2012-2014 BDCP Blog


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Correcting Stubborn Myths Part II

By Karla Nemeth, California Natural Resources Agency

  1. Myth: The BDCP doesn't include financing costs or debt service payments over the 50-year term of the project.

    Fact: Ultimately, before final decisions are made about whether to proceed with the BDCP (Plan), financing costs for the project will be known and part of the public discussion. Right now, BDCP is focusing on capital, operations, and maintenance costs to determine the long-term benefits of securing this water supply source and restoring the Delta’s ecosystem. The financial planning included in the public draft BDCP is a proposal that the state and federal agencies will evaluate to determine whether funding would be available to implement the Plan.

    Eventually, the public water agencies that benefit from the plan will need to determine detailed financing plans that include debt service for consideration by their elected board members at public meetings. The primary cost of debt financing is the transaction costs of selling bonds. For large projects, these costs tend to average less than 1 percent of the face value of the debt. When purchases are financed by debt, like mortgages or car payments, some are tempted to calculate the total cost of the purchase by simply adding up the stream of debt payments over the life of the loan. This is a mistaken way to think about capital costs. Debt financing spreads out the costs of projects over time, adding interest costs to the repayment of principal. Counteracting this effect is the time value of money, or the rate at which consumers compare money available now to money available at some later date. If the interest rate used to discount the value of money available in the future is close to the interest rate on debt, then these two effects cancel out.

  2. Myth: Major public works projects always far exceed initial cost estimates.

    Fact: Cost overruns are a risk inherent in all infrastructure projects large and small. The BDCP’s cost estimates have been prepared with consideration for that risk, among others, and contain appropriate contingencies and conservative cost assumptions. For example, the budget for BDCP conveyance facilities (Conservation Measure 1) includes a 37 percent contingency. As project elements are further designed, their costs will be refined. The estimated costs of the BDCP are summarized in Chapter 8, Implementation Costs and Funding Sources.

    The BDCP water facilities and portions of habitat restoration would be funded by state and federal water contractors whose ratepayers (businesses and residents) receive water from the Delta. The history of water contractors funding large water infrastructure projects of the scale of the BDCP provides evidence that funding the BDCP is feasible.

  3. Myth: The water exporters don't want to pay for the conservation measures they need to get the project permitted, so they are expecting taxpayers to fund them with a water bond.

    Fact: The BDCP is required to mitigate its impacts in compliance with the federal Endangered Species Act (ESA). The BDCP is also required to provide for the conservation and management of its native species covered by the plan to comply with the state Natural Community Conservation Planning Act (NCCPA). The BDCP conservation strategy is designed to meet both laws.

    State and federal water contractors will pay a share of the costs for 11 out of 22 conservation measures, as well as mitigation for the effects of water facility construction that are intended to improve conditions for covered species. (See BDCP Chapter 8, Table 8‐41 for state and federal water contractor mitigation funding estimates).

    Public funding would pay for the conservation measures or portions thereof that will produce statewide public benefits, as described and quantified in the Draft Statewide Economic Impact Report. These measures include habitat restoration, protection, enhancement and management, species and ecosystem monitoring and research, and program administration. These actions have a wide variety of public benefits, including benefits to the overall ecosystem, recreation, greenhouse gas reductions, and others (see BDCP Chapter 8, section and Table 8-46).

    Public funding would come from a variety of sources, including the water bond slated to go before voters in November 2014. This water bond is projected to fund $1.5 billion of BDCP costs, or 6.1 percent of the total costs of the plan. Under the plan, habitat restoration would occur during the first 40 years of the 50-year permit term. Funding for the first 10 years of restoration can come from a variety of sources, including the participating state and federal water contractors, federal appropriations, state and federal grants, and the water bond. If the water bond doesn’t pass in 2014, restoration would still occur using other funding sources.

