California Concerns Over New $2.7B Reservoir

Newsweek

22-05-2025

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California state officials voiced mounting concern this week over long-standing delays and cost overruns in the proposed Pacheco Reservoir expansion, a multibillion-dollar project that has yet to secure critical permits or water rights, years after initial funding was promised, according to a report by The Mercury News.
Why It Matters
The Pacheco Reservoir Expansion Project, a joint effort by Valley Water, the San Benito County Water District, and the Pacheco Pass Water District, represents a long-term strategy to strengthen the reliability of safe, clean drinking water supplies amid the challenges of climate change.
But the project's escalating costs—now estimated at $2.7 billion, nearly triple the original $969 million estimate—and its failure to secure much-needed permits attracted scrutiny, according to the report.
Newsweek reached out to the California Water Commission and Valley Water via email for comment.
Project rendering of potential dam and expanded reservoir, northwest view toward the City of San José.
Project rendering of potential dam and expanded reservoir, northwest view toward the City of San José.
Valley Water
What To Know
Members of the California Water Commission, an agency appointed by Governor Gavin Newsom, expressed dissatisfaction Wednesday with a lack of progress and shifting timelines.
The commission had committed $504 million in state bond funding to the project seven years ago, but signaled that funding may be reconsidered if progress stalls further.
"This is more about tracking the progress and making sure these projects are all going forward rather than backward," commissioner Jose Solorio said. "Maybe down the road we do have to look at ways of lowering investments if there's not sufficient progress in terms of viability."
Commissioner Sandra Matsumoto said, "As we move forward in time, the uncertainties should be decreasing."
Matsumoto added: "But I feel like the more we hear from the public, the more additional issues are coming up that make it sound less likely."
The proposal calls for a new 320-foot earthen dam on North Fork Pacheco Creek, about two miles north of Highway 152. According to Valley Water's website, the expansion project would boost Pacheco Reservoir's operational capacity from 5,500 acre-feet to up to 140,000 acre-feet, enough to supply up to 1.4 million residents with water for one year in an emergency.
It would also reduce the frequency and severity of water shortages during droughts, according to Valley Water.
However, The Mercury News reported that the commission was told on Wednesday that the project had yet to obtain the key permits required to begin construction, had not secured the necessary water rights, and had completed just 30 percent of the design.
District officials estimated that by next year, they would have spent $132 million and completed 60 percent of the design. Delays were attributed to legal challenges from environmental groups, newly discovered geological complications, and inflation.
What People Are Saying
Melanie Richardson, Santa Clara Valley Water District's interim CEO, told the commission, per The Mercury News: "An expanded Pacheco Reservoir is an excellent option for our agency and our region...
"It would provide a critical source of emergency storage in the event of an earthquake, a levee failure, or any other catastrophe. Having Pacheco as part of our system would improve our agency's operational flexibility allowing for more efficient management of our water resources."
Shani Kleinhaus, an advocate with the Santa Clara Valley Bird Alliance, said, per The Mercury News: "Valley Water continues to spend millions of dollars on a project that will cost many, many billions and is not feasible, and encumbers taxpayers and ratepayers with unjustifiable tax and rate increases. Hopefully, you will find a way not to promote this."
What Happens Next
Officials now estimate that construction will not begin before 2029 and will not be finished until at least 2036. The initial goal was for construction to be completed by 2032.