Money in the Lake

A chill wind suspended a cloud of dust over the Owens Valley as the sun rose one recent spring day. “You couldn’t see the mountains,” recalled James Warren, who has spent his life below the towering eastern Sierra Nevada. “The entire valley is drying up.”

Now the bill for reversing the destruction of the valley’s watershed is coming due and is a main reason that the Los Angeles Department of Water and Power is looking for a large rate increase. The City Council turned down an 18 percent rate hike, and the DWP now proposes a 37 percent increase phased in over five years.

Since the days of William Mulholland, Los Angeles has taken water from the eastern Sierra, gradually turning the Owens Valley into a dust bowl. Two aqueducts traditionally have supplied Los Angeles with about half its water, some 450,000 acre-feet a year.

In recent years, however, legal actions brought by valley residents and federal and state authorities are forcing the city to take less water from the valley and carry out massive and expensive construction projects to restore the valley’s watershed.

“What I need is money,” said Gerald Gewe, DWP assistant general manager. The cost of restoration is one of the major but little-discussed reasons behind the 11 percent water-rate increase approved by the department’s board of commissioners last week, plus the department’s call for more increases in the years ahead. The City Council must approve the latest rate hike.

The department’s water-services system will be broke by 2006 unless it receives a 6.5-percent-a-year water-rate increase annually for the next five years, warned the accounting firm Deloitte & Touche in a report last week to the DWP board.

During the 1990s, the DWP entered a series of agreements to restore the Owens Valley watershed that require it to release enough water to the lake to end the regular clouds of salty dust that swirl in the wind, let water run through the river, and restore the aquifer to support vegetation. The department also has let more water flow to shrinking Mono Lake, which the city tapped in the 1940s.

When the DWP agreed to the Owens Lake dust-cleanup plan in 1998, it estimated the pipes and pumps needed to water the lakebed would cost $120 million. Today the construction cost has risen to an estimated $415 million, 70 percent of which is funded with borrowed money.


Soaring too has been the cost of a construction design and management contract with the environmental-engineering firm CH2M Hill. In 2001, three years after it entered the contract, the DWP estimated it would cost about $42 million. However, after three contract amendments the DWP commission has since approved — including two totaling $27 million that just now are being brought to the City Council for retroactive approval — payments to the firm are expected to total $106 million.

In six years, the cost of the lake project — which must be completed by the end of 2006 under a federal clean-air mandate — has more than tripled to a total of $521 million. In addition, the DWP will spend $20 million a year to operate the 30-square-mile project in perpetuity, according to Gewe.

“We’re having to buy replacement water,” Gewe said, which will total $15 million a year when the project is fully finished. The lake project will take up to 50,000 acre-feet a year of water.

Next, the department and federal EPA are preparing to restore the lower Owens River. The restoration project — on the drawing board since 1986 — will involve little in the way of capital costs, but will require the DWP to permanently lose another 18,000 acre-feet of water a year from the city’s aqueduct to the river, according to Greg James, director of the Inyo County Water Department. This will cost city water customers an added $6.3 million a year for replacement-water purchases from the Metropolitan Water District.

The DWP has dragged its heels on carrying out the plan, observed local Sierra Club activist John Walter, and meanwhile saved millions of dollars a year in replacement-water costs.

While the city already has reduced its use of ground water in the Owens Valley, every year it tries to take more than is sustainable for the environment, according to James and many valley residents. Even with reduced pumping, vegetation is dead in many areas because the water table drops below the roots of trees and plants in dry years.

“The whole watershed needs more water,” concluded Walter. Despite that local view, however, Gewe told the DWP board he hopes Los Angeles can pump more Owens Valley ground water in the years ahead.

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