Fish Sniffer On Demand Digital Edition Issue 2723 Oct 26-Nov 9 | Page 22

VOL.37 • ISS. 23 Oct 26 - Nov 9, 2018 Restore the Delta, Dr. Jeffrey Michael Respond to Controversial California WaterFix Benefit-Cost Analysis O n September 20, the California Depart- ment of Water Resources (DWR) released a Benefit-Cost Analysisfor the Delta Tunnels written by Dr. David Sunding of the Brattle Group claiming that the California WaterFix could bring “billions of dollars in benefits” to those who receive their water from partici- pating State Water Project (SWP) contractors. The benefits include “improved water quality, more reliable water supplies, enhanced disaster preparedness, and climate change resilience,” according to Sunding, a professor of natural resource economics at UC Berkeley. In his initial response, Dr. Jeffrey Michael, the Executive Director of the Center for Business and Policy Research at the Univer- sity of the Pacific, pointed out four major flaws in the analysis, including the assump- tion of a “massive new subsidy” for agricul- tural users cost share from urban water user and the dependence of the positive bene- fit-cost on a “dubious new benefit”: the value of sea-level rise protection benefits. In Sunding’s report prepared for DWR, Sunding said, “The analysis described in this report demonstrates that investment in the California WaterFix results in positive net benefits for the SWP urban and agricultural contractors.” He claims that economic analysis summa- rized in the report goes beyond what is legally required for WaterFix and is “consistent with methods” described in the department’s “Economic Analysis Guidebook.” The analysis concludes that the WaterFix benefits to SWP water agencies are “substan- tial.” Urban agencies could see about $3.1 billion in net benefits, while WP agricultural agencies could see about $400 million in net benefits, Sunding claims. “The report compared the benefits and costs of WaterFix in relation to what would likely occur if WaterFix were not built, including further restrictions on existing SWP and CVP operations designed to minimize harmful reverse flows and protect species,” according to Sunding. “Without WaterFix, State Water Project contractors will see the continued deteriora- tion of their water supply reliability,” Sunding said. “This analysis shows there is substantial benefit for both urban and agricultural water users throughout the state, and that the project will be more affordable for consumers than local alternatives such as desalination and recycling.” He added that the analysis also indicates that “CVP south of Delta contractors would realize positive net benefits were they to utilize and pay for access to the new north Delta conveyance facilities.” A controversial feature of the report is that it monetizes the cost of climate change impacts and the benefits of offsetting those impacts. “WaterFix helps mitigate the impacts of climate change on the state’s water supply system,” Sunding said. “This feature of the WaterFix alone is worth several billion dollars and is an important rationale for implementing the project.” The economic analysis is available here. Dr. Jeffery Michael published blog post of his initial reaction to Dr. Sunding’s work, focusing on four errors within Dr. Sunding’s analysis: 1. “It assumes a massive new subsidy for agri- cultural users cost share from urban water users. The agricultural subsidy is contained within a “wheeling rate” that it assumes that Metropolitan Water District (MWD) would charge the Central Valley Project (CVP) for using the tunnels’ conveyance capacity. 2. “The positive benefit-cost ratio depends on a dubious new benefit: the value of sea-level rise protection benefits. The report estimates the present value of these sea-level rise benefits at a whopping $5.7 billion, a value that exceeds the study’s estimated total net benefit of the WaterFix. That means the benefit-cost ratio is negative for all user categories if this dubious new benefit is removed. This estimated benefit has never been included in any previous study of WaterFix, and thus it is a new benefit category created for this report when the old methodology fell short of giving a positive benefit-cost ratio. 3. “The report, press release and webpage falsely claim that this benefit-cost analysis is consistent with DWR’s Economic Analysis Guidebook. The Economic Analysis Guidebook clearly states that “Although economic analyses can be evaluated from many different perspec- tives (individuals, communities, etc.), DWR conducts these analyses from a statewide perspective.” The report is clear, even in its title, that it is an analysis from the perspective of water agencies that participate in WaterFix. It does not consider statewide impacts—which include costs to other water users or the envi- ronment - both of which are very large for this project. 