  4. Myth: The BDCP cannot guarantee reliable water supplies.

    Fact: Any project that relies upon naturally variable precipitation will be forced to contend with supply fluctuations. That is true for the State Water Project (SWP) today and will continue to be true with or without the BDCP. What the BDCP can do is improve our ability to make the most of the water that is available through operational flexibility that would enhance our ability to move water and protect species while reducing the risk of natural disasters and climate change.

    The BDCP estimates average water supplies of 4.7 million acre-feet to 5.6 million acre-feet in a year (one acre-foot is about as much water as two California households use each year). This is about the same average amount of water exported through the Delta right now. Water operations would vary depending on the hydrologic conditions (e.g., water year type, actual Sacramento River flows, fish presence), but would always include a required level of Sacramento River flow passing the intakes before water could be diverted. Under all conditions, operational criteria require gradual ramping up of diversions and do not interfere with major river flows. Analysis of the water supply reliability benefits and estimated annual water deliveries of BDCP are included in BDCP Chapter 9. The full range of operational criteria by water year type can be found in Chapter 3: Conservation Strategy, Section 3.4 and the corresponding appendices/tables of the public Draft BDCP.

  5. Myth: The BDCP fails to analyze possible effects on San Francisco Bay.

    Fact: The BDCP does indeed analyze the effects of the project on San Francisco Bay and other water bodies downstream of the Delta.

    Analyses found that because there are no project diversions downstream of the Delta, the only effects of the project on the San Francisco Bay Area would be indirect and related to flow. According to the Department of Water Resources’ Delta Atlas, average tidal flow through the Golden Gate Bridge is 2,300,000 cubic feet per second (cfs) and average tidal flow at Chipps Island is 170,000 cfs. The maximum amount that BDCP would change flows downstream of the north Delta diversions is 9,000 cfs (and most of the time it would be much less). Therefore, at most, BDCP diversions represent only 5 percent of the flows at Chipps Island or less than 0.4 percent of tidal flows at the Golden Gate Bridge. Effects within San Francisco Bay would be within this range, diminishing greatly away from the Delta. Because these changes in flow are so small compared to the tidal range within the Bay, the plan concludes that there would be no effect of BDCP on the San Francisco Bay ecosystem or its native species.

  6. Myth: The agricultural contractors in the San Joaquin Valley will get about two-thirds of the water, but they can’t afford the extra costs, so urban ratepayers will be expected to pay for most of the BDCP.

    Fact: A central premise underpinning the BDCP is the idea that the beneficiaries of the project should pay for the project. The goal of water supply reliability is important to both agricultural and urban water users. Every public water agency involved in pursuing the BDCP is managed by a board of elected or appointed members who have a fiduciary responsibility to the public. These board members must make business decisions that are in the best interest of their ratepayers, and they are held accountable for those decisions at public board meetings open to their ratepayers and in public elections for their positions.

    Water reliability goals apply to agricultural uses as well as urban and municipal. The BDCP Environmental Impact Report/Environmental Impact Statement (EIR/EIS) provides information relevant to this issue (see Response to Reduced Water Supply, Appendix 5B of the BDCP EIR/EIS, Demand Management, Appendix 1C of the EIR/EIS and Chapter 30 Growth Inducement and Other Indirect Effects).

  7. Myth: The project will take 9 to 10 years to build, during which time the contractors will be expected to pay for water they aren't getting.

    Fact: The state and federal water contractors are funding the BDCP water facilities with the understanding that inaction would fail to meet the needs of California businesses, homes, and farms. The BDCP proponents are committed to the 10-year construction schedule in order ensure reliable water supplies for the 25 million Californians who will depend on it after construction is completed.

    If it is approved, the proposed project will be financed in much the same way that today’s State Water Project capital facilities were funded. Current State Water Project contractors’ water supply charges include both fixed costs (e.g. financed capital expenditures) that must be paid irrespective of how much water is delivered and variable costs (e.g. power) that vary in proportion to the amount of water delivered.

