<html><head></head><body><div style="color:#000; background-color:#fff; font-family:garamond, new york, times, serif;font-size:16px"><div id="yui_3_16_0_ym19_1_1473630289844_230437"><span style="color: rgb(173, 173, 173); font-family: Helvetica; font-size: 14px;">SEPTEMBER 9, 2016 1:00 PM</span><br></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 52px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230639"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230640">Delta tunnels proposal a muddled gamble</span></div><div style="margin-top: 0px; margin-bottom: 0px; text-align: center; font-size: 24px; line-height: normal; font-family: Helvetica; color: rgb(255, 255, 255); background-color: rgb(170, 170, 170); min-height: 29px;" id="yui_3_16_0_ym19_1_1473630289844_230685"><br id="yui_3_16_0_ym19_1_1473630289844_230687"></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 14px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230688"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230689">Jeffrey Michael</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230690"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230691">You would think that after a decade and hundreds of millions of dollars spent on planning and analysis, the plan would be clear. Instead, uncertainties regarding the proposed project, environmental impacts, costs, financing and authority over operations loom larger than ever. Why the muddle?</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230692"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230693">Gov. Arnold Schwarzenegger and Gov. Jerry Brown sought to improve water supply reliability and Delta ecosystem issues, the co-equal goals of the 2009 Delta Reform Act. However, the Delta tunnels proposal was initiated, developed and advocated for by water export interests and the Department of Water Resources, operator of the State Water Project, putting ecosystem and species protection agencies and interests in reactive roles.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230694"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230695">As stated in the proposed project, now known as the California WaterFix, “Real-time operations will be implemented to maximize water supply for the Central Valley Project and the State Water Project, subject to providing necessary protections for threatened and endangered species.” Importantly, exports are not limited to those proposed in WaterFix but to the maximum possible until stopped by state and federal agencies protecting species from risk of extinction, a one-sided statement of “co-equal.”</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230696"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230697">This approach to operating the twin tunnels will perpetuate, if not increase, ongoing conflict and uncertainty about water supplies and the survival of fish.</span></div><div style="margin-top: 0px; margin-bottom: 0px; text-align: center; font-size: 20px; line-height: normal; font-family: Helvetica; color: rgb(1, 147, 208);" id="yui_3_16_0_ym19_1_1473630289844_230698"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230699"><b id="yui_3_16_0_ym19_1_1473630289844_230700">THE STATE COULD REDUCE THE CONFUSION OVER THE WATERFIX IF IT WERE TO FOLLOW ITS OWN PLANNING GUIDELINES AND PREPARE A FEASIBILITY STUDY THAT ADDRESSES ENGINEERING, OPERATIONS, ENVIRONMENTAL, ECONOMIC AND FINANCE CONCERNS IN A CONSISTENT AND UNIFIED ANALYSIS.</b></span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230701"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230702">Uncertainty and confusion are also increased through a fragmented policy process. If water or environmental interests do not prevail in decisions of a state agency or state court, going to a federal agency, federal court or the Congress is common, and shifting battles to new arenas can continue for decades without final decision.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230703"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230704">Moreover, paying for the tunnels depends on the decisions of numerous local water districts, with significant differences among agricultural and urban districts.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230705"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230706">The state could reduce the confusion over the WaterFix if it were to follow its own planning guidelines and prepare a feasibility study that addresses engineering, operations, environmental, economic and finance concerns in a consistent and unified analysis. Instead, the WaterFix proposal advances engineering proposals and environmental analyses that are disconnected from the project’s financial needs, combined with opaque descriptions of governance and authority.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230707"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230708">An economic analysis and detailed financial plan were promised last summer by the Department of Water Resources, but nothing has been released even as critical hearings are underway at the State Water Resources Control Board.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230709"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230710">Recent analysis by the University of the Pacific’s Center for Business Policy Research illustrates the problem with this approach. As described in its documents before the water board, the twin tunnels cannot be economically justified as the meager boost to water supply relative to its estimated $16 billion construction cost generates only 23 cents in benefits for each $1 in costs.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230711"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230712">While many water contractors have expressed concern over the tunnels’ cost, no major water agencies have walked away from the proposal despite the plan’s low return on investment.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230713"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230714">A closer look at the WaterFix proposed governance and authority suggests how water agencies could believe the proposal may prove a better value than modeling projections show.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230715"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230716">After construction, the critical issues for the tunnels will be operation in real time and adjustments to rules over time. The draft “adaptive management” framework is notable for placing the Collaborative Science and Adaptive Management Program created by state and federal water contractors at the center of processes to establish science priorities and to make recommendations on possible changes in water operations.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230717"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230718">In addition, the WaterFix plan states that after only a single dry year, state and federal agencies can develop a drought contingency plan that could adjust operations and regulations. These governance provisions increase the power of export water agencies to adjust operations after the tunnels are built, and confuse current efforts to evaluate environmental impacts.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230719"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230720">Advocates for the tunnels argue that much of the economic value of the WaterFix is in avoiding future cuts in water export levels to protect endangered and threatened fish species. However, such restrictions could also apply to the tunnels, as a key issue is flows past the tunnel intakes and through the Delta. Water exporters could hope that these new governance provisions, combined with spending billions to build the tunnels, shift the balance of regulations.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230721"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230722">As a result, there is widespread confusion over whether the WaterFix will actually be operated as is shown in the current models and simulations. This uncertainty, and the hope for increased water supplies, are essential to persuading water agencies to finance the tunnels.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230723"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230724">This uncertainty over how the tunnels will be operated is creating anxiety for environmentalists and those who live and farm in the Delta and upstream who note the tunnels have physical capacity to export much more water than the roughly 5 million acre-feet in the current plan.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 17px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230725"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230726">Greater clarity and transparency regarding what is proposed, its effects and responsibility for future decisions are needed. As currently proposed, the tunnels are a high-stakes gamble.</span></div><div style="margin-top: 0px; margin-bottom: 0px; font-size: 14px; line-height: normal; font-family: Helvetica;" id="yui_3_16_0_ym19_1_1473630289844_230727"><span style="font-kerning: none" id="yui_3_16_0_ym19_1_1473630289844_230728">Jeffrey Michael, an economist, is director of the Center for Business and Policy Research and professor of public policy at the University of the Pacific. Contact him at jmichael@pacific.edu. John Kirlin is distinguished professor of public policy and director of the master’s degree programs in public administration and public policy at McGeorge School of Law, University of the Pacific. He was executive director of Delta Vision. Contact him at jkirlin@pacific.edu.</span></div><div id="yui_3_16_0_ym19_1_1473630289844_230437">
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