4. “The single-tunnel scenario is clearly better for MWD and urban water users if one compares this study to a February 2018 analysis of single- tunnel by the same consulting firm. While that single-tunnel report had many of the same problems as this one, it We carry Lead Free Pistol ammo for did not need to include the hunter who wants to carry his a highly questionable handgun in Lead Free Hunting Zones. estimate of over $5 billion in sea-level rise Available in a variety of calibers... benefits to get a positive CALL FOR DETAILS! benefit-cost ratio. 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H, Sacramento, CA 95838 By Dan Bacher However, she noted three initial problems is whether the project benefits California or society as a whole. Dr. Michael has consis- in the fact sheet: tently shown it will not. Their refusal to 1. “The Brattle Group claims the project include this massive detail in their analysis will see increased benefits with the pursuit likely means that the contractors and DWR of low-interest Federal WIFIA loans. As want all Californians to subsidize the project we said in a statement earlier this week, in one way or another.” the WIFIA Letter of Interest submitted The California WaterFix proposal features by the Design Construction Finance Authority is fraught with misstatements and two massive, 35-mile-long tunnels under the Delta that would divert water from the Sacra- inaccuracies. mento River in the North Delta near Hood 2. “The analysis argues that the project to the state and federal pumping facilities implements components of the Sustainable in the South Delta to facilitate the export of Groundwater Management Act (SGMA) water to corporate agribusiness in the San which significantly increases the value Joaquin Valley and Southern California water of WaterFix to agricultural water users. agencies. Moreover, the analysis claims that the Opponents say the construction of the tunnels project is complementary to the tunnels would result in the devastation of state’s goal of ensuring the sustainability West Coast fisheries that depend on a healthy of groundwater reserves. However, estuary to thrive. The giant public works tunnels proponents failed to do adequate project would hasten the extinction of the groundwater analysis on communities in Sacramento River spring and winter run and around the Delta as well as Northern Chinook salmon, Central Valley steelhead, California at large, whom will be subjected Delta and longfin smelt and other fish species, to degraded groundwater supplies with as well as imperil salmon and steelhead popu- operation of the Delta tunnels. lations on the Trinity and Klamath rivers. 3. “Dr. Sunding insists that, “Transfer On September 17, Restore the Delta held a of WaterFix project benefits significantly press conference to debut the organization’s increases the overall values of the project new environmental justice report, “The Fate by reallocating capacity to users with the greatest willingness to pay for water supply of the Delta: Impacts of Proposed Water Projects and Plans on Delta Environmental reliability.” Justice Communities.” The report is available Tim Strachan, policy analyst for Restore to the public on the RTD website: https://bit. the Delta, also criticized the report for not ly/2D41Tsb addressing whether the Delta Tunnels will benefit not just the water contractors, but California or society as a whole. “Dr. Sunding’s reports have always *Trolling argued that the Motors project’s benefits *Fishfinders exceed the costs to *GPS the water contrac- *VHF tors, except in the Radios draft study Restore *Radar the Delta obtained *Batteries in a PRA request and in 2016,” said Chargers Stroshane. “The greater difficulty Dr. ONE DAY SERVICE Sunding would have, Largest Service on Installations with appointment and which DWR Center and the contractors in the West! do not wish to test, Marine Electronics Sales • Service • Installation Sunny’s Electric Marine 3705 20 (916) 487-3868 The KFBK OUTDOOR SHOW 3507 1 Rated with your Outdoor Radio Show host for 26 years! # Bob Simms Fishing • Hunting • Destinations Conservation • History Dedicated to the Northern California Outdoorsman Listen Every Saturday Morning from 5 am to 8am on BOB SIMMS CALIFORNIA’S LONGEST RUNNING OUTDOOR TALK SHOW!