Ag Today July 18, 2017

These farmers say they may not pay for Delta tunnels pushed by Gov. Brown



The governor’s proposed Delta tunnels ran into a roomful of skeptics Monday – an influential group of San Joaquin Valley farmers who remain unconvinced the controversial project will deliver the water they need at a price they’re prepared to swallow.

Three weeks after the tunnels received a crucial green light from federal environmental regulators, the $17.1 billion project got a cool reception from nearly 100 growers who farm in the powerful Westlands Water District. Provided with detailed financial projections at a Westlands board meeting for the first time, the farmers suggested they aren’t ready to sign onto the plan.

Investment bankers from Goldman Sachs & Co. said debt repayment could balloon farmers’ water costs to as much as $495 an acre-foot under the most expensive scenario, or about triple what Westlands growers currently pay. However, the Goldman bankers said the costs could be reduced to the $200 per acre-foot range depending on how the debt is structured.

Those figures were too rich for Todd Neves, a Westlands board member.

“My initial thought, right off the bat, is no way this will work,” the tomato and almond farmer said in an interview. “Those numbers might work for a city, Metropolitan and them. For a farmer, none of the crops that I grow can support these numbers.”

After a decade of preliminary planning, Westlands and other water agencies south of the Sacramento-San Joaquin Delta are beginning to drill into the details of the tunnels plan, in the expectation of deciding in September whether to invest the billions needed to make the project a reality. While the Metropolitan Water District of Southern California – which serves millions of urban customers – is expected to sign onto the project, the sprawling Westlands district, which serves portions of Fresno and Kings counties, has showed more reluctance.

“It’s a lot of money for not a lot of water,” said William Bourdeau, a Westlands board member and an executive with Harris Farms, whose well-known hotel and restaurant near I-5 served as a venue for the board meeting.

Without Westlands’ support, the tunnels’ fate would become far more uncertain.

Much of the farmers’ reluctance revolves around the project’s myriad complexities, and the fact that the tunnels might not generate a substantial amount of additional water for them.

The project would burrow a pair of tunnels along the Sacramento River, just south of Sacramento, and divert a portion of the river’s flow directly to the giant pumping stations at the south end of the Delta. Gov. Jerry Brown’s administration said this re-plumbing effort would reduce the harm the pumps do to Delta smelt and other endangered species, allowing the pumps to deliver water more reliably to urban Southern California and the San Joaquin Valley.

However, the exact amount of water that could be pumped won’t be known for years, largely because many of the environmental regulations governing Delta pumping operations are still evolving.

A consultant from the state Department of Water Resources said the Delta pumps would likely be able to deliver an average of 4.7 million to 5.2 million acre-feet of water south each year if the tunnels were built. The range could be considerably wider depending on environmental restrictions.

The current average is 4.7 million acre-feet.

The lack of specificity was clearly frustrating to the Westlands farmers.

“We can’t make a definitive assessment based on the information we have today,” said Don Perrachi, president of the Westlands board. He said the board wouldn’t take on “billions of dollars of debt without reasonable assurance” that the tunnels will provide a significant amount of affordable water.