Years of lobbying for what the Brown administration dubbed the WaterFix project had produced more indifference and outright opposition than support. The $16.7 billion plan would build two 35-mile-long, 40-foot-high tunnels to take water south from the Sacramento River to the State Water Project pumps in the town of Tracy. The governor argued that this would sharply reduce the intermittent heavy pumping that played havoc with endangered species in the fragile Sacramento-San Joaquin River Delta and would firm up supplies both for Central Valley farmers and the 20 million-plus residents of Southern California.

But in September, the board of the Westlands Water District – which serves 600,000 acres of farmland in King and Fresno counties and is the largest U.S. agricultural district – voted 7-1 against providing about $3 billion for the project. Westlands officials trashed claims made for WaterFix, questioning whether it would actually stabilize the Delta ecosystem and predicting cost overruns.

In November, the Trump administration announced that the federal government would not provide any financial assistance to get the project built. While the Interior Department statement was not unexpected, it contributed to the sense the WaterFix proposal was foundering. By February, Brown administration officials had put the word out they would accept building only one tunnel under the delta and adding a second later.

MWD backed scaled-back project, then changed mind

The death of the original plan appeared confirmed on April 2 when officials with the Metropolitan Water District of Southern California – the giant, politically powerful water wholesaler serving 19 million people – issued a memo expressing support for the one-tunnel option. The rationale: a lack of a consensus for the two-tunnel plan among the water districts south of Sacramento that would need to pay for the project.

But after intense lobbying by the Brown administration, on April 10, the MWD board voted by a 3-to-2 margin to endorse the two-tunnels project and to agree to pay for about two-thirds of the tab – about $10.8 billion. The weighted vote, based on the size of individual agencies, came over the objections of the MWD board’s single largest member, the San Diego County Water Authority.

Momentum continued to build last Wednesday when the board of the Santa Clara Valley Water District – the biggest water agency in Silicon Valley – voted 4-3 to commit its 2 million ratepayers to pay up to $650 million for the project, or nearly 4 percent of the total tab. Santa Clara officials had previously narrowly opposed providing funding.

On Thursday, Brown hailed the decision in a speech to a conference of the Association of California Water Agencies in Sacramento. But the governor also warned that the project still had big obstacles that went beyond getting more water districts to agree to share construction costs. He noted that state and federal regulators still had yet to issue required permits.

On this front, WaterFix may face more skepticism in Brown’s backyard than in Washington. As CalWatchdog reported last year, the Trump administration gave a key senior Interior Department post to Colorado lawyer David Bernhardt, a veteran of California water wars and a critic of the federal government’s traditionally high-profile role in land-use decisions in Western states.

Meanwhile, the California Water Resources Control Board has sided with environmentalists in a long list of previous decisions. In filings with the state board, Restore the Delta and several other environmental groups have challenged the governor’s project on its central claim: that it improves the health of the Delta ecosystem.

Even if the state and federal permits are granted, the tunnels plan still faces hurdles. The Bay Area News Group reported last week that more than two dozen state and federal lawsuits had been filed against the project.

Visitors to Rough & Tumble, the insider-beloved news aggregator devoted to California politics and government, generally see two or three flashing ads under its masthead. This month, two are always on view. One touts the Cabinet Report education website. The other asks, “Is the Metropolitan Water District of Southern California Over-Charging You?” Those who click on the latter ad are taken to a website run by the San Diego water agency, mwdfacts.com, packed with unflattering reports about MWD, its leaders and its history.

You could call it a 21st-century version of “Chinatown” — hardball water politics going places no one has gone before.

MWD targeted San Diego officials at least twice

The MWD-San Diego feud began in the early 1990s when San Diego officials responded to being squeezed on supplies during a severe drought by seeking to hugely diversify where they got water, starting with obtaining some of the massive allotment going to agriculture in Imperial County. MWD took this decision from its largest client as an outrageous affront and launched what the Los Angeles Times later called a “clandestine effort to discredit San Diego County water leaders,” a well-funded campaign in which communications firms were paid hundreds of thousands of dollars to push stories that the county agency was betraying its residents by forcing them to pay more for water than necessary.

San Diego County Water Authority leaders also alleged that MWD had launched another conspiratorial campaign against the agency more recently. In 2014, documents obtained by the authority showed MWD had orchestrated one of its member agencies’ public-relations campaign against the San Diego agency while denying involvement.

The San Diego County Water Authority was 95 percent reliant on MWD supplies in 1991. This year, it says 49 percent of the water it delivers to 3.2 million people comes from MWD, and that figure will drop even more in coming months when the Carlsbad desalination plant, the largest in the Western Hemisphere, goes online. MWD has never wavered from its primary criticism of the San Diego approach: that it forces customers to use much more expensive supplies without solid reasons.

