Metropolitan Water District Will Send You the Multi-Billion Dollar Bill

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Last week Food & Water Watch, Southern California Watershed Alliance, and Green LA Coalition challenged the Metropolitan Water District (MWD) for its opposition to an independent cost-benefit analysis of the proposed multibillion-dollar Peripheral Canal or Tunnel project.

Who would get the water and who would pay the bill, which is now estimated to be $20 billion to upwards of $50 billion? MWD opposes an independent cost-benefit analysis. But it’s MWD customers and other water district ratepayers in the southland who would pay the bill.

AB 2421 would require such an analysis. The bill’s fate now rests with Assembly member Felipe Fuentes and Speaker John Perez, who will largely determine whether it advances or dies by May 25 in the Assembly Appropriations Committee.

Ratepayers in Los Angeles now face escalating water rates to replace leaky pipes and upgrade old reservoirs. Fixing LA’s local water infrastructure is crucial to protecting LA’s water supply when the next major earthquake strikes. The Los Angeles Department of Water and Power will seek a rate hike this fall to expand the local water supply by capturing rainwater and cleaning up a polluted aquifer in the San Fernando Valley. Given these major investments, especially in tough economic times, ratepayers cannot afford to spend billions for someone else’s pipeline.

Assembly Bill 2421 would protect ratepayers from unfair rate hikes, as it requires a complete cost-benefit analysis of this pipeline to reveal who would get the water and who would pay the multibillion-dollar bill.

AB 2421 protects ratepayers from needlessly subsidizing corporate interests. The chief beneficiaries of the pipeline are some of the nation’s most powerful agribusinesses, including Paramount Farms.  Landowners on the west side and the south end of the San Joaquin Valley not only export lucrative crops such as almonds and pistachios, they are also gaming a system that allows them to resell taxpayer-subsidized water for private profit.

Facts of Interest:

  • MWD has admitted it would pay at least 25% of the cost of the project, which could go as high as $50 billion.
  • MWD has already admitted that it will need to increase water rates every year for the foreseeable future.
  • MWD rates have risen 96% since 2006 (Orange County Register, 4/15/12, Teri Sforza, “Imported water prices: up 96 percent since 2006”)

“[I]f we are successful on the State Water Project – and success means a very expensive eco-system rehab project the size of what we’ve done in the Florida Everglades, and success means building a new tunnel or canal that we’re looking in the eight- to 12-billion-dollar range with the State of California – and Metropolitan coming on board to pay 25% of that cost – that’s a significant new cost that Metropolitan, the next generation of Metropolitan ratepayers will be paying.” – Jeffrey Kightlinger, General Manager of the Metropolitan Water District of Southern California, Aug. 10, 2010 (emphasis added)

Southern California ratepayers will see increased rates EVERY YEAR – says MWD Gen. Manager

Jeffrey Kightlinger, MWD general manager: “We’re going to have to raise rates every single year nonstop, pretty much forever, and it’s going to be to be more than inflation because in addition to covering all the R&R work (replacement and refurbishment,}, we’re going to be adding new facilities.” Water Education Foundation, “Western Water,” Nov.-Dec. 2011

“Our analysis revealed that imported water from MWD now costs LADWP $912 per acre-foot, when all related costs are included.  This is more expensive than some conservation, recycled water and stormwater projects.” (Barry Nelson, Natural Resources Defense Council, Senior Policy Analyst, Water Program, “The Southern California Trend Toward Reduced Reliance on the Delta – Price Matters,” Living Sustainably,” Feb. 6, 2012)

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Conner Everts is the Executive Director for the Southern California Watershed Alliance and Adam Scow is the California Campaigns Director for the consumer advocacy organization Food & Water Watch.

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