Nope.

Remarkably, DWR’s operational studies suggest that the BDCP’s water supply benefits are mostly in normal and wet years.  Supply reliability means the ability of a water resource to provide water in drought conditions.  The BDCP mantra about water supply reliability has stood the concept on its head.  The missing link: storage.  Without it, the BDCP project looks like a new junior priority water resource for California water users. 

Real Water Supply Reliability

There are reliable water supplies in California.  On the Colorado River, the agricultural water users (Palo Verde Irrigation District, Yuma Project, Imperial Irrigation District, Coachella Valley Water District) have the first priority to 3.85 million acre-feet of Colorado river water available to California (subject to minor allocations for miscellaneous present perfected rights and Indian water rights as specified in the Quantification Settlement Agreement).  The Metropolitan Water District of Southern California (“MWD”) is next in line for the rest of California’s 4.4 million acre foot entitlement.  Even under current drought conditions on the Colorado River, I am unaware of any forecast saying that California’s agricultural users of Colorado River water face a material risk of cutback due to low flows or storage on the Colorado River.  As they say,

that’s a water supply reliability

Even MWD’s junior right to Colorado River water under California’s 4.4 million AF entitlement may be reliable (but do not bootstrap this to MWD’s total water supplies), but not as reliable as the agricultural water user’s water rights.

The Central Valley Project has reliable water supplies.  The Sacramento Valley Water Right Settlement contracts specify quantities of “base supply” water that are subject to only a 25% cutback under defined conditions.  The Exchange Contractors south of the Delta have comparable contracts.  During the 36 years since 1977, these contractors available water has been 100% of their contract amounts in all but four years (1977, 1991, 1992, and 1994).  In those years, they received 75% of their contract amount.  Therefore, these CVP contractors have a reliable supply equal to 75% of their contractual amount.  The balance of their contract rights, 25%, is non-firm but (based on the historical record) yield the full amount of water eight out of nine years.  So, minimum yield (reliable yield) of these CVP water rights, 75%, and average yield is 97.2%.  Shortfall from 100% allocations of contract amount is once-in-nine years and a cutback limited to 25%.

Desalination projects are the latest arrival of reliable water supplies in California.  Project yields are “drought proof.”  So, the Carlsbad plant under construction to meet water demands by the San Diego County Water Authority will yield 56,000 AF annually, drought or no drought.

Groundwater basins, especially in Southern California’s adjudicated basins, are also a reliable water resource.  The legal right to pump groundwater is not subject to curtailment during drought.  Further, the well-managed basins can continue pumping at full rights without suffering material adverse consequences on their basin.

BDCP Water Supplies

The estimated average annual water yield of the BDCP depends on delta outflow scenario:

• High Delta outflow scenario: 1.2 million AF per year
• Low Delta outflow scenario: 1.7 million AF per year

What is the reliable yield of the BDCP project?  DWR does not address this question explicitly in its materials (Appendix 9A).  One must resort to “chart reading.”

(Note to DWR:  please use the “Data Table” option in Excel that will print the data points in a table below a chart)

Start with Figure 9.A.2, “Total SWP Deliveries (Probability of Exceedance).”  (Note: Probability of Exceedance means the percentage of the time the State Water Project (“SWP”) yields at least a given amount of water).  Squinting, I read that under existing conveyance and the high Delta outflow scenario, the SWP yields about 500,000 AF at the 99% exceedance level (the yield of the SWP is at least 500,000 AF 99% of the time).  With 4.12 million AF of Table A entitlements in 2013, the reliable yield of the SWP is less than 12%.  With the BDCP, the reliable yield of the SWP is the same. 

The contribution of the BDCP conveyance facility to supply reliability: zero

The situation looks a bit better under the low Delta outflow scenario.  Without the BDCP, the yield of the SWP project looks like 850,000 AF at the 99% exceedance level.  The reliable yield of the SWP without the BDCP is less than 21%.  With the BDCP, the reliable yield of the SWP looks a bit higher (100,000 AF?).  The contribution of the BDCP conveyance facility to supply reliability is increasing the reliable yield of the SWP from less than 21% to less than 23%.

So, using the scorecard for Sacramento River Settlement Contractors and Exchange Contractors, here is how the BDCP conveyance facility stacks up:

Yield of BDCP Conveyance Facility

Delta Outflow Scenario	Reliable Supply (AF)	Non-Firm Supply (AF)	Total (AF)	Share Firm
High	0	1,200,000	1,200,000	0%
Low	100,000	1,600,000	1,700,000	6%

The numbers in the above table would change, of course, if one specifies a different standard for supply reliability, such as minimum yield not obtained only once in fifty years, once in a decade, etc.  Without the underlying data, it is too difficult on my eyes to do the calculations. Undoubtedly, the conclusion remains the same: the BDCP conveyance facility does not increase supply reliability.

