California Water Impact Network Releases ECONorthwest White Paper

Posted on July 31, 2012 in Water Resources by Ann Hollingshead

In the recent white paper, ECONorthwest estimates the rate impacts of the proposed Peripheral Canal/Tunnel on Santa Barbara County and its ratepayers.

On Wednesday, California Governor Jerry Brown, alongside Interior Secretary Kenneth Salazar, unveiled plans to build the Peripheral Canal / Tunnel, which would move water from the Sacramento River in northern California to cities and farmland in the south.

Following the announcement, the California Water Impact Network (C-WIN) released its report "The Cost of Water for Santa Barbara County--Why We Cannot Afford a Peripheral Canal." As part of the report, C-WIN included a white paper which they commissioned from ECONorthwest titled "Analysis of the Cost of a Bay-Delta Conveyance Structure: Rate Impacts to Santa Barbara County." In the white paper, ECONorthwest estimates the future impact of the Canal / Tunnel on ratepayers in Santa Barbara, including the costs of financing the construction and operation and related mitigation costs.

To account for uncertainty surrounding the actual cost of building the tunnel, the ECONorthwest model included two scenarios: a high-cost and a low-cost. This allowed the authors to estimate, on an annual basis, the total increase in rates for each ratepayer in the Santa Barbara County Flood Control and Water Conservation District.

"The ECONorthwest report predicts that under the lowest cost scenario, Santa Barbara County water rates will go up on average $24/month in 2019." said Carolee Krieger, C-WIN's President, "The high cost scenario would increase rates by $160 month in 2019."

ECONorthwest also reported the total principal and interest payments Santa Barbara would pass along to its ratepayers and the total increase per ratepayers, over the lifetime of the financing costs.

"This report is useful because it's so accessible." said Ed MacMullan, senior economist and the report's principal author, "The Bay Delta Conservation Plan says the tunnel will cost $17 billion, but numbers that big are too abstract for most of us. Our report translates big numbers into the actual dollar increase each ratepayer in Santa Barbara will see on his or her monthly bill. Making the numbers accessible helps to clarify the decision."

You can read the full white paper here. Find additional coverage of the ECONorthwest white paper in the Daily Kos and the Central Valley Business Times.

Other contributors included: Ann Hollingshead, Research Analyst, who specializes in natural resource policy and economics; and Paul Thoma, Economic Analyst, who specializes statistical and econometric analysis and applied microeconomics.

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