SAN FRANCISCO - Water districts in California can afford to pay off the debt costs of $25 billion to build the facilities under the Bay Delta Conservation Plan, according to a report from State Treasurer Bill Lockyer.
The BDCP proposed to modernize California's existing water supply system, which includes the State Water Project and Central Valley Project located in the Sacramento-San Joaquin Delta—and protect water users across the state from water supply disruption due to regulatory restrictions and seismic risks.
The plan's preferred alternative calls for the construction of three new intakes in the northern Delta on the Sacramento River and twin tunnels to protect and transport supply to the existing aqueduct systems in the southern Delta.
"The study finds that the cost of the Delta conveyance facility is within the range of urban and agricultural users' capacity to pay," the state treasurer's office said.
The report gives cost ranges for the Metropolitan Water District, Santa Clara Valley Water District, Westlands Water District, and Kern Water District, which have been major funders of the BDCP planning effort.
The 67-page report gives best-case, worst-case, and base-case scenarios regarding funding for the plan over a 50-year period.
According to the analysis, the peak annual debt service costs, which are the average annual costs for the highest 10 years, are estimated to be $1.58 billion per year in the base case scenario.
The debt would be financed with revenue bonds, repaid by revenues from the SWP and CVP contractors and their ratepayers. The report said that the SWP is in good shape to fund the plan because of its high credit rating and good cash balance.
"More than 56 percent of the estimated financial responsibility of SWP contractors' share of the bonds would be derived from contractors that have two AA/Aa or higher category ratings by Moody's Investors Service, Standard & Poor's, and Fitch ratings," the treasurer's office said.
The independent analysis was funded solely by the California Debt and Investment Advisory Commission, which is chaired by Treasurer Lockyer.
