Proponents say a single, smaller tunnel coupled with investments such as water recycling and desalination would result in more water for cities and farms. They say it also would be better for the environment and cost less - with construction estimated at $5 billion to $7 billion.
Agricultural groups say a scaled-down water conveyance would be devastating to farmers in the Central Valley, who rely on the delta to irrigate thousands of acres of crops.
The proposal is a sign of how California's water wars have evolved.
"The big fight over the delta used to be between environmentalists and thirsty cities who wanted more water," said Barry Nelson, senior policy analyst at Natural Resources Defense Council, which supports the alternative. "But now, there's a growing list of cities whose plan it is to become less reliant on the delta and to invest in local solutions. There's common ground there."
The health of the delta, the hub of California's water delivery system, has long been deteriorating. Massive pumps which draw drinking water for more than 25 million Californians and irrigate vast expanses of crops are blamed for declines in once-abundant fish populations.
Declines in tiny delta smelt, salmon and other species have spurred regulations that curtail delta pumping. In dry years, limited water deliveries have led some farmers to let fields lie fallow and communities to impose water-use restrictions.
In July, Brown and Interior Secretary Ken Salazar announced support for massive 35-mile twin tunnels to carry water south. The proposal also includes plans for more than 100,000 acres of floodplain and tidal marsh habitat restoration.
The project, called the Bay Delta Conservation Plan, must satisfy two goals: restore the estuary's fragile ecosystem and provide a more stable water supply to residents and farmers.
Officials say the tunnels would divert water beneath the delta, lessening the impact of pumps on fish. The amount of water to be diverted would be determined once the project is built, based on the health of the species.
The entire project would cost $23 billion. Water agencies would pay $14 billion for construction and $5.8 billion for operations. Some $3.2 billion for habitat restoration would come from a voter-approved bond on the November 2014 ballot.
During his State of the State address Thursday, Brown said construction costs would be similar to the London Olympics. "But this project will serve California for hundreds of years."
Environmental groups and seven water agencies want the state to examine their newest proposal as a stand-alone alternative during the environmental review process, which is be completed by the end of the year. State officials will decide whether to include the new alternative for consideration.
In addition to a smaller conveyance and investment into local projects, the new proposal includes strengthening delta levees to protect the water supply from earthquakes, investing in more south-of-delta storage, and 40,000 acres of habitat restoration. Total cost is estimated at $14 billion to $16 billion.
Following the Legislature's 2009 mandate to reduce reliance on the delta, many urban and agricultural water agencies have been developing innovative local projects and water efficiencies. But those measures are not being considered by the state, said San Diego County Water Authority's assistant general manager Dennis Cushman. San Diego, which supports the new proposal, serves 3.1 million residents in San Diego and 23 other cities and agencies.
"It's critically important to first understand what the real demand for water from the delta is, before decisions are made about project size, scope and cost," Cushman said.
The San Diego County Water Authority once got 95 percent of its water from the Metropolitan Water District, the giant Los-Angeles based wholesaler which gets water from the delta and the Colorado River.
But by developing various local projects, San Diego now gets only half its water from MWD.
Cushman said investing in two pricy delta tunnels might not make sense for his district.
"The state's approach right now is to build the biggest project they can build, invest $14 billion and find out 10 years down line what supply water districts get," Cushman said.
To environmentalists, making a water project affordable for the water agencies that will finance it is key.
"If the project proposed by the governor cannot be paid for, that would leave us with the status quo and the species would continue their march to extinction," said Jonas Minton, water policy adviser for the Planning and Conservation League.
State officials say they already are examining a smaller tunnel alternative. That alternative does not include local water supply development or other aspects of the new proposal, because the BDCP is focused on delta conservation, said Karla Nemeth of the California Natural Resources Agency.
"We won't get any credit for preserving the delta smelt because of a local water supply project in San Diego," Nemeth said.
Agricultural groups and water districts say the new proposal would leave farmers high and dry.
"The proposal doesn't provide enough water to meet agricultural needs," said Mike Wade, executive director for the California Farm Water Coalition. "Developing local supply projects is a fine idea, but they don't address water reliability."
A scaled-down conveyance, Wade said, could lead water contractors who serve farmers to continue relying on the existing delta water conveyance - meaning fish would continue being dragged into the pumps and killed.
A small tunnel would also not allow the shipment and storage of larger amounts of water during wet years, thereby making the water supply less reliable during dry years, he said.
While agricultural water districts are developing water efficiencies, they'll still need plenty of water from the delta to irrigate crops, said Brent Walthall, assistant general manager, Kern County Water Agency, which mostly serves farmers and has not taken a position on the tunnel proposals.
"We're hoping the water project will be successful," Walthall said, "and that it's affordable for us."