  8. Myth: The Brown Administration wants to build the tunnels before the conservation measures are all in place, and they won't know until after they begin to operate them whether the tunnels will actually be better for endangered species.

    Fact: The BDCP conservation measures include actions to improve flow conditions, increase aquatic food production, restore habitat for covered species, and reduce the adverse effects of many biological and physical stressors on those species. All mitigation for the direct effects of the tunnels will be in place prior to the operation of the new water facility. A substantial portion of the conservation will also be in place by this time. The rest of the conservation strategy will be implemented over the remaining 40 years of the 50-year plan.

    The agencies that have spent the past 7 years developing the BDCP recognize that uncertainty exists regarding the understanding of the Delta ecosystem and the likely outcomes of implementing the conservation measures. It is possible that some of the conservation measures will not achieve their expected outcomes, while others will produce better results than expected. As a component of the conservation strategy, the adaptive management and monitoring program has been designed to use new information and insight gained during the course of BDCP implementation to develop and potentially implement alternative strategies to achieve the biological goals and objectives. The adaptive management process describes how changes to the conservation measures may be made in order to improve the effectiveness of the BDCP over time. An Adaptive Management Team will be established and will have primary responsibility for administration of the adaptive management and monitoring program. It will also have primary responsibility for the development of performance measures, effectiveness monitoring and research plans; soliciting independent scientific review; and developing proposals to modify a conservation measure. The recommendations of the Adaptive Management Team will help ensure that the BDCP is implemented consistent with the Endangered Species Act and the Natural Community Conservation Planning Act permit issuance criteria.

  9. Myth: The BDCP will take the Delta's largest supply of fresh water and make it unavailable to fish, other species, and people.

    Fact: The proposed water delivery facilities would only be permitted to operate in compliance with predetermined regulatory protections, including river water levels and flow, based upon how much water is actually available in the system, the presence of threatened fish species, and water quality. Water operations would vary depending on the hydrologic conditions (e.g., water year type, actual Sacramento River flows, fish presence), but would always include a required level of Sacramento River flow passing the intakes before water could be diverted. Under all conditions, operational criteria require gradual ramping up of diversions and do not interfere with major river flows. The BDCP anticipates that annual water diversions from the Delta would be within 10 percent of the historic, 20-year average.

  10. Myth: The BDCP will take most of the Delta agricultural land out of cultivation, with no guarantee that habitat creation will work the way it is described in the Plan.

    Fact: Based on preliminary programmatic analyses used for the purpose of developing Chapter 3, Conservation Strategy of the BDCP and Chapter 12, Terrestrial Biological Resources of the BDCP EIR/S, approximately 40,000 acres of important farmland (out of out of approximately 591,000 acres of agricultural land in the study area) may be permanently impacted by the BDCP habitat restoration efforts implemented during the next 50 years. Further environmental analysis on site-specific restoration projects will assess these impacts in more detail.

    The BDCP recognizes the scientific uncertainty about whether implementing habitat restoration will result in the desired biological improvements to the Delta’s native species. As a component of the conservation strategy, the BDCP includes an adaptive management and monitoring program to incorporate new scientific information during the Plan’s implementation. The adaptive management program will develop and implement alternative strategies as needed to achieve the biological goals and objectives. Additional information on the process for developing the BDCP conservation measures and an implementation schedule can be found in Chapter 6 of the BDCP, Chapter 31 of the BDCP EIR/EIS, and Appendix 3G of the BDCP EIR/EIS.

  11. Myth: The BDCP will implement new diversion points/fish screens in the north Delta to avoid fixing the problems at the existing south Delta facilities.

    Fact: The BDCP proposes to move the primary point of diversion to the north Delta to reduce the impact of project operations on Delta flows and reduce reliance on the south Delta facilities. DWR is developing the designs for the North Delta intakes in consultation with state and federal fish and wildlife agencies, which will include physical barriers and modern fish-screening standards. Fish screen criteria is described in the Intake Location Analysis, Appendix 3F of the BDCP EIR/EIS.

