March 29, 2023

Bay Area Impact: Accelerating New California Water Storage Projects, Presented by the Bay Area Council and Venable LLP

5 min

In January, record-breaking storms dropped enough water on California to cover the entire state in about eight inches of water. But not enough of it was captured or stored, a missed opportunity for a state that has struggled with water levels in the wake of climate change.

After three consecutive years of severe drought conditions, California experienced torrential downpours and watched as water collection capacity reached its maximum. But where was the water going? What could be done to capture it? And where are the water storage projects Californians voted to support and help fund?

The Bay Area Council and Venable delved into these topics and more in the latest installment of the Bay Area Impact webinar series. Moderated by Adrian Covert, the Bay Area Council’s senior vice president for public policy, and William Sloan, a partner in Venable’s Environment and Natural Resources practice, a panel of leading water professionals discussed the status of new water storage projects, why they’re taking so long, how we can speed them up, and what more can be done to increase the state’s storage capacity.

What do these storms mean for California water levels?

2023 had a very wet start. Within the first few weeks of January, California experienced nine atmospheric rivers, causing floods and landslides, but also increasing reservoir and snowpack levels.

Compared with its typical precipitation distribution, California is already at about 75% of its April 1 statewide average. Although this has the potential to help get California past a dry spell, 2023 could still end up being another drought year with below-average water levels.

“California is having a very volatile season,” says Ellen Hanak, executive director of the Water Policy Center at the Public Policy Institute of California (PPIC). The state is in a better place than it was this time last year, and she is optimistic that reservoir capacity will fill, “as long as we don’t have a repeat of the driest three months on record like we did last year.”

Groundwater is a different story. Many parts of California have been leaning heavily on this drought reserve, even in wetter years, but Hanak explained that groundwater needs to be looked at in a more cumulative way. “We’re not going to make up the hole in the ground just with this year’s precipitation,” she stated. “As you think about ecosystems … these storms have been really helpful, but you need more than just one good wet season to really give species and ecosystems a chance to recover. So, the fish are still feeling drought.”

Are we storing enough water?

Last summer, Governor Newsom announced new state goals to increase storage capacity by 4 million acre-feet of water by 2040. The state already has money set aside for water storage expansion through Proposition One, and some of the funding is allocated to the Sites Reservoir Project, an environmentally beneficial, off-stream reservoir that will capture excess water from major storms and save it for drier periods. Jerry Brown, executive director of Sites Reservoir, describes it as a unique twenty-first century storage system, very different from the Shasta Dam, Oroville Dam, or the Folsom Dam in California.

According to Brown, Sites is a 1.5 million acre-foot storage impoundment in the small town of Maxwell in Northern California, which would increase Northern California’s water storage capacity by up to 15%. When there are large flows in the river to be captured and stored—like there were with the recent storms—the project would bring water into the Sites Reservoir from the Sacramento River via existing canal systems and hold it for times when there are very dry conditions. Brown further explained that the canal systems have the capacity to move 4,000 to 8,000 acre-feet of water a day into storage.

“This water would then be used not just for irrigation, but would be put back into the river and serve to support and improve conditions for local species,” he said. “When the water is pumped back into the river, it would then move through the delta to participants south of the project.”

Although the Sites Project has been in the works for about six decades, construction is not set to begin until 2025, with an expected completion date of 2031. This comes at a big financial cost, with one of the main criticisms being that the project is too expensive. But compared with other options in the area, Sites is actually one of the lower-cost options available. While the total cost estimate is about $4 billion, Sites is configured as a “beneficiary paying project.” Approximately 65% of the total cost would be borne by local water districts and agencies, about 20% by the state through Proposition One or other public benefits, and the remainder would be a federal cost share.

When Prop One was approved in 2014, it allocated $2.7 billion for the state to do cost matching for water storage projects, which was unique at the time. Prop One included a number of great benefits, but citizens feel it has taken too long to roll out. “On the finance side, moving at a decades-long pace is not ideal,” says William Sloan, a partner in Venable’s Environmental and Natural Resources Group. “And there are ways to do it better, but does it make sense to do it quicker?” 

Adrian Covert, senior vice president of public policy at Bay Area Council, says that “the projects aren’t really facing a delay; they are unfolding more or less on the schedule that the voters approved.” Brown and Hanak agree that there have been some hiccups and the process could be faster, but Prop One was burdened by the fact that this was a new way of doing things, including dedicating a share of water storage to environmental purposes.

Some wonder whether the water that is being passed through the river and into the ocean today is more important to people and the environment than saving a fraction, putting it into storage, and making it available for river systems and California citizens in drier years.

“The tradeoff is worthy,” Brown stated. “Especially when you consider the fact that we’re seeing the changing climate and the reduction in snowpack, which by far is our largest reservoir above ground in California that we rely on as our water supply for our communities today.”

View the full webinar and learn more about Venable's Environmental and Natural Resources practice.