Issues with the MWD Financing White Paper

Dr. Jeffrey Michaels, respected (and independent) economist at the University of the Pacific, recently blogged his initial reaction to Metropolitan Water District (Met) Financing White Paper.

WealthyFarmer   Here is a summary:
All the calculations and modeling in the paper relies on 3 huge assumptions which are almost certainly false.

  • It assumes farmers (and wildlife refuges) pay the vast majority of the estimated $17 billion cost. Multiple analysis and statements by various potential participants have shown this is unlikely. Drop this assumption, and Met’s cost share could triple.
  • Cost comparisons are based on an assumed average annual yield (incremental increase in water supply) of 1.3 million acre feet per year. This is a wildly optimistic estimate.

(Jan’s note – the Delta cannot lose more than 3.5 MAF without environmental collapse, as we have been seeing. Current average exports go over 5 MAF. Increasing instead of reducing exports will totally destroy the Delta environmentally, create more blue-green toxic algae, decimate salmon runs).

  • The paper describes a host of critical financing issues as still “under negotiation” or being developed. Agencies have been working on these issues for years and still have not come to a resolution. [Yet\ these issues are being deferred to the future.
  • One of the key issues is what happens if (when) some agencies choose not to participate.

    A few other notes:

    • Costs for the Contra Costa Water District settlement and new tidal marsh from the Biops do not appear to be included.
    • The other big projects from the past in the comparison chart are all urban projects. None of them were counting on farmers and wildlife refuges to pay 2/3 of the cost.
    • What about comparing the cost of tunnel water to conservation/efficiency, stormwater capture, and other more cost-effective options.
    • … and other items of concern.

    Dr. Michaels’ conclusion: “This document surely doesn’t provide the information that is required to make a public policy decision of this consequence.”

    Read his entire report at

    Others agree. Doug Obegi, NRDC blogs that MWD’s WaterFix Cost Assessment is Inaccurate and Inadequate.

    Restore the Delta blog.

    Cartoon drawing from the book “The Fable of the Farmer and the Fish”, by Jan McCleery, Illustrated by Steve Greenfield. Available on Amazon. Amazon-Fable

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