Tag Archives: early termination risk

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

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