Author Archives: Rodney T. Smith

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.

State Legislator Calls for Texan Interstate Comity and A New Policy Direction

State Representative Lyle Larson (R-San Antonio) recently called for a new bold plan to solve the Lone Star state’s outsized water challenges in a guest column in the Waco Tribune Herald.  He proposed “an open dialogue with our neighboring states and investing in new technology to bolster our state’s water supply, rather than relying on the same approaches that have failed to provide us a water supply for future generations.”  He finds Texas’s future can be found outside courtrooms and in conjunctive groundwater-surface water projects based on interstate cooperation. Continue reading

Does the Bay Delta Conservation Plan Yield a Reliable Water Supply?

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.  Continue reading

Is Relying on the 2014 Water Bond To Help Fund California’s Bay Delta Conservation Plan A Good Bet?

Nope.

Rising debt burdens in California is a “headwind” for voter-approved water bonds.  Given the crowd I roll with, this is conventional wisdom.  I find unconvincing Department of Water Resources (“DWR”) discussion of bond funding for the conservation and restoration part of the BDCP.  DWR simply believes that California voters pass water bonds by large majorities.

How does one choose between these two world views?  Simply look at the very history of California water bonds found in DWR materials!

Based on the history of water bonds, the 2014 water bond has about 7-1 odds against passing.  A smaller water bond would do better, but are not close to an even money bet.  Time to seek counsel from a former Carmel mayor.  Do you feel lucky . . .? Continue reading

What is the Cost of Water in the Bay Delta Conservation Plan?

This second post in my BDCP series answers the question that eludes readers of the Department of Water Resources (“DWR”) materials and participants at DWR’s July 17th presentation:

What is the cost of water to state and federal water contractors?

As explained below, the answer depends on interest rates and risk assessments.  I conclude that a reasonable range for the cost of water for state and federal contractors is substantial and depends on DWR’s Delta outflow scenario:

  • “low Delta outflow” scenario: $550/AF to $700/AF
  • “high Delta outflow” scenario: $750/AF to $1,000/AF

Continue reading