Filling reservoirs during a drought

But the San Diego agency’s record in dealing with the state’s lengthy drought has made charges of incompetence tough to stick. The only reason the San Diego region is making big cuts in water usage is because Gov. Jerry Brown issued a statewide decree. The San Diego County agency announced this spring that it believed it had supplies to cover 99 percent of normal demand in fiscal 2016, which started July 1. This fact, combined with the state-mandated reduction in water use, has led to an unusual phenomenon: One of California’s largest water agencies is steadily filling its reservoirs in the middle of a historic and destructive drought.

The San Diego agency has also enjoyed legal success against MWD after years of claims of systematic overcharging. In a preliminary judgment issued in July and ratified in August, a San Francisco Superior Court judge awarded the the county water authority $188.3 million plus interest for MWD overcharges from 2011-2014. An MWD appeal is considered a certainty.

California is facing yet another drought-caused water and energy shortage from an unexpected source.  Hoover Dam’s hydroelectric power may have to be curtailed if the water level drops below 1,000 feet, an elevation it last reached in May 1936, when the reservoir was still being filled.

The Scripps Institute of Oceanography estimated there is a 50 percent chance Hoover Dam reservoir could drop too low for power production. And according to the Daily Mail:

“Previously, the lowest levels were about 1,082 feet in November 2010, and 1,083 feet in April 1956 during another sustained drought.

“The dropping level since the reservoir was last full in 1998, at just under 1,296 feet above sea level, has left as much as 130 feet of distinctive white mineral ‘bathtub ring’ on hard rock surfaces surrounding the lake.”

As of Oct. 2014, Hoover Dam’s water level was 1,082.79-feet, down from 1104.04 a year earlier, as shown in this graph:

Hoover Dam’s hydroelectric energy powers five huge pumping stations of the Colorado River Aqueduct, which conveys water from the Colorado River to Southern California.  The dam’s electricity is sold to the Metropolitan Water District of Southern California at a wholesale rate of $20 per megawatt-hour.

By comparison, the average price for electricity in California as of Sept. 2013 was $17.3 per megawatt-hour.

If Hoover’s cheap hydropower were unavailable, the MWD would have to go into the spot market to buy power.  Spot power market prices for Nov. 21 for peak hours ranged from $40.50 per megawatt-hour to $51 per megawatt-hour.

Off-peak hour prices ranged from $29.75 to $41.80 per megawatt-hour (see Energy News Data Western Price Survey, Nov. 21, 2014).  So electric prices could double for Southern California.

The 2,080-megawatt Hoover Dam hydroelectric power plant generates power for over 1 million people in Arizona, Nevada and Southern California.

Race to install new hydro turbines

The U.S. Bureau of Reclamation is on a race to install new wide-head turbine runners for Hoover Dam at a cost of $11.6 million.  If the new turbine runners can be installed before May 2016, the hydropower stations could draw water from as low as 950 feet.

There are 17 hydroelectric generators at the Hoover Dam site.

Annual deliveries of water through the Colorado River Aqueduct are 1,200,000 acre-feet, or enough water for about 7.2 million people.

According to Utility Dive:

“The iconic Hoover Dam went into service in 1936 to manage the Colorado River water supply for cities of the Southwest and to irrigate the region’s farmland, and the hydroelectric power revenue, which makes the Dam a self-sustaining enterprise, is a byproduct of those services.

“The drought has affected federal dams and their reservoirs across the Southwest, including the Glen Canyon Dam and Lake Powell in northern Arizona which, for the first time, reduced the amount of water released to Lake Mead, from 8.23 million acre-feet to 7.48 million acre-feet, further hampering Hoover Dam’s power production.”

The dam’s low water levels are another problem the state will have to cope with as the record drought continues. As CalWatchdog.com has reported, the incoming Republican majority in the U.S. Senate will be taking over the crafting of policy in that body.

However, California’s two powerful Democratic Senators, Dianne Feinstein and Barbara Boxer, will continue to retain significant clout even though they will be in the minority for the first time in eight years. Indeed, it was their fellow Democrats who put the kibosh on compromise legislation Feinstein had worked out with House Republicans.

The Hoover Dam water crisis only adds more urgency to crafting a new water bill in 2015.

So all you can do is groan when Dennis Cuff of the Contra-Costa Times reports on an insanely generous and pointless BART employee perk and calls it “little-known.” Why is it little-known? Because there is such consistently horrible coverage of how government bodies work.