Non-firm water supplies are, of course, valuable.  They are just not the same as reliable supplies.  Storage is an “economic value generator”.  Storage transforms non-firm supplies to reliable water supplies by taking water available in normal and wet years and stores to make it available in dry years.  At a presentation in 2010 before the California Bar Association, I reported that, under DWR’s 2009 assessment of the SWP’s deliverability, a Table A entitlement had a firm yield of about 10% to 15% (depending on one’s definition of supply reliability) that could be increased to reliable yields of 40% to 50% with one AF of storage capacity for each AF of Table A entitlement.  That is a value multiplier!  (Contact me if you want a copy of the presentation.)

The BDCP, of course, includes no new storage capacity.

Avoided Shortages

DWR projects that the BDCP conveyance facility avoids urban shortages.  Back to reading charts (Figure 9.A-9 for the high Delta outflow scenario and Figure 9.A-10 for the low Delta outflow scenario), it seems that the expected and maximum annual urban shortages avoided are the following:

Annual Urban Water Shortages Avoided by BDCP Conveyance Facility

Delta Outflow Scenario	Expected Shortage (AF)	Maximum Shortage (AF)
High	250,000	850,000
Low	350,000	1,000,000

 

Let’s think a bit more about these projections.  Under what hydrologic conditions do these avoided urban shortages occur?  Not in critical years.

One more chart (“Remaining Urban Shortages”, Figure 9.A-11) tells the story.  The maximum projected potential annual urban shortage is rapidly increasing from about 150,000 AF to 250,000 AF from 2012 to more than 1.3 million AF (under either delta outflow scenario) before the BDCP conveyance facility becomes operational in 2025.  Take this as the critical year water shortages.  Even with the BDCP, the maximum remaining annual urban shortages continue growing to 1.6 million AF (?) by 2050.  Bringing the BDCP online has no impact on this trend.  This is consistent with the point that the BDCP conveyance facility is not improving water supply reliability in California.

DWR projects that the BDCP does show an impact on projected expected annual shortages.  Expected annual shortages are steadily growing from 2012 to 2024 (eve of BDCP operations) to above 200,000 AF under the low Delta outflow scenario and above 400,000 AF under the high Delta outflow scenario.  The expected remaining annual urban shortages fall by at most 100,000 AF and stabilize for a decade.  Thereafter, expected annual remaining urban shortages start increasing again.

We need two more pieces of information that DWR did not report.  Breakdown the expected shortage into its two components: (remember stat class: Bayes theorem?)

Expected Shortage = (Probability of Shortage) x (Average Shortage when they occur)

Consider the high-Delta outflow scenario where the expected annual shortage was 350,000 AF and the maximum annual shortage was 1,000,000.  The minimum probability of a shortage is 35% (assuming that the average annual shortage conditional on shortages equals the maximum annual shortage).  However, the average annual shortage (conditional on shortages occurring) is likely less than the maximum annual shortage.  The probability of a shortage is significantly higher than 35% (see table):

Probability of Shortage Implied by Ratio of Average to Maximum Annual Shortage

n.p. the probability of a shortage must exceed 100% (not possible) for expected shortages of 350,000 AF and average shortages conditional on a shortage being 25% of 1,000,000 AF.

Where  does this leave us?  DWR projects that water shortages will become regular events in California.  By only generating additional water in normal and wet years, the BDCP conveyance facility is reducing urban water shortages in normal and wet years!   DWR is anticipating a “new future”.

The Elephant in the Golden State

The growth projections underlying the DWR analysis are not viable.  Will the economic base of California continue to expand in the face of 1 million AF to 2 million AF annual water shortages in critical years?  Are water shortages once every two or three years acceptable?  Water demand  depends on water supply reliability.  Following standard practices in the industry, DWR’s analysis ignores this interrelation.  Time for industry standards to change.  Prudent water resource management demands it.  

With DWR’s growth projections not viable,  the “avoided urban water shortages” are for demand growth that will not exist.  The “water shortage benefits” will prove as illusionary as the demand projections.  The key to economic growth is water supply reliability.  From this perspective, what is the BDCP?

Conclusion

Touting the BDCP as contributing to water supply reliability is a misnomer.  The BDCP conveyance facility needs water storage to deliver water supply reliability.  Without storage, the BDCP conveyance facility is a multi-billion investment to generate non-firm water supplies.  With DWR’s projections of large and frequent shortages, with or without the BDCP, DWR growth projections are not sustainable.  So, is there a market for non-firm water prices at BDCP prices?  See next post.