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.

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 →

NM Supreme Court Upholds Domestic Well Statute AND Priority System

On July 25th, the New Mexico Supreme Court issued its decision in Bounds v. State of New Mexico affirming an Appellate Court decision holding that New Mexico’s Domestic Well Statute does not violate either the state’s doctrine of prior appropriation in the New Mexico Constitution or the guarantees of due process of law.  With the plaintiff unable to show any impairment from the issuance of domestic well permits, the Court was reluctant to cast aside the Domestic Well Statute on the grounds of theoretical injury.  Continue reading →

Is the Bay Delta Conservation Plan a Doable Deal?

Part 1: DWR underestimates capital costs of BDCP water facility by $2 billion

Beats me whether the Bay Delta Conservation Plan (“BDCP”) is a doable deal.  My reaction is from a review of the meeting notes and materials posted by Chris Austin in Maven’s Notebook on the July 17th  presentation by the Department of Water Resources.  Ms. Austin has provided an invaluable service of making available detailed meeting notes (in her characteristic factual style) and source documents for her readers.  Whatever one’s view is on the BDCP, all should express their gratitude to Maven.

At this stage, the BDCP is still a “concept deal.” Some concept deals mature into real projects.  Others wither away.  Further refinements in analysis and consideration will determine BDCP’s destiny.  BDCP has problem children: Continue reading →

Senate Hearing on Bureau’s Colorado River Basin Study: Seeking a Common Factual Understanding

The Senate Subcommittee on Water and Power held a hearing yesterday on the Bureau of Reclamation’s Colorado River Basin Water Supply and Demand Study.  Seven witnesses extolled the virtues of the follow up to the Bureau’s study released last year.  The “elephants in the room” were recreational/environmental demands, agricultural water use, Indian water rights and supply augmentation.  Continue reading →