. The opinions in this article are presented in the spirit of spurring discussion and reflect those of the author and not necessarily the Treasurer, his office or the State of California.
