Santa Barbara County Cannot Afford the Peripheral Tunnels Project

Peripheral Tunnels Project:

The Peripheral Tunnels Project is a joint proposal by Governor Jerry Brown and Interior Secretary Ken Salazar to increase the flow of water from Northern California to Southern California. The proposal consists of two tunnels, 30 to 40 feet in diameter, buried 150 feet deep, and spanning approximately 35 miles under and around California’s Sacramento- San Joaquin Delta. The purpose of the project is to reroute water from the Sacramento River around the San Francisco Bay Delta and distribute that water to San Joaquin Valley agribusinesses and Southern California cities and suburbs through the State Water Project. 

Currently, issues that exist within the project are:

• That there is no defined project, only a general proposal.
• None of the costs are specifically known and there has not been a cost/benefit analysis.
• The water source is unknown.
•  Additional deliveries, if any, are undisclosed.
• Cost allocations and who pays are unknown.

Read about it from a 1998 article that still rings true by Wade Graham, "A Hundred Rivers Run through it" here.

Cost to Santa Barbara County and its Ratepayers:

The total statewide cost for the Peripheral Tunnels based on information from the state and federal governments, is estimated by C-WIN in a report on the cost of State water for Santa Barbara County to be $20.6 to 68.98 billion [1]. Santa Barbara County water districts will be subject to total principle and interest payments ranging from $776 million to $5.12 billion or more. Because the project is scheduled to go forward without a vote of utility ratepayers, this incredibly costly project could be implemented without a public vote.

Paying for the Peripheral Tunnels Project could significantly increase Santa Barbara’s water costs through existing State Water Project water contracts. Because Santa Barbara County is connected to the State Water Project, its ratepayers will bear the burden of the project’s cost.

A white paper by ECONorthwest Economic Consultants found that maximum rate increases for Santa Barbara ratepayers would range between $287 per year (about $24 more per month than the current average ratepayer bill) to $1,920 per year (about $160 more per month) by 2019.

Currently, Governor Brown or State Water has not disclosed the total costs of the Peripheral Tunnels Project. C-WIN can only estimate based off the current information available what might be the total cost. Despite this lack of information, major decisions are being made soon that will commit the Central Coast Water Authority and its member agencies to decades of debt.

State Water and its Problems:

The Peripheral Tunnels Project will be connected to Santa Barbara County via the State Water Project, which itself has an unreliable history with the county. In 1991, when voters approved having the county’s water be connected to State Water through the coastal aqueduct, they were told that it would cost $270 million for construction only. Voters also were not told what operation and maintenance would cost. The actual cost for the construction, operation, maintenance, power, and interest of the coastal aqueduct to Santa Barbara County will be $1.76 billion by 2035.

Not only is the cost far greater than what was initially promised when Santa Barbara County voted on State Water, but also the promised reliability of State Water contracts has been much lower than was promised in 1991. The reliability of State Water is the percentage of full contract amounts delivered each year. In 1991 Santa Barbara County was promised a reliability of 97% from State Water. Instead the average reliability of State Water between 1998 and 2011 has been 36%.

Historically in times of drought, urban water users had been given preference over agricultural deliveries. But, in 1995 that preference was reversed as a result of a backroom deal called the Monterey Agreement. C-WIN is litigating this contract change in a separate action. Sharing cutbacks with agricultural deliveries hits urban ratepayers the hardest during droughts. Depending on the severity of drought, deliveries from State Water may go as low as 5% of the contract amount.

Montecito Water District- Spending $3.9 million for water not used

The Montecito Water District will spend 39% of its entire budget this fiscal year on SWP costs that must be paid—nearly $5 million—but is not ordering any SWP water because it doesn’t need it. Continual retail price increases have reduced demand to the point that State Water Project water is no longer needed, a phenomenon called "price elasticity."   C-WIN’s Santa Barbara report finds that other Santa Barbara County water agencies are also suffering fiscally from the high cost of SWP water and rate payers are not happy. 

Recommendations:

Water Agencies of the Santa Barbara coastal plain should go on record opposing development of the Peripheral Tunnels Project since this project would significantly increase financial obligations for water that is far too expensive.

Water Agencies of the Santa Barbara coastal plain should take up leadership roles in advocating for the urban preference to be restored to State Water Project service contracts to protect local ratepayers from unreasonable rate spikes and reduced State Water deliveries during drought years.

All four South Coast water agencies can minimize costs by using other cheaper sources of water. These options include Lake Cachuma, local streams and reservoirs, groundwater, recycled water, and desalination.

[1] C-WIN's Report on Why Santa Barbara Cannot Afford the Peripheral Tunnels Project and its Public Summary

C-WIN is working to get the Central Coast Water Authority (CCWA) and the Santa Barbara County Flood Control and Water Conservation District to withdraw from the Peripheral Tunnels/Bay-Delta Conservation Plan.

More Peripheral Tunnels Info

The Central Coast Water Authority hired Kennedy-Jenks Consultants to respond to C-WIN's report.  You can view CCWA's response here.

C-WIN responded to the Kennedy-Jenks report, agreeing on many points that the Peripheral Tunnels Project is not clearly defined, yet water agencies are being asked to support it.  You can view C-WIN's reponse here.

I Want to Help continue C-WIN’s engagement with these activities and other advocacy work.