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Benefits of Delta Conveyance Project far exceed costs, analysis finds

Benefits of Delta Conveyance Project far exceed costs, analysis finds
(photo courtesy California DWR)

The California Department of Water Resources (DWR) released a benefit-cost analysis for the Delta Conveyance Project that finds the project would create billions of dollars in benefits for California communities, including reliable water supplies, climate change adaptation, earthquake preparedness and improved water quality. In fact, for every $1 spent, $2.20 in benefits would be generated.

“The Delta Conveyance Project passes the benefit-cost test readily, with benefits that are more than double the cost,” said Dr. David Sunding, Emeritus Professor, UC Berkeley, who led the benefit-cost analysis. “The project enables ongoing demands to be satisfied and water supply reliability to be maintained. The benefits clearly justify the costs.”

As climate change and regulatory constraints diminish water supplies, the reliability of the State Water Project (SWP) infrastructure is in jeopardy, putting 27 million Californians and 750,000 acres of farmland at risk. This benefit-cost analysis provides a compelling financial rationale for the public water agencies funding the project to be able continue to provide affordable, safe, clean and reliable water supply, according to DWR.

The SWP provides water to 29 public water agencies and also uses the water for hydropower generation. The SWP is a system of 32 storage facilities, 21 pumping plants, four pumping-generating plants, eight conventional hydroelectric plants and about 700 miles of canals and pipelines. Among these generating plants is the 762 MW Hyatt Powerplant at the foot of Oroville Dam.

“Twenty-seven million people rely on these surface water supplies that support a $2.3 trillion economy in California,” said Karla Nemeth, director of California DWR. “There is a very real cost to do nothing. It is vastly more efficient and economical to avoid declining supplies. Water shortages, mandatory restrictions, land fallowing and job loss all impact our state and local economies.”

The need for operational flexibility that the Delta Conveyance Project would grant water managers is especially notable this year. Even though it was a wet winter, fishery-related regulations significantly constrained water exports from the south Delta. If the Delta Conveyance Project had been available, an additional 909,000 acre-feet of water could have been moved from the intakes in the north Delta where it is safer for fish. The Delta Conveyance Project helps resolve these difficult conflicts in the south Delta, DWR said.

The Delta Conveyance Design and Construction Authority (DCA) prepared an updated cost estimate. DCA is the joint powers authority that, under DWR’s direction, is responsible for project design and engineering and will oversee construction. DCA is a public agency comprised of the local public water agencies participating in the project.

The project cost is estimated to be $20.1 billion in real 2023 (undiscounted) dollars. A preliminary cost assessment conducted in 2020 showed the project would cost about $16 billion. Accounting for inflation to 2023 dollars shows that the two estimates are similar in cost, even as details are added and refinements made to the program.

DCA conducted a preliminary value engineering exercise to identify design and construction innovations that present opportunities to cut costs, save time and reduce risks. These engineering innovations do not represent changes to the approved project description but show there is genuine potential for a significant cost reduction of about $1.2 billion.

Some examples of DCA’s recommended design and construction innovations are:

Optimize the Bethany Reservoir Pumping Plant below-ground configuration to reduce construction effort and house the pumping plant equipment and piping more efficiently;

Consider the latest tunnel boring machine technology that allows excavation and lining installation to happen concurrently; and

Raise the elevation of the intake screens to create more separation from the river bottom, improving O&M and reducing the depth of the intake structure.

Later this year, a draft implementation plan will be published for community review and input. It will include details about funding criteria and program administration, DWR said.