California Scraps $3.2 Billion Pacheco Dam Expansion After $100 Million Investment

SANTA CLARA COUNTY, CA – The Pacheco Dam expansion project, a highly ambitious and controversial water storage initiative in Santa Clara County, has been indefinitely shelved by the Valley Water board of directors. The decision comes after eight years of planning, during which the project's estimated cost ballooned from an initial $970 million to an estimated $3.2 billion, with approximately $100 million already spent on development.

Valley Water cited escalating costs, repeated delays, and a recent denial from the U.S. Bureau of Reclamation regarding imported water rights as primary reasons for the suspension. Board Chair Tony Estremera stated that proceeding with the project would place "too great a burden on our ratepayers without cost-effective benefits." The district will withdraw from a $504 million state grant, returning the remaining funds.

Environmental advocates, local Indigenous tribes, and landowners formed a coalition to oppose the project, even filing a lawsuit against Valley Water in 2022. Osha Meserve, a representative from the Stop Pacheco Dam coalition, expressed approval of the board's decision, emphasizing that the project was "unsustainable" and unaffordable for ratepayers. The proposed dam would have expanded the reservoir's capacity from 5,500 acre-feet to 140,000 acre-feet.

Opponents highlighted the significant environmental impact, including the potential destruction of over 28,000 acres of designated critical habitat and unique plant and animal species like the California red-legged frog. The project also faced challenges in securing necessary water rights, further complicating its viability.

The cancellation underscores the complex challenges facing California's water infrastructure development, where ambitious projects often encounter substantial financial and environmental hurdles. Valley Water is now tasked with researching alternative strategies to enhance water storage and supply for Santa Clara County residents.