Wednesday, April 27, 2011

New Metropolitan Water District Presentation on Delta Costs

I was looking for recent MWD cost analysis on a canal, and found this Powerpoint presentation from a MWD committee meeting that was today.  At the risk of reading too much into a Powerpoint without hearing the presentation, I found several parts very interesting compared to what I saw from MWD last year. 
1.  I have not seen any water contractors talking about incremental (marginal) costs of Delta conveyance before (see slide 36).  That is a very positive development.  Note that the incremental, capital only costs of a tunnel are a whopping $518/af.  Based on the other slides, it is reasonable to add another 10-15% on top of that for operating and mitigation costs, and $250-$300 per af (according to the slide) to move the water from the pumps.  That puts the incremental cost of the water provided by the Delta conveyance to MWD at $800-$900 per af.  They may be willing to pay that, but it is definitely pushing the limits, and they won't be able to pitch in more money for habitat or cross-subsidize ag. users at those levels.

2.  MWD is only allocating proportional costs to itself, thus these would be the same costs that would apply to agricultural contractors.  It's hard to see how ag could pay these costs.

3.  The presentation makes the small tunnels look pretty bad, especially the cut and fill idea.  As a non-engineer, I wonder why 2 tunnels are necessary for 3,000 or 6,000 cfs?  That would be a question I would ask if I were sitting in the room instead of reading Powerpoint on the internet, as I have heard conflicting information on this.

4.  Will the BDCP backtrack to the original East surface canal because of the tunnel costs?  I would expect that question to be on the mind of any MWD board members watching this presentation, especially when they start seeing the costs displayed in incremental/marginal terms instead of average costs.

Update  4:10 P.M.:

I have gotten a half dozen email comments from smart people today on this post.  Use the comments, don't send me email.  That way everyone can benefit from your wisdom. 

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