Funding could be biggest hurdle faced by the delta tunnel as water users weigh costs versus benefits of the $16 billion project

February 26, 2024
Jesse Vad, SJV Water
by Jesse Vad, SJV Water
A family fishes in the California Aqueduct near Mettler in this 2021 photo. The aqueduct is the main artery of the State Water Project, bringing water from the Sacramento-San Joaquin Delta hundreds of miles south to farms and cities, including southern California. Lois Henry / SJV Water
Jesse Vad, SJV Water
Jesse Vad, SJV Water

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The controversial Delta Conveyance Project may have bigger problems than legal action over its recently approved environmental impact report. 

Who’s going to pay the estimated $16 billion price tag?

The concept, a tunnel to take Sacramento River water beneath the Sacramento-San Joaquin Delta to thirsty towns and farms further south, relies on the end users footing the bill. But over the decades that the project has languished in various iterations, those end users have become less enthusiastic to open their wallets.

Costs piling up

In fact, the single largest recipient of delta water via the State Water Project – and the single largest payer – the Metropolitan Water District of Southern California, has committed only $160 million for project planning this time around.

Met’s board of directors has not decided if it will take part in the project, nor how much it will commit further down the road if it does participate, said a Met spokesperson. The board will be doing more cost-benefit analysis over the next year before deciding how much it may kick in, said the spokesperson.

That’s a far cry from 2018 when Met’s board approved paying $11 billion to get the then twin-tunnel project done. That never came to pass, however, as that project, called the California WaterFix, was scrapped and redesigned after Gov. Gavin Newsom took office in 2019.

Water agencies that receive delta water through the State Water Project had already paid a combined $160 million between 2007 and 2019 for study and planning work on the California WaterFix, according to the Department of Water Resources (DWR).

Kern County Water Agency, the second largest State Water Project contractor, has paid about $71 million since 2007 on studies and planning for the various versions of the delta project. That includes about $36 million since 2021 on the more recent Delta Conveyance project. 

Agency staff did not respond to questions about whether the agency has committed to continue funding the current project. And, if so, how much.

The agency represents 13 agricultural water districts in Kern County and not all of them are on board to continue paying for the Delta Conveyance.

Does it pencil out?

While the State Water Project has become increasingly less reliable, delivering less water than contractors pay for most years, the Delta Conveyance Project doesn’t have any guarantees either.

“The main reason why our district didn’t decide to participate is due to the potential cost of the project without a firm understanding of what it was actually going to deliver,” said Steven Teglia, general manager of the Kern Delta Water Agency.

At 25,000 acre feet per year, Kern Delta receives a relatively small allocation from the State Water Project, which was also a contributing factor for his district, said Teglia. 

The amount of preliminary work that the project requires and the legal battles that have sprouted up over the project are all going to be expensive challenges that come before understanding what the project would realistically produce, said Teglia. 

“Everything is a little bit of a gamble, if you will, on the front end,” said Teglia. “But you try to make the best decision you can based upon the information you have at the time.”

For the Rosedale-Rio Bravo Water Storage District, the project makes sense to continue funding – up to a point.

Rosedale’s board has committed $2.3 million to the project so far. 

“We’ve looked at the current state of the State Water Project, the restrictions on delta pumping, and what that’s done to the State Water Project allocations and the consistent decrease in State Water Project water that is available,” said Trent Taylor, water resources manager. “And our participation to date has been in recognition of this project providing more state water project reliability in the future.”

New cost estimates for the project are expected later this year, said Taylor. 

“We’ll be keeping a keen eye on those new cost estimates,” said Taylor. “Then we’ll have to do our own internal economic analysis on our participation.” 

If the costs outstrip the potential benefits, Rosedale may decide to bow out as well.

No version is worth the money, to some

Other State Water Project contractors have not only refrained from funding the Delta Conveyance project, they’ve also publicly criticized it.

In 2020, the Tulare Lake Basin Water Storage District in Kings County sent a letter to Governor Newsom objecting to further funding for the tunnel. 

The letter points to economic conditions, uncertainty about the stability of the State Water Project and lawsuits against the project as reasons to discontinue it. 

“While we appreciate DWR and other State Water Contractor efforts, the project as currently contemplated will negatively impact TLBWSD and many others,” the letter reads. 

Representatives from TLBWSD, Kings County, Empire-Westside Irrigation District and Oak Flat Water District signed the letter. Representatives from TLBWSD and Kings County did not respond to requests for comment. Staff from Oak Flat Water District declined to comment. 

This isn’t the first time a delta workaround has been opposed by ag interests in Kings County.

The single largest landowner in the Tulare Lake Basin Water Storage District is the J.G. Boswell Company, which vehemently opposed the peripheral canal in the 1980s. 

The canal, which had been proposed since the 1940s, would have routed Sacramento River around the delta. Media accounts at the time, stated Boswell and other ag interests felt provisions to protect water supplies and quality for in-delta farms and residents would have been too restrictive.

Boswell helped fund a statewide media campaign against the canal, calling it a southern California “water grab” and in 1982 it was defeated.

Project no longer an option with climate change

Despite the costs, others see the Delta Conveyance project as a crucial step forward in a time where climate change is squeezing water resources. Of the 29 State Water Project contractors, 18 are helping to fund the Delta Conveyance project, said Jennifer Pierre, General Manager of the State Water contractors.

“This project ensures the viability of the whole State Water Project for the next 50 to 100 years,” Pierre said. “It’s very clear that with climate change, the State Water Project’s ability to be a reliable source of water is going to be more and more challenging. And the tunnel mitigates that.”

Water users no longer have the luxury of frequent, sufficient snowpack years paired with slow melts that fill reservoirs, said Pierre. Instead, in years where there is water available it’s more often a “mass deluge” followed by a scramble to figure out how you’re going to take water and where you’re going to put it, she added. 

State officials said that if the delta tunnel had been in operation in 2023, a historic wet year, it would have brought an additional 228,000 acre feet of water into San Luis Reservoir. Environmental groups dispute that amount. 

But believers of the project will not stop moving forward, said Pierre. 

“This project is not fun to work on. I’ve been working on it for almost 13 years and there’s a reason why people haven’t stopped pursuing it and why people aren’t gonna stop pursuing it,” said Pierre. “I’m aware of the criticisms, I’m aware of the legal challenges, but I don’t think those are going to, in and of themselves, cause our participating agencies to abandon the pursuit of the project, because it’s just so critical to the affordability of their overall portfolio.”

Jesse Vad, SJV Water

SJV Water is an independent, nonprofit news site dedicated to covering water in the San Joaquin Valley. Get inside access to SJV Water by becoming a member.


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