    The current location of the south Delta point of diversion is a cul-de-sac-like environment where fish can accumulate and become easy prey for other fish and birds, regardless of the fish screening technology. The Department of Water Resources (DWR) and California Department of Fish and Wildlife (CDFW) believe that the health of native Delta fisheries is better served by a water delivery system in the north Delta with modern fish screens, combined with reduced pumping from south Delta channels. In addition to being technically advanced, the proposed north Delta screens will allow fish to pass by and continue on their migratory journey.

  12. Myth: The draft environmental documents for BDCP identify hundreds of adverse impacts, including 48 that are called "significant and unavoidable," which means that the water contractors paying for the project won't be expected to fix or mitigate them.

    Fact: Temporary construction impacts include noise, visual, and transportation, among others. The construction-related impacts are detailed in individual resource area chapters in the Draft EIR/EIS.

    The BDCP’s significant and unavoidable impacts are not “unmitigated.” In many cases, significant and unavoidable simply means that the lead agencies cannot be certain that the proposed mitigation will succeed in mitigating an impact to a level below significance. For example, several of the traffic mitigation measures are contingent on reaching agreements with local transportation agencies to make the necessary improvements to mitigate for significant impacts. Because these agreements require that agencies other than DWR take specific actions, it is not certain that these agencies will be able to enter into mitigation agreements and make such improvements prior to an impact occurring. In these cases where subsequent agreements must be reached with third parties, impacts are deemed significant and unavoidable.

    In addition to mitigation measures, BDCP contains measures called environmental commitments (outlined in Appendix 3B of the BDCP EIR/EIS) that describe additional plans and processes that are designed to minimize project impacts. For example, Chapter 19, Transportation includes a traffic study of the Plan area impacts from construction. To minimize traffic impacts, best management practices will be implemented (see BDCP EIR/EIS Appendix 3B, Environmental Commitments). Similarly, noise impacts are minimized and mitigated as described in Chapter 23 and water quality impacts are addressed in Chapter 8 of the EIR/EIS.

  13. Myth: Marinas will be dry-docked and navigation will be restricted as water elevations are lowered, first for construction and later for operation of the project.

    Fact: Chapter 15 of the EIR/EIS details impacts to recreation during construction. No marinas were identified as impacted (i.e. dry-docked). Water elevations are not expected to change in a significant way as a result of either construction or operation of the proposed project. Temporary recreational impacts include noise, visual, and the implementation of slow boat zones due to construction of intakes, siphons, and barge unloading facilities, which will cause some impacts to high-speed recreation near the construction sites. All boating navigation will be mitigated to allow for boat passage. During operation of the BDCP water facilities, the head of Old River operable barrier will include a boat lock to provide passage for boaters.

    In the long-term, the BDCP is expected to enhance recreational opportunities in the Delta. The environmental commitments (see Appendix 3b of the EIR/EIS) for recreation include possible improvements to existing recreational facilities, a barge management plan, and broader best management practices that will reduce impacts to recreational boating.

  14. Myth: Recreational and commercial fishing will suffer from reduced flows and reduced water quality in the Delta and the Bay.

    Fact: Recreation is identified as a covered activity in the BDCP. The BDCP includes actions to enhance recreational boating opportunities by implementing “other commitments” that enhance Delta recreation facilities (see Appendix 3B of the EIR/EIS) and implementing mitigation measures regarding recreational coordination, notification, safety considerations, and alternate recreational routes.

    The BDCP would be permitted to operate only with regulatory protections, including river water levels and flow, which would be determined based upon how much water is actually available in the system, the presence of threatened fish species, and water quality standards. Water operations would vary depending on the hydrologic conditions (e.g., water year type, actual Sacramento River flows, fish presence), but would always include a required level of Sacramento River flow passing the intakes before water could be diverted.

