January 5, 2025
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VIDEO: Weekly California Water Market Report
The Cost to Deliver State Water Project Supplies
There are no new transfers to report from last week as major market participants wait for initial Central Valley Project (CVP) allocations to be announced at the end of February. To receive their project allocations and any additional supplies, CVP and State Water Project (SWP) contractors must assess the cost to deliver water to their service areas, which fluctuate annually.
California’s Department of Water Resources (DWR) releases an annual report, Bulletin 132 (B132) to determine the charges paid to DWR by contractors within the SWP. There are two charges for SWP water:
- Delta water charge — encompasses the costs associated with transporting water through the San Francisco Bay-Delta.
- Transportation charge — incorporates the costs associated with delivering water to a contractor’s service area.
Each charge is calculated based on three components: capital costs, fixed operations and maintenance, and variable operations and maintenance.
B132 charges reveal the base cost associated with receiving water within a given water system and vary with the amount of water delivered to specific reaches along the California Aqueduct. As such, total charges are first calculated based on estimated deliveries and then recalculated in the year or two following. Deliveries made during the July-November transfer period are a factor when reassessing each actual contractor’s charges. Estimated vs. actual costs can vary widely depending on hydrology or total volume of deliveries and transfers.
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