
On August 16, Fitch Ratings confirmed what Delta Tunnels opponents have been saying for years — the proposed California WaterFix project being fast-tracked by the Trump and Brown administrations would likely drive a significant increase in monthly water rates.
This increase in water rates would particularly impact low income and environmental justice communities in Southern California that are struggling to pay their water bills. The increase driven by the construction of Jerry Brown’s “legacy project,” the Delta Tunnels, would further burden families facing financial difficulties in these challenging times.
The fate of the California Water Fix, the controversial plan to divert water through two 35 mile long tunnels under the Sacramento San-Joaquin River Delta, is nearing resolution as agencies that would benefit from, and pay for such water, take a position on the outcome, according to an analysis from Fitch Ratings.
The Trump and Brown administrations and project proponents claim the tunnels would fulfill the goals of water supply reliability and ecosystem restoration, but opponents argue the project would create no new water while hastening the extinction of winter-run Chinook salmon, Central Valley steelhead, Delta and longfin smelt, green sturgeon and other endangered fish species.
The project would also threaten salmon and steelhead populations on the Trinity and Klamath rivers that have been central to the culture, religion, and livelihood of the Yurok, Karuk, and Hoopa Valley Tribes for thousands of years.
The estimated $16.3 billion in project costs would be borne by the utilities' rate payers, including State Water Project and Central Valley Project members, Fitch Ratings noted. However, economists estimate the real cost of the project could reach as high as $68 billion, including payment of debt on the bonds issued.
Fitch Ratings stated the Metropolitan Water District of Southern California, a State Water Project wholesaler to 26 member agencies serving about 19 million residents, expects to bear about one-quarter of the total cost.
MWD estimates the monthly household bill within its service territory would increase by only about $2-$3, but both parties recognize the potential for higher costs in the future.