The Metropolitan Water District of Southern #California board approves ~$11 billion commitment to the #CAWaterFix

Here’s the release from MWD (Rebecca Kimitch/Bob Muir):

METROPOLITAN BOARD APPROVES ADDITIONAL FUNDING FOR FULL-SCALE, TWO-TUNNEL CALIFORNIA WATERFIX

The board of directors of the Metropolitan Water District of Southern California voted today to provide the additional financing necessary to allow for the construction of the full California WaterFix project.

The board authorized $10.8 billion for the project to modernize the state’s aging water delivery system, making Metropolitan the primary investor in the project and more than doubling the agency’s initially planned investment to ensure the project is completed as originally proposed and studied.

“For decades, we have sought a solution to the problems of the Bay Delta, problems that put Southern California’s water supply at risk,” Metropolitan board Chairman Randy Record said. “We finally have that solution, California WaterFix. We simply could not jeopardize the opportunity to move this long-sought and much-needed project forward.”

WaterFix will be paid for by the people and businesses that use the water it helps deliver via the retail water agencies and cities that serve those customers. Metropolitan’s financing of the full project is expected to cost households on average up to $4.80 a month, though that average cost would be reduced as Metropolitan recoups some of its investments from the agricultural sector. Metropolitan will be selling or leasing capacity in the tunnels to allow water deliveries or exchanges for other parties.

About 30 percent of the water that flows out of taps in Southern California comes from Northern California via the Sacramento-San Joaquin Delta. But the Delta’s delivery system is badly outdated, its ecosystem is in decline and its 1,100-mile levee system is increasingly vulnerable to earthquakes, flooding, saltwater intrusion, sea level rise and environmental degradation.

Attempts to help the Delta have led to regulatory restrictions that have reduced water exports from the region. California WaterFix would modernize the state’s water delivery system by building three new water intakes in the northern Delta and two tunnels to carry the water under the Delta to the existing aqueduct systems in the southern Delta that deliver water to cities and farms.

In October 2017, Metropolitan’s board initially voted to participate in WaterFix and contribute up to 26 percent of its $17 billion cost, or about $4.3 billion.

But the majority of federal agricultural contractors who also import supplies via the Delta have yet to commit to investing in the project, leaving part of the project’s costs unfunded. In February, the state proposed building the project in stages instead–starting with two intakes and one tunnel, with a capacity of 6,000 cubic feet per second. An additional intake and tunnel would be added when funding allowed.

In today’s action, Metropolitan’s board chose between supporting this staged construction of the project or helping finance the full 9,000 cfs project all at once, with the hope of recouping the investment from agricultural interests once the project is completed. Staging the project also would result in potential permitting delays associated with the change in approach.

Under the staged approach, the cost of building one tunnel would be about $11.1 billion, with Metropolitan’s share of those capital costs coming in at $5.2 billion. The board ultimately voted to support building the full project all at once at an estimated cost of $16.7 billion, with Metropolitan’s investment at about $10.8 billion in today’s dollars.

“Two tunnels better accomplishes WaterFix’s co-equal goals of improving the environment and securing supply reliability,” said Metropolitan General Manager Jeffrey Kightlinger. “With them, we’re better able to capture the high flows of big storms that climate change is expected to bring. We’ll better address the reverse flows that disrupt the Delta’s ecology. And we’ll have more flexibility to operate the water delivery system.”
Kightlinger added that investing in WaterFix does not change Metropolitan’s commitment to local supply development and conservation.

“This investment is just one part of ensuring Southern California and its $1.3 trillion economy has a reliable water supply in the age of climate change,” he said. “We need a diverse portfolio, including water recycling, storm-water capture, and increased conservation. We will continue to work hard and invest in those projects.”

From The Lost Angeles Times (Bettina Boxall):

The Metropolitan Water District of Southern California voted Tuesday to shoulder most of the cost of revamping the system that delivers water from the Sacramento-San Joaquin delta to the Southland, committing nearly $11 billion to building two massive tunnels.

The approval, by a surprisingly strong margin, pushes ahead a controversial infrastructure project that has dominated discussions of how to halt the delta’s steep ecological decline — a decline that has threatened water deliveries to Los Angeles and other parts of the state’s most populous region.

A top priority of Gov. Jerry Brown’s administration, the tunnels project has been in the planning stages for more than a decade.

The MWD vote does not assure that it will be built. The project has yet to obtain key permits and faces years of legal challenges by opponents who consider it a costly diversion from more-sustainable water development projects such as recycling and storm water capture.

But it helps clear the path for an overhaul that MWD’s influential staff has insisted is vital to sustaining deliveries that make up roughly a third of the Southland’s water supply.

The vote capped months of back and forth over tunnel financing, which emerged as a make-or-break issue for one of the most ambitious water projects proposed in California in decades…

Ultimately two options emerged: Build a cheaper, one-tunnel version that would be financed by MWD and the mostly urban districts that get delta water deliveries from the State Water Project. Or have MWD pay for roughly two-thirds of the twin tunnel project, with other districts supplying the rest.
The funding debate inevitably reflected the conflicts over California’s water use and the environment.

