YBSA Monthly Report December, 2014
YBSA Monthly Report
December, 2014
Benefit-Costs of the seven elements of the Integrated Plan: The Washington State Legislature authorized in the Capital Budget for 2013, the preparation of a separate benefit-cost analysis for each of the projects proposed in the Integrated Plan.
The WSU Washington State Water Research Center presented their report on the benefit-cost of individual projects in the Integrated Plan to the Yakima River Basin Water Enhancement Project Work Group.
The economic study pointed out the following:
1. The major storage projects of the Integrated Plan, when implemented together, are unlikely to provide positive net benefits.
2. Net benefits for individual water storage projects are negative, with some exceptions under the most adverse climate and water market conditions
3. Instream flow benefits for fish are insufficient to support water storage infrastructure given the net benefit shortfall in out-of-stream use benefits, but proposed instream flows may be supportable through market purchases.
4. Insufficient evidence exists to assess the economic efficacy of fish habitat restoration with a useful degree of precision.
5. Reservoir fish passage projects are likely to provide positive net benefits through their pivotal role in supporting wild Sockeye reintroduction into the basin.
6. Water markets show potential for reducing the impacts of basin wide curtailment.
The draft report can be found at www.swwrc.wsu.edu
Integrated Plan Work Group Implementation Committee Comments:
1. The Implementation Committee does not believe that a “disaggregated” evaluation of the Integrated Plan can provide a realistic assessment of the Integrated Plan’s full value. It would seem, however, to have been appropriate to provide more than just a passing recognition of the results of the aggregated benefit/cost analysis conducted by the Bureau of Reclamation in 2012, which did attempt to account for synergies among the Integrated Plan’s projects and activities. In addition, the title of the report should also be modified to clearly reflect that it is, by design, a disaggregated analysis and, as such, views the Integrated Plan in a way that is contrary to the manner in which it is actually structured and has been proposed.
2. It is important to note that the economic analysis that was conducted by the Bureau of Reclamation in 2012 did, in fact, include use of a disaggregated analysis of plan components as a starting point for conducting the aggregated analysis, Reclamation’s analysis also concluded that, when viewed in isolation, a number of the Integrated Plan projects, particularly the surface water storage projects, do not yield positive benefit/cost ratios. The Implementation Committee of the Integrated Plan Work Group does not labor under the illusion that an isolated project that is designed primarily to provide water on a
sporadic basis in response to water shortages and droughts can yield a positive benefit/cost ratio using traditional methods of evaluation.
3. We firmly believe that the Integrated Plan provides the Yakima River Basin with the tools needed to preserve the basin’s economy, to restore the basin’s once prolific salmon and steelhead runs, and to provide resiliency in the face of climate change impacts that are predicted to have devastating effects on the basin’s snowpack and mid-to-late summer stream flows.
Additional information can be found at www.usbr.gov/pn/programs/yrbwep/2011integratedplan/index.html when posted.
YBSA’s Comments on the Draft WSU Economic Impact Report of the Integrated Plan:
1. The Bureau of Reclamation’s water resources planning process involves a “plan formulation step” in which the costs of potential measures/actions are tested against their economic monetary benefits. Essentially what this involves is building the Integrated Plan from an economically justified core to a final proposal of justified increments, and those increments, which because of other non-monetary attributes, should be included. In the case of the Integrated Plan, which is now before us, plan formulation did not occur in this manner. Rather, the concept was the synergistic nature of the Integrated Plan as a whole, which in this case, bypassed the plan formulation step. An equitable distribution of the total benefits at this time is difficult and can have significant impacts on how the Integrated Plan is perceived. It is not surprising that the disaggregation of the total benefit categories results in some individual projects not having positive net benefits and a benefit to cost ration of 1 or greater.
2. Irrigation benefits are computed as the net farm revenue generated from agricultural production resulting from the proposed action; in this case providing a supplemental water supply in dry years. Net revenues reflect the crops grown, the values of those crops, and the costs incurred by the farmer in producing the crops. These are “direct benefits” and do not include “indirect benefits” which are generated as a by-product of farm production in the regional economic area and throughout the State of Washington.
Complete comments can be found at www.ybsa.org
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