Controversial Santa Clara County dam expansion scrapped

One of Valley Water’s most controversial and costly projects has been shelved indefinitely.

The water district’s board of directors unanimously voted Tuesday to suspend the Pacheco Dam expansion project after eight years, which would have brought the dam’s water capacity from 5,500 acre feet of water to 140,000 acre feet of water. Directors cited the skyrocketing billion-dollar price tag and repeated delays as reasons for the suspension. The latest estimates show costs ballooning to $3.2 billion and construction not beginning until 2029 at the earliest.

“Our board’s responsibility is to balance water reliability with affordability, and we are deeply concerned that moving forward with Pacheco would place too great a burden on our ratepayers without cost-effective benefits,” Board Chair Tony Estremera said in a news release.

Valley Water has already spent $100 million on the project, including $24.4 million of a $504 million state grant, according to spokesperson Matt Keller. Estremera said the district will withdraw from the grant and return the remaining funding.

Another new obstacle presented at the meeting is the U.S. Bureau of Reclamation’s denial of Valley Water’s request to import Central Valley Project (CVP) water into the expanded Pacheco Dam. The report said federal representatives see the project’s main benefits as environmental rather than for increasing water supply, and that they’d only benefit Valley Water.

Aaron Baker, Valley Water’s chief operating officer of water utility, said at the meeting CVP is Valley Water’s largest imported water supply. To use non-CVP water, the district would need a long-term Warren Act contract, which is an exchange of water rights managed by the Bureau of Reclamation. Baker said this could take even more time and come with restrictions.

“This is a significant setback as it greatly limits the project’s viability and reduces opportunities for partnerships,” Baker said at the meeting.

Valley Water first unveiled its plans in 2017 to build a dam that would expand Pacheco Reservoir to increase the local water supply amid an ongoing drought. The proposed site is about a 30-minute drive east of Gilroy, between Henry W. Coe State Park and Pacheco State Park.

At the time, cost estimates pegged the project at about $970 million. By 2019, that price had risen to about $1.2 billion, adjusting for inflation. Fast forward to 2021 and the cost ballooned to $2.5 billion, after studies showed deeper excavations would be necessary to build the dam’s foundation. Rock quality would also require a reconstructed spillway to enhance stability, increasing the price, as well as a longer construction timeline.

A coalition of environmental advocates, local Indigenous tribes and landowners have been pushing the board to cancel the project for years, even suing Valley Water in 2022. Osha Meserve, a representative from the Stop Pacheco Dam coalition, said the group is glad to hear of the board’s decision.

“We applaud Valley Water’s decision to finally stop pursuing this unsustainable project the ratepayers could not afford,” Osha Meserve told San José Spotlight. “Now that Pacheco Pass will be spared from destruction, we hope that going forward, Valley Water will work with communities, tribes and water experts to identify smarter water supply solutions with broad support.”

Katja Irvin, Guadalupe group conservation chair for the Sierra Club’s Loma Prieta Chapter, said they’re “ecstatic” the project’s being shelved.

The project would have impacted more than 28,000 acres of designated critical habitat around the assessment area. Irvin said it would have destroyed dozens of landscapes with unique plants, such as a rare Sycamore woodlands habitat and various animal species including California red-legged frogs and the California tiger salamander.

“There’s always issues to look at, but this one was so huge it was just so much more important and more environmentally impactful than anything else they’re doing, exponentially more, so this is such a relief,” Irvin told San José Spotlight. “It’s a happy day for the environment.”
In suspending the project, directors told district staff to research other ways to increase water storage and supply in the county, and to come back with a presentation within a few months. Irvin said she’ll be keeping an eye on future Valley Water projects and the environmental impacts. She wants the district to look for ways to reduce its reliance on the San Francisco Bay Delta.

Director Rebecca Eisenberg said this is a good opportunity to increase investments in water recycling or desalination, which could increase the district’s water supply.

“This is a long time coming, but we don’t need to look backwards,” Eisenberg said at the meeting. “We can look forward and I’m thrilled for the future.”

Story updated Aug. 27 at 7:21 p.m. Original story published Aug. 27 at 4:30 p.m.

Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X.