The project — known as California WaterFix — is fundamentally an attempt to maintain a robust level of deliveries to San Joaquin Valley agribusiness and Southern California cities. Those deliveries have been subject to growing limits triggered by the harmful effects of water exports on the delta environment.

By modifying the way some supplies are routed through the delta, the tunnels are designed to lessen those impacts and thus avert further export restrictions. Proponents also say the tunnels will make a key part of the state’s water system less vulnerable to earthquakes and rising sea levels.
Opponents — primarily delta interests and major environmental groups — argue that the twin tunnels would inevitably be used to rob the delta of more fresh water. The answer to the delta’s problems is to reduce exports and develop more local supplies, they say.

Agriculture’s unwillingness to help pay for a project that it arguably needs more than urban districts — which have more diverse water sources — highlighted the degree to which the state’s fruit-and-vegetable garden depends on federal water projects that provide cheap supplies subsidized by taxpayers.

The conflicts were evident in the fractious board debate leading up to Tuesday’s vote.

Delegations from Los Angeles and the San Diego County Water Authority, both of which are working to reduce reliance on imported supplies and develop more local sources, led the fight against MWD taking on most of the two-tunnel bill.

An $11-billion tunnel bill was financially risky, they argued. Since an MWD analysis concluded that two tunnels wouldn’t send any more water to the Southland than one tunnel, they also insisted that Southern California shouldn’t have to foot the bill for the extra capacity…

MWD has projected that investing roughly $11 billion in the tunnels would raise residential rates by $60 a year. Opponents contend the increase could be far greater.

The board’s twin-tunnel proponents, led by the Municipal Water District of Orange County, argued that building the full project would give water managers more flexibility in running delta operations, provide greater capacity to divert water during high flows and ultimately do a better job of sustaining delta deliveries that the Southland can’t do without.

They also predicted that MWD could recoup its extra investment by selling tunnel supplies to growers once the project was finished.

From The Sacramento Bee (Dale Kasler and Ryan Sabalow):

In a historic decision, the wealthy Metropolitan Water District of Southern California voted to take a majority stake in the $16.7 billion twin-tunnels project, a plan championed by Gov. Jerry Brown as a way of protecting the water supply for more than 25 million Southern California and Bay Area residents.

Metropolitan’s breakthrough vote put the tunnels on the brink of full funding after years of struggle.

The project was opposed by most environmentalists, Delta landowners and Sacramento-area elected officials. Wary of the cost, most San Joaquin Valley farmers haven’t been willing to contribute to the project, which left a gap of about $5.6 billion.

Metropolitan agreed Tuesday to bankroll the farmers’ share, putting its total contribution to the project at $10.8 billion. The Southern California agency hopes to sell some of the tunnels’ capacity to the farmers to recoup its additional investment.

“In 15 years, our ratepayers won’t be left holding the bag,” said Board Chairman Randy Record. “They’ll be holding a really valuable piece of infrastructure.”

With vast financial resources and the ability to spread the costs among 19 million residents, Metropolitan was willing to take on the risk even though it hasn’t been able yet to make any deals with valley farmers. The cost will inflate the average residential water bill in Southern California by up to $4.80 a month if the farmers don’t pitch in, according to Metropolitan’s staff.

The vote was 61-39 percent under Metropolitan’s unusual voting system, which is weighted by assessed property values. San Diego and Los Angeles’ board members voted against the project, but were overcome by a group led by directors from Orange County and elsewhere.

“This is the cheapest source of water that is available to us currently,” said Steve Blois, a board member from Thousand Oaks.

But vice chairman John W. Murray Jr., a Los Angeles representative, said it was folly “to take on the risk and the burden and the responsibility … with no assurance that at this point the Central Valley (agricultural) agencies are going to contribute.” Los Angeles board member Mark Gold blasted the idea of moving ahead on a project “that the two largest cities in the state don’t support,” a reference to L.A. and San Diego.

Southern California business leaders lined up strongly in support of the project, saying the tunnels are needed to secure future water supplies. The region relies on water pumped out of the Delta for about 30 percent of its supplies.

Last fall, Metropolitan committed to spending about $4 billion for its share of the twin tunnels. But with the valley farmers refusing to get on board, Brown’s administration in February backed a more modest approach: Consider building a single tunnel first for about $11 billion and a second tunnel later if more dollars became available.

Metropolitan originally was set to vote on increasing its contribution by about $1 billion, to a total of $5.2 billion, for its roughly 50 percent share of the first tunnel, with the backing of the agency’s executive staff. But late last week several board members began pushing for a plan the Southern California agency had pondered but then scrapped: Paying $10.8 billion for 65 percent of the full, twin-tunnel project. Board members said it was unlikely that a second tunnel would ever materialize under the “phased” approach.

Why does a second tunnel matter? Brown and his allies say the twin pipes would do a far more effective job of fixing the Sacramento-San Joaquin Delta’s fragile ecosystem while allowing water to move to the south state more reliably. He urged Metropolitan on Monday to approve the two-tunnel funding plan and applauded the vote late Tuesday.

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