  15. Myth: The BDCP does not meet the 2009 Delta Reform Act goal of reduced reliance on the Delta.

    Fact: The Delta Reform Act defines the “coequal goals” as providing a more reliable water supply and protecting, restoring, and enhancing the Delta ecosystem (Water Code Section 85054). Inherent in the coequal goals are eight objectives for managing water for environmental resources, including protecting the uniqueness of the Delta, improving water conveyance, and establishing a new governance structure (Water Code Section 85020). The policy of the State of California is to reduce reliance on the Delta in meeting California’s future water supply needs through a statewide strategy of investing in improved regional supplies, conservation, and water use efficiency. Each region that depends on water from the Delta watershed shall improve its regional self-reliance for water through investment in water use efficiency, water recycling, advanced water technologies, local and regional water supply projects, and improved regional coordination of local and regional water supply efforts.

    The BDCP EIR/EIS Appendix 1C, Demand Management describes the State’s effort to work with local water agencies to improve regional water management and integration of resources consistent with this policy.

  16. Myth: The BDCP is out of money, and needs an additional $1.2 billion more for planning.

    Fact: The cost of planning for the BDCP, including writing the plan, preliminary engineering and environmental review, has been conducted within the budget projected in 2009 and established in 2012. That budget, barring significant delays, will cover the cost to bring the project to the final EIR/EIS, which is anticipated for late 2014 at the earliest. The $1.2 billion is an expected expense and is included in the $14.5 billion design and construction estimate for the proposed water conveyance system. The figure includes money for project engineering and design and other preconstruction activities. The funding is not a cost overrun for planning or design.

  17. Myth: Preliminary engineering is only at about a 10% level and should be much further along.

    Fact: The level of design that is required to support environmental analysis is not the same as that required to begin construction. The engineering conducted to date is that which has been necessary to support the environmental analysis and Plan development. Additional design and engineering work would be required following project approval before construction could commence.

  18. Myth: Spending money on the BDCP will mean that there won’t be enough money to do other water projects, like desalination or recycling.

    Fact: The BDCP serves as one part of California’s overall water portfolio. The State Water Action Plan, released by the Brown administration in November, outlines a clear path for addressing California’s overall water needs, including storage, desalination, water conservation, and regional self-sufficiency. The BDCP will not eliminate the opportunity for additional water projects. In fact, The Safe, Clean, and Reliable Drinking Water Supply Act of 2012 includes funding for a variety of activities – other than BDCP - that would improve the quality and reliability of California’s water supply (for more information, see California Water Code section 79700).

    Local public water agencies each manage their own diverse supply portfolio. Public water agencies are investing in the BDCP because their leaders see it as an affordable way to secure an existing water supply against future risk, including climate change and earthquakes. Like the State, they continue to be committed to developing other water supply methods that are appropriate for their local circumstances. California needs both the BDCP and investments in other regional and local projects to help cope with climate change and satisfy expected growth in demand.

  19. Myth: The BDCP will cause species extinction.

    Fact: The BDCP is a Habitat Conservation Plan and Natural Community Conservation Plan, which are regulated by federal and state laws and meant to conserve threatened and endangered species. Made up of 22 individual conservation measures, the BDCP seeks to implement up to 145,000 acres of habitat restoration. Shaped by more than 200 biological goals and objectives, the plan intends to protect and promote the recovery for all 56 species it covers. In order for the state and federal fish and wildlife agencies to issue their endangered species permits, they must find that BDCP does not cause the extinction of any of the covered species and in fact contributes to the recovery of those species. More information on the net beneficial effects for covered species can be found in BDCP Chapter 5 (Effects Analysis).

  20. Myth: The BDCP tunnels are worthless.

    Fact: The BDCP tunnels would secure reliable drinking supplies for 25 million Californians from the Bay Area to San Diego and water for 3 million acres of farmland for the next half century.

    The BDCP is estimated to:

    • Protect and save more than 1 million jobs, including 60,000 farm jobs
    • Generate more than $84 billion in increased economic productivity over the life of its permit
    • Protect $10 billion in farm output
    • Protect against a $1 billion increase in consumer food costs.

