California cities and farmers would see billions of dollars in benefits even if only one of the two tunnels planned as part of the California WaterFix gets built, says a state economic analysis.

The California Department of Water Resources said Feb. 7 that it plans to build the $16.3 billion project in two phases, starting with one tunnel at a $10.7 billion cost.

The project's advocates and detractors interpreted the news to mean the state would only be building one tunnel instead of two - but the DWR doesn't appear to have given up entirely on building both tunnels.

An anti-Delta California WaterFix tunnels sign in the Delta community of Rio Vista in August 2016.
An anti-Delta tunnels sign in the Delta community of Rio Vista, Calif. in August 2016. Rich Saskal

The Waterfix tunnels would move fresh water around the San Joaquin-Sacramento River Delta; the goal is to prevent salt water from entering the state system that moves water from the rainier northern regions to its agricultural and urban users to the south.

The decision to build the project in two phases came after several of the state’s water districts said they would not be able to pay their share of the project.

“Being prepared to implement this option is directly responsible to the stated needs of the participating agencies, and would align project implementation with current funding commitments,” DWR Director Karla Nemeth wrote in a letter to the agencies about the decision.

The economic analysis the DWR released Tuesday was conducted by David Sunding, a professor of natural resource economics at the University of California, Berkeley.

The report compared the benefits and costs of Stage 1 of WaterFix in relation to what would likely occur if WaterFix were not built, including further restrictions designed to minimize harmful reverse flows and protect species.

“Stage 1 of California WaterFix passes a cost-benefit test for State Water Fix urban and agricultural agencies under all scenarios analyzed,” Sunding wrote.

Sunding’s analysis found that urban agencies could see benefits worth $2 billion to $4 billion above the cost to build the project depending on what scenario was considered. Agricultural agencies could see several hundred million in benefits, according to the analysis. Both categories could benefit even more if low-interest federal loans are available to shoulder some of the burden.

“Without WaterFix, State Water Project contractors will see the continued deterioration of their water supply reliability,” Sunding said. “This analysis shows there is substantial benefit for both urban and agricultural water users throughout the state, and that the project will be more affordable for consumers than local alternatives such as desalination and recycling."

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