Dr. Jeff Michael: 3 Major Assumptions MWD Makes in White Paper #3

In Case You Missed It:
Dr. Jeff Michael on the 3 Major Assumptions MWD Makes in Third White Paper

Restore the Delta’s full detailed response to the recently-released Metropolitan Water District of Southern California’s third CA WaterFix white paper will come in the days ahead.
In the interim, Dr. Jeff Michael has published his insights into the third white paper on his blog, Valley Economy. In the blog, he explains that MWD’s financial calculations and cost modeling of the CA WaterFix project rely on three assumptions:

  1. “It assumes farmers (and wildlife refuges) pay the vast majority (approximately 2/3) 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.”


  1. “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.  The WaterFix official documents (permit application) is based on an annual average yield of 225,000 acre feet.  Using more realistic and correct yield estimates increases the incremental cost of the project by a factor of 6…At minimum, board members should demand/expect to be shown cost comparisons over a range of plausible project yields – not just the base scenario.”


  1. “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.  The paper assumes all these issues will be handled in way that is satisfactory to the board.  Ratepayers, taxpayers and board members should be very uneasy about the way these issues are being deferred to the future.”

To read the entire post, click here.

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