Public can’t afford to subsidize new water projects

John Osborn And Ken Hammond

This article was originally printed in The Spokesman-Review.

Water is political currency. Politicians hold hostage worthy public programs in exchange for public funding of money-losing water supply projects.  A case in point is the Central Arizona Project or CAP – the largest, most expensive aqueduct in the United States.

In the 1960s, President Lyndon B. Johnson horse-traded approval of CAP in exchange for votes to enact civil rights legislation. While LBJ’s goals were worthy, it is a fact that taxpayers got stuck with most of the bill for CAP.

Similar subsidies apply to federal projects all over the West, including Eastern Washington.

To protect the public purse, objective economic analysis of water projects is a powerful tool. Two recent studies shine light on Eastern Washington’s two major federal irrigation projects: the Columbia Basin Project and the Yakima Project. Productive irrigated agriculture and local economies depend on these federal mega-projects. But the two projects have not paid for themselves – far from it. State and federal budget leaders should take heed.

A 2014 study by the U.S. Government Accountability Office (“Availability of Information on Repayment of Water Project Costs Could Be Better Promoted”) evaluated irrigation district repayment for 130 federal water projects in the Western U.S.

At Grand Coulee Dam, the Columbia Basin Project pumps uphill 3.3 million acre-feet of river water for delivery to 670,000 acres across the Columbia Plateau.  This massive project cost $2.4 billion to construct. (In today’s dollars, the cost would be enormously higher.) Of that, $685 million was allocated to irrigated agriculture. But $495 million – nearly 75 percent – has been written off for payment by Bonneville Power Administration ratepayers, socializing the costs to millions of people paying their utility bills.

As reported by the GAO, of the $190 million left to be repaid by the irrigators, only $60 million has been paid, with payments stretched over 50 years at zero interest. On balance, irrigators have paid less than 5 percent of their share.

The Yakima Project stores and diverts 1.2 million acre-feet of water from five reservoirs in the Cascade Mountains, serving irrigation districts in Kittitas, Yakima and Benton counties. Here, construction costs total $286 million, with $149 million allocated to irrigators. The GAO reports slightly better repayment. Still, Yakima Valley irrigators have paid less than 10 percent of the total costs.

Crops grown in these federal projects don’t pay for the existing water supply infrastructure, loudly signaling that expanding these irrigation projects won’t cover costs either. Nonetheless, the U.S. Bureau of Reclamation has partnered with Washington’s Office of the Columbia River to pursue multibillion dollar expansions of both the Columbia Basin and Yakima projects.

Fortunately for taxpayers, federal guidelines now prohibit federal funding for water projects when costs exceed benefits. A recent economic study of expanding the Columbia Basin Project into the Odessa Subarea forced the bureau to decline funding that project.

Instead, the Office of the Columbia River has stepped into the gap to assess whether, and how much, Odessa Subarea farmers can pay to pump and deliver water to their farms. Depending on size, state subsidies of several hundred million or a few billion dollars would be needed to replace groundwater with river water for this small group of potato farmers.

The proposed Yakima water projects are similar. To expand in the Yakima, large state subsidies will be required to replace traditional federal subsidies to pay for the excess of costs over benefits.

In 2013, the cash-strapped Washington Legislature wisely tasked independent economists to study the latest Yakima Basin proposal.  In December, a team of Washington State Water Resource Center economists concluded that costs of water supply projects in the Yakima Basin – including new dams – outweigh benefits by 90 percent or more. In contrast, proposed fisheries enhancement projects of importance to tribes and the general public are cost effective. (Read: “Benefit-Cost Analysis of the Yakima Basin Integrated Plan Projects.”)

Public subsidy for new irrigation projects needs to end. Dust Bowl-era justifications no longer apply to an increasingly corporate agricultural sector. Governments struggle to pay for public necessities such as education, health care and even maintenance backlogs for existing dams and water projects. New and expanded water projects are simply not affordable.

We are at the end of the water frontier. Water-project proponents in Washington, D.C., and Olympia must acknowledge that federal irrigation projects in Eastern Washington don’t pencil out. It is time to end wasteful feasibility studies, close the chapter and move on. There are more affordable means of sustaining profitable agriculture in Eastern Washington.

John Osborn is a Spokane physician and conservationist with the Center for Environmental Law & Policy and the Sierra Club. Ken Hammond is retired professor and chairman of the department of geography at Central Washington University and has been active for decades in water planning.