Newsom unveils new cost estimate for California’s delta tunnel

By Camille von Kaenel | 05/16/2024 04:01 PM EDT

The administration is estimating costs of construction and operation at $20.1 billion, up from $16 billion due to inflation.

California's Westlands Water District of the Central Valley.

Canals in California's Westlands Water District of the Central Valley carry water to Southern California in 2009. Russel A. Daniels/AP

SACRAMENTO, California — Democratic Gov. Gavin Newsom has a new price tag for his controversial proposal to replumb the state’s main water delivery hub via a new tunnel: $20.1 billion.

The estimate is part of a cost-benefit analysis his administration released Thursday, targeted at the Southern California cities that would receive the water but have yet to decide whether or not to fund the project’s construction. Under the analysis, the tunnel underneath the Sacramento-San Joaquin Delta would create $2.20 in benefits for every dollar spent by stabilizing water supplies and bolstering the state’s system of levees, pipes and reservoirs against the risk of earthquakes, though that number changes under different climate change scenarios.

“The project readily passes a cost benefit test,” Karla Nemeth, the director of the state Department of Water Resources, said in an interview. “It’s a $20 billion project that supports a $2.3 trillion economy.”


Newsom called the Delta Conveyance Project his administration’s “No. 1 climate resilience program” when presenting his budget proposal last week. But fishing and environmental groups, as well as local delta communities, have long opposed the project, which former Gov. Jerry Brown once championed under a different version as a “peripheral canal.” The project will likely continue to face significant litigation, but its fate also depends on whether big water agencies — most notably the Metropolitan Water District of Southern California, which provides water to nearly half of all Californians — agree to foot its bill.