April 17, 2023
SENT VIA EMAIL (cwc@water.ca.gov)
Chair Matthew Swanson and California Water Commission Members
California Water Commission
P.O. Box 942836
Sacramento, California 94236-0001
RE: Pacheco Dam Project Reevaluation Request
Dear Chair Swanson and Members of the California Water Commission:
This letter is written on behalf of the Stop the Pacheco Dam Project Coalition, Sierra Club California, and the Sierra Club Loma Prieta Chapter. Our groups are concerned that the Pacheco Dam Project (“project”) does not meet public funding requirements under Proposition 1 and has failed to progress in a satisfactory manner.
Based on discussions at the March 15, 2023, California Water Commission (“Commission”) meeting and the March 16, 2023, Santa Clara Valley Water District (“Valley Water”) Board meeting, we request that the Commission require Valley Water to provide updated information regarding why the project has been delayed several years and whether the project is still technically and financially feasible, and for the Commission to determine whether the project’s Water Storage Investment Program (“WSIP”) funding should be reconsidered.
New Information Regarding the Commission’s Authority and Its Ability to Obtain Updated Information from Project Proponents
Agenda item 9 of the Commission’s March 15, 2023, meeting included an update on the progress of the WSIP projects.1 During the Commission’s discussion of the item, several Commissioners requested clarification about what actions could be taken if projects are not progressing in a satisfactory manner. Commissioner Makler stated that he would like to know whether the Willow Springs Water Bank project is moving forward sooner rather than later in order to reallocate those funds.
Commissioner Makler requested additional briefing from the Willow Spring project proponents to discuss the project’s progress. Commissioner Steiner verified with staff that the Commission has the authority to request project proponents to provide an update regarding what has been done, and what is anticipated to be completed.2 Further, the Commissioner noted that internal deadlines for the project proponents may be provided by the Commission to ensure adequate progress is being made. The Commission’s counsel clarified that the Commission may request updates, and could decide at a properly agendized meeting that a project is not appropriately progressing, and make additional recommendations or determinations.
Valley Water’s Draft Environmental Review Is Inadequate and Is Nowhere Near Complete
The Pacheco Dam review process is still incomplete and is extremely behind schedule. Apparently in order to maintain funding eligibility under Proposition 1 (see Cal. Code Regs., tit. 23, § 6013, subd. (f)(2)), Valley Water hurriedly released its Draft Environmental Impact Report (“DEIR”) on November 17, 2021.3 The proposed project described in the DEIR was a hardfill dam, even though the Department of Water Resources (“DWR”) Division of Safety of Dams (“DSOD”) had already rejected the hardfill dam proposal in October 2021; this was formalized in a November 1, 2021 letter. (Exhibit 1, November 1, 2021, DSOD Letter.) The DEIR thus focused its analysis on a proposed project that had already been deemed technically infeasible.
In addition to analyzing an infeasible proposed project, the DEIR’s content was woefully inadequate. Numerous public agencies, both state and federal, along with dozens of nonprofit and tribal entities, submitted hundreds of letters describing the document’s extensive inadequacies.4 To rectify these deficiencies, Valley Water now proposes to produce another DEIR in May 2025.5 Moreover, although the new Dam project would require federal environmental review under the National Environmental Policy Act (42 U.S.C. § 4332 et seq.), that review process has not yet formally begun.
Valley Water should explain why it would take more than two years to produce a recirculated DEIR and a Draft Environmental Impact Statement, along with how it will address the numerous problems that plagued its last round of environmental documentation. Gathering this information is not only important to evaluating the project’s feasibility, but is also intertwined with the State’s concerns about delays in Proposition 1 funding.6
Too Much Funding Has Already Been Wasted on Pacheco Dam
As determined at the March 15, 2023, Commission meeting, the Commission can choose to rescind a project’s funding and reallocate those funds to other projects. Valley Water obtained the second-highest funding award at $504,141,383.7 Valley Water has already spent more than $60 million with only a faulty DEIR, and an infeasible project design to show for it. The Commission should not continue to spend public funds on a project that does not appear to be financially or technically viable.
Additionally, as the cost has continued to increase, the cost-benefit analysis provided at the Commission’s June 28, 2018 meeting is no longer accurate.8 The PowerPoint Presentation for that meeting stated that the project’s benefit/cost ratio was 1.12. (Exhibit 2, June 28, 2018, Application Scores and Commission Determinations Presentation, p. 14.) This ratio was obtained because the total project benefits were claimed to be $1.222 billion,9 and the project cost was estimated at $1.094 billion. (Exhibit 2, p. 14.) This is no longer the case. Capital costs are now estimated to be roughly $2.7 billion (with a total project cost of roughly $6 billion), and there is no indication that benefits have increased. Thus, the benefit/cost ratio is now roughly 0.45. Therefore, not only has Valley Water failed to provide a feasible project, but the cost has escalated at such a rate that the costs exceed the project’s previously calculated benefits.