“In a little-known perk at a transit system struggling to control the cost of benefits, BART gives its employees and their families free travel passes on its system — even after they retire.

“Although other Bay Area transit agencies offer their own free-ride programs, BART’s is among the most generous. It provides the same lifetime travel benefit to board members and their families, the only one of seven surveyed Bay Area transit operators to do so.

“The cost? All together, BART forgoes more than $2.1 million a year for the free rides — $741,000 of it for families.

“At a time when labor-management strife may lead to a second strike this summer, some critics say the extensive free travel policy is part of a tradition of overly generous benefits at BART.

“‘It sends a wrong signal that in a time when fares continue to go up there are people who have never worked for BART who ride for free,’ said Fred Wright Lopez, a Lafayette attorney and unsuccessful BART candidate last fall. ‘It’s an insult to BART’s riders.’“

Bosses benefit from lavish treatment of rank-and-file

This cavalier giveaway reflects another central truth about BART, many big transit agencies and scores of water districts around California — especially the gigantic Metropolitan Water District of Southern California. The bosses don’t care if the rank-and-file get absurd salaries and benefits — because they’re getting even more absurd salaries and the same or better benefits. Who looks out for taxpayers inside BART? Nobody.

Which brings us back to how fundamentally horrible coverage of government is in California. I’ve lived here since 1990 and been a voracious consumer of newspapers the whole time. I have read thousands and thousands of stories about budget decisions at water agencies and other special districts, literally millions and millions of words.

Yet far less than 1 percent of these stories noted that the upper management has a substantial personal windfall to expect if it goes along with raises for rank-and-file workers. In most of these special districts, the board of directors is completely dependent on the staff for information and institutional history.

Instead of a sharp MBA type diagnosing this fundamental disincentive to control spending and district leaders adopting obvious reforms, we have a Senior Staff Analyst III testifying that automatic step raises on top of regular raises are the norm, and always have been, and the special district’s general manager nodding in agreement.

Fix is in from the top-down

There’s no need for a public employee union fix. The fix is in from the top-down.

Isn’t this important? Of course. But how often have you seen this explained? Just about never.

Thanks, state press corps. Thanks so very much.

By Wayne Lusvardi

The water wars are back.

During World War II, President Franklin D. Roosevelt issued an executive order forcing San Diego to join Los Angeles and other cities in Southern California in sharing the costs of the same water canal. That began a 65-year water war that still continues. It has mostly been a cold war.  But lately the war has been heating up.

The San Diego County Water Authority is studying whether to break off from the Metropolitan Water District of Southern California, a confederation of 27 water agencies, and build its own aqueduct to convey water from the Colorado River.

This war is not a shooting war, however.  It is mostly being fought in the courts.  San Diego is also waging an anti-propaganda war against Metropolitan in the media.

War Over Water Wheeling Rates

The San Diego vs. Los Angeles water war is being waged over fair water wheeling rates.  Wheeling means to convey water through unused capacity in an aqueduct or pipeline.

San Diego contends that the Los Angeles County “cabal” of water agencies is shifting an unfair proportion of its total system costs onto San Diego. This war has political overtones, as Los Angeles County has historically been a Democratic Party stronghold and San Diego a bastion of the Republican Party.

San Diego first took water deliveries from Metropolitan in 1947.  By 1949 it was receiving half of MWD’s water allocation from the Colorado River.  Now San Diego receives about 23 percent of MWD’s water allocation.

An acre-foot of water is a football-field size of water one foot high. It is enough for two urban households per year, or one third of an acre of irrigated farmland.

The San Diego vs. Los Angeles water war is not being fought over current water rates, but future water rates.  According to San Diego, its residents overpaid Metropolitan last year by $38 million. However, by 2021, it says the annual overcharge will soar to $217 million.

Metropolitan says its water wheeling rates are based on the total system costs of a socialized water system.  Metropolitan has previously prevailed over San Diego in a prior court case on water-wheeling rates.

The principal and interest on a bond to build a new $1.4 billion to $1.9 billion water canal from the Colorado River would be around $99 million to $135 million per year.

The original cost to build the Colorado River Aqueduct was $220 million.  Adjusted for historical inflation at 4 percent per year, that would indicate about $3.85 billion today.

All-American Canal Has No Pumping Costs

A new water canal to San Diego would probably convey water by gravity flow. Metropolitan’s Colorado River Aqueduct has five huge pumping stations to lift water over remote mountain chains.

By routing the Colorado River Aqueduct over the mountains, water ratepayers in Los Angeles ended up paying for the construction of the Hoover Dam and its hydroelectric power station.

