State Approves $7 Billion Sites Reservoir Permit
Water agencies and contractors across California face a long construction timeline beginning in 2027.
Updated on Nov. 5, 2026 in Utilities
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The State Water Resources Control Board unanimously approved a water right permit for Sites Reservoir late Wednesday, clearing a $7 billion project that will store Sacramento River water. Construction is scheduled to begin next year, which matters for water agencies, contractors and landowners across California.
Why it matters
Board Chair E. Joaquin Esquivel said California faces more extreme droughts and floods and needs to store water during wet periods. State officials and water agency managers describe the reservoir as a critical part of the state's climate adaptation strategy, which makes it a long-term capital commitment for the water sector.
The project carries a $7 billion price tag and will inundate about 15,000 acres in a valley northwest of Sacramento. Friends of the River estimates the reservoir will add about half a percent to California's water supply on average, a figure that opponents and the project's supporters frame differently.
The players
State Water Resources Control Board
California's state agency that allocates surface water rights and issues the permits required before water can be diverted and stored.
E. Joaquin Esquivel
Chair of the State Water Resources Control Board, who has overseen the agency's water rights decisions.
Friends of the River
A California river conservation advocacy group that has analyzed the reservoir's projected contribution to the state's water supply.
The details
Water for the reservoir will be pumped from the Sacramento River and held in storage during wet periods for later use. The project's plans call for two dams about 300 feet high and nine smaller dams. Opponents urged the board to reject the permit, saying the stored water will warm the river and worsen algae blooms, and the board approved it after a heated debate.
Timeline
Late Wednesday, November 4, 2026: the board unanimously approved the water right permit.
Next year (2027): construction is scheduled to begin.
2034: construction is scheduled to conclude.
Market Landscape
Sites Reservoir is described as the state's first new major reservoir in decades, which places it outside the pattern of incremental storage expansion that has defined recent California water policy. Its scale and cost make it a benchmark for large-scale water infrastructure projects being weighed against climate-driven drought and flood risk.
Water agencies, engineering and construction firms, and landowners in and around the reservoir footprint should factor a multi-year, $7 billion capital program into their planning horizons. Businesses that depend on Sacramento River water supplies should monitor the project's operational schedule and any environmental conditions tied to the permit.
The takeaway
Operators in water-dependent industries should treat Sites Reservoir as a long-horizon infrastructure signal rather than a near-term supply change, since it adds about half a percent to average supply and construction runs through 2034. Track the 2027 construction start and any ongoing environmental disputes over river temperature and algae, as these could affect the project's schedule and cost.
What happens next
Construction of Sites Reservoir is scheduled to begin next year, with completion targeted for 2034. Operators and contractors tracking the project should watch for the start of construction in 2027.
Further reading
For more on how the state's utilities and water infrastructure are planned and financed, see Utilities coverage in California.
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Do you think California should spend $7 billion on Sites Reservoir?