    The BDCP also represents the most comprehensive, science-based effort to date to restore the Delta ecosystem, protect 56 threatened or endangered species, and plan for climate change and natural disasters. More information on the BDCP economic benefits can be found in the Draft Statewide Economic Impact Report. More information on the BDCP benefits to the Delta ecosystem can be found in BDCP Chapter 3: Conservation Strategy. More information on BDCP’s climate change adaptation can be found in BDCP Appendix 2C: Climate Change Implications and Assumptions and in the EIR/EIS Chapter 29: Climate Change.

  21. Myth: The BDCP will destroy salmon.

    Fact: Today, approximately 95 percent of juvenile San Joaquin salmon and 60 percent of Sacramento River Chinook salmon do not survive their migration through the Delta. The existing Delta habitat relied on by salmon has been severely degraded, drawing in predators and limiting food supplies. The BDCP would contribute to salmon recovery by improving the health of the Delta ecosystem. This, in turn, will create conditions in the Delta that will foster a more resilient salmon population better suited to withstand adverse and unpredictable conditions in the future, such as climate change.

    A recent UC Davis study in the Yolo bypass highlights the significant benefits to salmon by providing rearing habitat on floodplains. The BDCP conservation measures (especially Conservation Measure 2) specifically address salmon needs through the following measures:

    • New water diversion points on the Sacramento River designed to effectively screen out young fish
    • Increased production of food supplies
    • More and better habitat
    • Improved water quality
    • Improved flows
    • Reduced predation

    Performance of the BDCP restoration actions will be guided by specific and measurable biological goals and objectives established for salmon, as well as the 55 additional species covered by the Plan.

  22. Myth: The Delta is a non-seismic region.

    Fact: There are no records of an earthquake causing levee failure in the Sacramento-San Joaquin Delta, and long-time residents may never have felt an earthquake. But that does not mean the region is not seismically active. Roughly 160 years of experience with Delta levees is not enough time to truly understand seismic hazard, and the span of a person’s life is essentially meaningless to the issue. Consider two recent events as an illustration:

    • A magnitude 7 earthquake struck Haiti in January 2010, killing over 300,000 people. The previous large earthquake in the region occurred in 1770.
    • The 2011 magnitude 9 Tohoku Earthquake generated strong shaking and a deadly tsunami that devastated Japan. The previous event of this size occurred in 869 AD.

    Both of these earthquakes were preceded by similar events hundreds of years prior, long before any living person was born. To characterize seismic hazard based on the experiences of local residents or written history in a place as recently settled as California would be dangerous. Instead, scientists try to understand the hazard by characterizing earthquake faults that might shake a particular site, and then estimating the effects of various earthquake scenarios (i.e., ground shaking, tsunami).

    Thorough seismic hazard analyses have been performed in the Delta by highly qualified scientists, and we know with certainty that the Delta has been strongly shaken in the past and will be strongly shaken in the future. We don’t know precisely when strong shaking will occur again, but we know it will happen eventually and we can characterize the probability that a certain level of shaking will be exceeded in a particular year. We also know that earthquakes are rare events, and the lack of strong shaking during the existence of the man-made levees and the lifetimes of local residents is not surprising.

  23. Myth: Uncertainty about the seismic risk argues for doing nothing to address it.

    Fact: Some would argue that because the seismic risk in the Delta is uncertain, there is no need to try to mitigate such an event. Although the seismic hazard is uncertain, we can quantify that uncertainty to help guide decision-making. For example, according to the Delta Risk Management Strategy report published by the California Department of Water Resources in 2009, there is a one percent annual probability that ground shaking will exceed 0.15 g near the western edge of the Delta. This level of ground motion could induce liquefaction in Delta levees, thereby causing a breach. Not knowing when or where an earthquake will strike does not justify inaction.

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