Conversely, farmers built the Coachella and All-American canals to take their allocation of water from the Colorado River. Since these agricultural canals convey water by gravity flow, the farmers avoided the bulk of the cost of water in the Colorado River Aqueduct. Ironically, both the Colorado River Aqueduct and the All-American Canal almost end up in the same place just east of Palm Springs.

Colorado River water is essentially free, except for the conveying, pumping, storage and treatment costs.  Most of the cost of water is the expense of pumping. So San Diego might be better off to become independent of the rest of Southern California.

Due to geological conditions, San Diego County has virtually no local groundwater supplies.  It also has thin water storage capacity. However, it is building a $1.5 billion emergency water storage project at San Vicente Reservoir.

Imperial County Ag Water Transfer

The pool of water that would be conveyed through any new canal would be former farm water from Imperial County.  This farm water became surplus when a court ordered farmers to line the Coachella-All-American Canals, and for San Diego to pay for the lining costs.  This arrangement was finalized in 2003 and lasts 45 years, with a 30-year option to renew.

If San Diego loses its water rate lawsuit, it will continue to get its allocation of Colorado River Water through Metropolitan’s Colorado River Aqueduct via what is called a water transfer. The surplus farm water will be intercepted upstream on the Colorado River and conveyed to San Diego through the Colorado River Aqueduct.  There would be no need to try and build a canal to connect the All-American Canal with the Colorado River Aqueduct to convey surplus farm water to San Diego.

‘A Drought is When You Learn Who Has Water Priority Rights’

San Diego County Water Authority General Manager Maureen Stapleton defined a drought as “when you find out who has the water rights and who doesn’t.”  What she was referring to was the Metropolitan Water District’s Laguna Declaration, signed in 1952. This water treaty guaranteed all of Metropolitan’s member agencies would be provided water in a drought.

But San Diego knew that it was buying about one third of all of Metropolitan’s water. At that time, however, San Diego only had one sixth of all the votes on the Board of Directors. In a drought emergency, Metropolitan’s Board could meet overnight and assign San Diego junior water rights to the 13 senior water agencies in Los Angeles that originally formed the water district.

About 85 percent of San Diego’s water comes from Metropolitan. Los Angeles’s need for backup water supplies in a drought could swell from 34 percent to 65 percent.  San Diego is at the end of Metropolitan’s pipeline system and has a history of being politically disfavored by the majority of water agencies.  Thus, San Diego has always feared that the Laguna Declaration would not hold up in a drought.

Recently, Metropolitan negotiated with the U.S. Bureau of Reclamation to store up to 1 million acre-feet of water in Lake Mead, as long as Lake Mead had low water conditions. To get this right to store water, Metropolitan had to take Fourth Priority position on 550,000 acre-feet of river water and Fifth Priority position on 662,000 acre-feet of water.  In other words, San Diego’s water supply from the Colorado River could be potentially subordinated to other river users’ water rights.

Metropolitan also relies on the State Water Project for its water supplies. In the last 10 years, Metropolitan’s reliance on Colorado River water has dropped from about two thirds of its supplies to about one third.  Conversely, its reliance on the State Water Project has increased to about two thirds of its water supplies.

Could Colorado River Aqueduct Become Obsolescent?

At some point in the future, Metropolitan may possibly have to look at huge costs to upgrade the Colorado River Aqueduct and de-silt the storage reservoirs along the route of the Aqueduct — the Copper Basin and Gene Wash Reservoirs.

The Colorado River Aqueduct enjoys cheap hydropower from Hoover Dam at $20 per megawatt hour today to power its pumps (equivalent to 2 cents per kilowatt hour).  Should higher energy costs emerge and the aqueduct require upgrading and de-silting, it might be beneficial for Metropolitan to also explore a cheaper alternative for conveying water to urban Southern California.

Metropolitan’s Colorado River Aqueduct absurdly will soon be subjected to cap-and-trade taxes even though it uses clean hydropower to pump water over the mountains to thirsty Southern California cities.  Should San Diego build a new canal to convey water to San Diego by gravity flow, it would not be subject to such taxes.  Taxation thus might end as a determining factor in whether San Diego builds its own canal.

San Diego’s exploration of building its own aqueduct from the Colorado River today might be politicized as a foolish move.  But there might come a time when the high pumping, maintenance and upgrading costs of the Colorado River Aqueduct, coupled with a decreased allocation of river water, might make the Aqueduct obsolescent. That might leave San Diego in a situation where Metropolitan could play its “political drought” card.  That is, unless San Diego builds its own aqueduct.

The San Diego–Metropolitan water war is like two scorpions in a bottle. It is a battle of two powerful water agencies.  The future of San Diego’s water supply and the unity of the Metropolitan Water District could be at stake.

