What Will Be the Final Allocation for California’s State Water Project in 2014? Redux

Is DWR’s announced zero allocation for California State Water Project (“SWP”) consistent with predictions from Hydrowonk’s study of the historic record of final SWP Allocations?  Yes

On January 30, I posted that, based on a study of the historic record of final California’s State Water Project Allocations, the final allocation for California’s State Water Project in 2014 is expected to be 12%, with one-third chance that the final SWP allocation will be below the initial 5% allocation.  On January 31, California’s Department of Water Resources dropped the SWP Allocation to zero “to preserve remaining supplies.”

As stated in my earlier post, the analysis placed a 2% minimum SWP Allocation, which would be only 83,000 AF of SWP water allocated.  I admit that DWR surprised me by going to 0%.  Should have stayed with my model.

The chart below shows the Reliability of the Final SWP Allocation with and without the 2% minimum.

Revised Reliability Chart for Final Allocation for 2014

With the 2% Minimum, the Expected Final SWP Allocation is now 11%.  This is below the 12% published earlier because I now have data from the January Northern Sierra 8-Station Precipitation Index.  Adding the January data into the analysis lowered the ratio of cumulative precipitation to average precipitation for 1990-2013.  I use this ratio to project precipitation for February through April.  With lower cumulative precipitation now projected through April, the expected Final SWP Allocation is lower.

Without the 2% minimum placed on the predictions, the Expected Final SWP Allocation is 10%.  There is less than a 25% chance (actually 23%) that the Final SWP Allocation will stay at 0%.  Overall, there is a 60% chance that the final SWP Allocation will be less than 10%.  On the flip side, there is about a 40% change that the Final SWP Allocation with be greater than 10%.

The conclusion of my earlier post may warrant repeating:
Mother Nature will not bail out California.  In the 1991 drought, the Final SWP Allocation was 19% when there was a “March Miracle.”  The odds are not good for a repeat of 1991.  2014 will be significantly worse.  The Final SWP allocation will be about one-third 1991’s Final SWP Allocation.  As noted in this Monday’s (January 27, 2014) Wall Street Journal editorial, “the chickens have come home to roost” after decades of gridlock in California.

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About Rodney T. Smith

Rodney T. Smith, Ph.D., President of Stratecon Inc.—an economics and strategic planning consulting firm—advises public and private sector water users on the acquisition, sale and leasing of water rights and water supplies in the western U.S. He is routinely involved in economic valuation of water rights, water investments, and negotiation of water acquisition and transportation agreements and has served as an expert witness in the economic valuation of groundwater resources, disputes over the economic interpretation of water contracts, economics of water conservation and water use practices, and the socio-economic impacts of land fallowing. For more information, see www.stratwater.com.