New Information Regarding Valley Water’s Still Unfulfilled 35 Percent Partnership Assumption
The Pacheco Dam project’s infeasibility is also illustrated by the lack of partners that have committed to help fund the project. In 2018, the Valley Water Board directed staff to assume that the Pacheco Dam Project would have funding partnerships of at least 35 percent.10 Since then, all Valley Water budget publications and planning documents have assumed that 35 percent of the project cost would be covered by other partner agencies. To date, however, not a single agency has formally agreed to share in the cost of the project. This situation is in contrast with other WSIP projects, such as the Los Vaqueros Reservoir Expansion Project; as of September 2021, Los Vaqueros had eight member agencies that had signed on to the Joint Powers Authority.11
During Valley Water’s March 16, 2023, Special Meeting, multiple directors inquired about the 35 percent partnership assumption. In response, Director Estremera provided clarification about the origins of that assumption. He stated, “I made the motion with respect to the 35 percent participation, at least the Board at the time felt that if we did not have partners, we would not do this, we just would not do this project and so having said that to the public, we wanted to make sure that all of our assumptions included that proviso.”12 Currently, there is no indication that Valley Water will have any partnership funding, much less 35 percent partner funding. Therefore, it is possible that Valley Water Board may consider abandoning the project based on a lack of partnerships in the near future.
Conclusion
The new Pacheco Dam Project continues to be mired by deficient planning, increasing costs, and growing questions about Valley Water’s desire and ability to complete project milestones, despite expending more than $60 million. Our coalition believes it would be appropriate for the Commission to inquire about the progress and continued feasibility of the Pacheco Dam Project at this time. As this project has become technically, environmentally and/or financially infeasible, no further Proposition 1 funds should be spent on it. (See Cal. Code Regs., tit 23, § 6013, subd. (f).)
Thank you for considering this information and please feel free to contact me (osha@semlawyers.com, 916-455-7300) with any questions.
Very truly yours,
Sierra Club Loma Prieta Chapter
By: Katja Irvin, AICP
Conservation Committee
Sierra Club California
By: Molly Culton
Senior Conservation and Digital Organizer
Stop the Pacheco Dam Project Coalition
By: Osha R. Meserve
Attachments: Exhibit 1, November 1, 2021, DSOD Letter
Exhibit 2, June 28, 2018, Application Scores and Commission Determinations Presentation
cc (sent via email):
Members of the California Water Commission
Matthew Swanson, Chair (Matthew.Swanson@cwc.ca.gov)
Fern Steiner, Vice Chair (Fern.Steiner@cwc.ca.gov)
Samantha Arthur (Samantha.Arthur@cwc.ca.gov)
Daniel Curtin (Daniel.Curtin@cwc.ca.gov)
Kimberly Gallagher (Kimberly.Gallagher@cwc.ca.gov)
Alexandre Makler (Alexandre.Makler@cwc.ca.gov)
Jose Solorio (Jose.Solorio@cwc.ca.gov)
Joe Yun, Executive Director (joseph.yun@water.ca.gov)
Holly Stout, Legal Counsel (holly.stout@water.ca.gov)
1 The meeting agenda can be accessed at: https://cwc.ca.gov/Meetings/AllMeetings/2023/Meeting-of-the-California-Water-Commission-Mar-15-2023.
2 The video recording can be accessed at: https://www.water-ca.com/archives.html. The relevant discussion occurs between 1:22:00 and 1:53:20.
3 The Pacheco Dam Project DEIR can be accessed at: https://www.valleywater.org/node/1898.
4 Many of the public comments can be accessed at: https://stoppachecodam.org/public-concerns/draft-environmental-impact-report-deircomments-2022/.
5 The updated timelines for the WSIP projects can be accessed at: https://cwc.ca.gov/-/media/CWCWebsite/Files/Documents/2023/03_March/March2023_Item_9_Attach_1_PowerPoint_Fi nal.pdf
6 Governor’s Office Fact Sheet: 6 Ways California is Harnessing Winter Storms to Boost Water Supplies [The Natural Resources Agency established a strike team to help move projects toward completion.] The document can be accessed at: https://www.gov.ca.gov/wp-content/uploads/2023/02/FACT-SHEET_-Winter-Stormsand-Water-Supply-updated.pdf?emrc=63fbfb84899bf.
7 See Proposition 1, Chapter 8 Conditional Amounts, available at: https://cwc.ca.gov/Water-Storage.
8 California Water Commission Meeting June 28, 2018, available at: https://calspan.org/meeting/cwc_20180628/.
9 Prior correspondence to the Commission from Stop the Pacheco Dam Coalition explains how the claimed benefits are wildly overstated. Dr. Jeffrey Michael’s report titled Review of the Pacheco Dam Feasibility Documentation: New Pacheco Dam is Economically and Financially Infeasible, available at: https://stoppachecodam.org/wpcontent/uploads/2021/11/21.11.29-Pacheco-Dam-Feasibility-Review_final-003.pdf.
10 Valley Water Special Meeting, March 16, 2023, available at: https://scvwd.granicus.com/MediaPlayer.php?view_id=3&clip_id=2078 (discussion of the previous decision regarding the 35 percent partnership begins at 1:54:55).
11 The Los Vaqueros Reservoir Joint Powers Authority Agreement, available at: https://img1.wsimg.com/blobby/go/b7bc6bb0-42f8-4e51-8df7- 1b624c766dd9/downloads/Los%20Vaqueros%20Reservoir%20Joint%20Exercise%20of %20Power.pdf?ver=1679410743109
12 Valley Water March 16, 2023, Special Meeting, available at: https://scvwd.granicus.com/MediaPlayer.php?view_id=3&clip_id=2078 (Director Estremera clarification begins at 1:55:00).