Faced with rising water rates, some politicians and community activists in Southern California are revisiting a fundamental question that most of us thought had been answered by the collapse of the Soviet Union: Is government the most efficient provider of services?

We know of the poor quality of products and services provided by government monopolies. Yet officials in Stanton and Claremont think otherwise. They have discussed spending tens of millions of tax dollars to “buy” their water systems from a private water company that doesn’t want to sell them. To make matters worse, the cities’ efforts will require the use — some would say the abuse — of the power of eminent domain to acquire the properties by force. Taxpayers would be on the hook for all of this.

The cities’ main beef is that water rates charged by the regulated Golden State Water Co. are higher than those in surrounding communities, which is a legitimate complaint born of a lack of competition in the regulated utility market. But their solution — epitomized by a commenter on the Claremonters Against Outrageous Water Rates Facebook page who boasted about the virtues of “socialist” utilities — is the wrong one. Private utilities are not competitive in the way that true private companies are, but the answer is to boost competition, not further reduce it.

The city of Claremont voted in January to spend $300,000 to explore starting a city-run water company. Stanton officials recently tabled their proposal but were talking about the same idea even though the expected purchase price would be in the $100 million range. Any such idea means enormous debt spending by a city of about 38,000 people and a strain on local finances to fix a nonexistent problem.

Rising Rates

Water rates are rising everywhere, driven by government-imposed conservation edicts. The government-owned Metropolitan Water District of Southern California — which provides water to much of Orange County — is looking to raise rates for the 10th time in a decade, and, if approved, the hike would mean a 100 percent increase in rates since 2006, critics of the rate hike point out.

It’s unlikely that handing water systems over to the government will keep a lid on rate increases, despite the nonsense peddled by water socialists.

Throughout California, public services are under strain. We see cities facing potential bankruptcy and dramatically cutting back services even as they refuse to roll back generous pay and pension packages for their employees. Stanton, which believes it can run a utility more efficiently than the private company that has been doing it for more than 80 years, recently declared a fiscal emergency and wants a special election on raising the utility users tax. Does that sound like a city that can run a water system efficiently?

In Fullerton, the city is embroiled in controversy over an almost-certainly illegal 10 percent tax that officials have been placing on water bills. This is how governments operate. Turning a private water system over to the government in a perverse reverse-privatization situation will only lead to more ways for cash-starved governments to impose dubious taxes, debts and fees.

All of California’s toughest municipal-finance issues have the same root cause — the government delivery of services. Cities are cutting back police and fire services and letting roads and bridges crumble not because the public is undertaxed, but because governments misspend the money they have.

Golden State Water Co. has relatively high rates, but that’s in part because a private company cannot force taxpayers to assume costs it does not want to account for. For instance, Golden State recently switched from a defined-benefit pension plan, similar to retirement plans in the public sector, to a defined-contribution plan, common in the private sector, because it cannot force taxpayers to pick up the costs of its future unfunded pension promises. As a Golden State official told the Orange County Register, “Golden State rates reflect the full cost to provide the service, maintain the infrastructure and make needed investments to improve the system.”

Private Model

That’s the model the state needs to move toward. Claremont and other localities that think water socialism is a good idea essentially want to lower water rates by subsidizing water users. They want to hide many of the costs of delivering water by spreading them out among taxpayers.

Governments are notoriously bad at maintaining infrastructure.

Advocates for government-run utilities claim that the political process — i.e., electing officials, who oversee the people who run the services — is the best way to assure accountability. The opposite is true. In a political system, the most powerful special interest groups are the ones whose voices are heeded. Unions, for instance, have enormous political power, and they help elect the politicians who assure that union pay and benefit packages are not touched even as water pipes — which lack powerful lobby groups — are allowed to decay out of public view.

In 2001, Huntington Beach officials pleaded guilty to felony charges because they did not maintain the city’s sewer pipes, and they allowed millions of gallons of raw sewage to leak into the ground.

There’s a reason why, during the Soviet era, the Eastern Bloc nations were among the most polluted nations in the world — the government does as it pleases. This sewer prosecution against public officials was extremely rare. It’s far easier to hold private officials accountable.

Admittedly, the current model of regulated utilities is a bad one.

Utilities set rates based on their cost to provide services after a bureaucratic process controlled by the Public Utilities Commission.

It’s not a competitive system, but a privatized system is better than a public one because the companies cannot offload costs onto taxpayers. This system also assures that long-term infrastructure investments are made and usually offers better customer service.

This system has many flaws. But immersion in water socialism won’t fix them.

– Steven Greenhut