Metropolitan Board Approves Additional Funding for Full-Scale, Two-Tunnel California WaterFix

LOS ANGELES–(BUSINESS WIRE)–The board of directors of the Metropolitan Water District of Southern
California voted today to provide the additional financing necessary to
allow for the construction of the full California WaterFix project.

The board authorized $10.8 billion for the project to modernize the
state’s aging water delivery system, making Metropolitan the primary
investor in the project and more than doubling the agency’s initially
planned investment to ensure the project is completed as originally
proposed and studied.

“For decades, we have sought a solution to the problems of the Bay
Delta, problems that put Southern California’s water supply at risk,”
Metropolitan board Chairman Randy Record said. “We finally have that
solution, California WaterFix. We simply could not jeopardize the
opportunity to move this long-sought and much-needed project forward.”

WaterFix will be paid for by the people and businesses that use the
water it helps deliver via the retail water agencies and cities that
serve those customers. Metropolitan’s financing of the full project is
expected to cost households on average up to $4.80 a month, though that
average cost would be reduced as Metropolitan recoups some of its
investments from the agricultural sector. Metropolitan will be selling
or leasing capacity in the tunnels to allow water deliveries or
exchanges for other parties.

About 30 percent of the water that flows out of taps in Southern
California comes from Northern California via the Sacramento-San Joaquin
Delta. But the Delta’s delivery system is badly outdated, its ecosystem
is in decline and its 1,100-mile levee system is increasingly vulnerable
to earthquakes, flooding, saltwater intrusion, sea level rise and
environmental degradation.

Attempts to help the Delta have led to regulatory restrictions that have
reduced water exports from the region. California WaterFix would
modernize the state’s water delivery system by building three new water
intakes in the northern Delta and two tunnels to carry the water under
the Delta to the existing aqueduct systems in the southern Delta that
deliver water to cities and farms.

In October 2017, Metropolitan’s board initially voted to participate in
WaterFix and contribute up to 26 percent of its $17 billion cost, or
about $4.3 billion.

But the majority of federal agricultural contractors who also import
supplies via the Delta have yet to commit to investing in the project,
leaving part of the project’s costs unfunded. In February, the state
proposed building the project in stages instead–starting with two
intakes and one tunnel, with a capacity of 6,000 cubic feet per second.
An additional intake and tunnel would be added when funding allowed.

In today’s action, Metropolitan’s board chose between supporting this
staged construction of the project or helping finance the full 9,000 cfs
project all at once, with the hope of recouping the investment from
agricultural interests once the project is completed. Staging the
project also would result in potential permitting delays associated with
the change in approach.

Under the staged approach, the cost of building one tunnel would be
about $11.1 billion, with Metropolitan’s share of those capital costs
coming in at $5.2 billion. The board ultimately voted to support
building the full project all at once at an estimated cost of $16.7
billion, with Metropolitan’s investment at about $10.8 billion in
today’s dollars.

“Two tunnels better accomplishes WaterFix’s co-equal goals of improving
the environment and securing supply reliability,” said Metropolitan
General Manager Jeffrey Kightlinger. “With them, we’re better able to
capture the high flows of big storms that climate change is expected to
bring. We’ll better address the reverse flows that disrupt the Delta’s
ecology. And we’ll have more flexibility to operate the water delivery
system.”

Kightlinger added that investing in WaterFix does not change
Metropolitan’s commitment to local supply development and conservation.

“This investment is just one part of ensuring Southern California and
its $1.3 trillion economy has a reliable water supply in the age of
climate change,” he said. “We need a diverse portfolio, including water
recycling, storm-water capture, and increased conservation. We will
continue to work hard and invest in those projects.”

The Metropolitan Water District of Southern California is a
state-established cooperative of 26 cities and water agencies serving
nearly 19 million people in six counties. The district imports water
from the Colorado River and Northern California to supplement local
supplies, and helps its members to develop increased water conservation,
recycling, storage and other resource-management programs.

Contacts

Metropolitan Water District of Southern California
Rebecca Kimitch,
(213) 217-6450
mobile: (202) 821-5253
or
Bob Muir, (213)
217-6930
mobile: (213) 324-5213