Mar 29, 2022
A third straight drought year poses major challenges for California’s environment, cities and farms. While cooperation, collaboration and innovation are needed in the short term, many feel a major part of the long-term water solution is additional storage.
A remote area on the west side of the Sacramento Valley could be a big part of the solution. Sites Reservoir has been debated for decades, and getting this critical addition to water infrastructure appears more likely than ever.
One major development in getting this project completed is the U.S. Environmental Protection Agency earlier this month formally invited the Sites Project Authority to apply for a $2.2 billion low-interest loan through the Water Infrastructure Finance and Innovation Act, which would bring the project significantly closer to construction and completion.
Jerry Brown“This really is a game changer,” said Sites Project Authority General Manager Jerry Brown. “Additive to the other sources of funds that we have, a prior loan from USDA and Proposition 1 funds from the state and federal sources, really rounds out our financing picture to a great extent. This puts us on a to track where we are now in a position to fund construction of the project, which is really exciting!”
Brown said there are several steps needed, including applying for a new water right to the State Water Resources Control Board. There are other permits needed from the state and federal government. If all goes as hoped, ground will be broken in 2024 and the new reservoir will be in place in 2030.
He said if Sites were in place prior to the wet years of 2017 and 2019, it would have been completely full at 1.5 million acre feet to start 2020, and would have been able to provide about 400,000 acre feet of water for the state’s cities, farm and environment.
Brown said while Sites will provide significant benefits for urban and agricultural customers, it’s commitment for environmental water will set it apart from all other projects.
“I don’t think there’s ever been a project like Sites that will provide the kind of assets and benefits for environmental purposes.”
As the drought will provide significant impacts to the Sacramento Valley and state in the months ahead, hopefully getting Sites Reservoir built will provide major help in the future; especially vital considering our volatile climate.
Episode Transcript
Jim Morris: After a promising start to the rainy season, California has gone extremely dry. The lack of water provides serious widespread challenges. As our climate volatility grows, the need for a more reliable water supply is even more vital. For a growing number of people, that's where Sites Reservoir comes into play.
Jim Morris: Welcome to Ingrained, the California Rice Podcast. I'm your host, Jim Morris, proud to have worked with California farmers and ranchers for more than 30 years to help tell their stories. A lack of rain and snow has extended the drought for a third year, creating the likelihood of widespread pain. One hopeful sign for the future would be carrying out a project that's been discussed and debated for decades, Sites Reservoir. Jerry Brown is general manager of the Sites Project Authority. Jerry, let's start with key updates on the project. First, can you relay the big news from the US Environmental Protection Agency, what happened, and how important is this news?
Jerry Brown: This really is a game changer. What happened was the Environmental Protection Agency is making an invitation to the Sites Reservoir Project to apply for what's called a WIFIA loan, Water Infrastructure And Finance Investment Act. And what that is, is a mechanism by which the federal government makes a loan available to a project like Sites. In this case, it's in an amount of about 49 percent of the project cost, which for Sites is roughly $2.2 billion. So it's a $2.2 billion loan that has been offered to the Sites Reservoir Project, and, additive to the other sources of funds that we have, a prior loan from USDA, the Proposition One money from the state, and the federal sources really rounds out our financing picture to a great extent and puts us on a track to where we are now in a position to fund the construction of the project, so that's pretty exciting.
Jim Morris: Let's talk about that construction. Realistically, and perhaps optimistically, what is your timeframe that you're looking at?
Jerry Brown: The loan doesn't really necessarily accelerate the project. There's still several steps that we have to take to get to the point where we can start construction. Probably most notable is the upcoming application that we're making for our water right. We are going to be seeking a new water right for the Sites Project, and that will be submitted within the next month. And, with that, it will kick off about an 18 to 24 month period that the State Water Resources Control Board takes to evaluate our application and make a final determination as to the water right that will be established for the project.
Beyond that, there are some very critical permits that we need to secure through the Fish and Wildlife Service of both the state and the federal government. Those are under way. We've made an application recently for one of those, and there's a couple more to do, and we expect those to occur within the next 18 to 24 months, as well. So those critical activities will lead up to the point in time when we will be able to have the assets in place to then secure the loan with the federal government through WIFIA. Once that occurs, we'll be able to initiate construction fairly shortly after that. So, hopefully, by mid to late 2024, we'll start construction. And it's about a six-year period, which would put us at operational completion in about 2030.
Jim Morris: If Sites were in place now, how much of a difference would it make?
Jerry Brown: Because largely of the 2017, 2019 wet years, if we would've had Sites in place then, Sites would've started the 2020 year completely full at a million and a half acre feet. We estimated last year, had we had Sites in place, we would've had about a million acre feet of water in the reservoir for the farms and cities and environment. With the use that was projected last year, we would probably have about 400,000 acre feet available this year, which is still a very substantial amount, especially considering the very low conditions at our upstream reservoirs, Shasta, Oroville, Folsom.
Jim Morris: We have three distinct segments in California, and they sometimes intertwine, the environment, cities, and farms. How would each of these benefit if Sites is built?
Jerry Brown: The one piece of this, while I believe the benefits for the cities and farms are very important and necessary to make the project work, is the environmental element. I don't think there's ever been a project like Sites that will provide the kind of assets and benefits for environmental purposes. We're still figuring the final participation by the federal government, but, on a high end, there could be up to around 40 percent of the project, the Sites Project, that would be dedicated for environmental purposes. And that is huge, because never before has the state or the federal government owned and operated an asset like Sites, that will have both storage and water supply for the environment in the driest of years.
And with that, we recently entered into some collaboration with some environmental groups to evaluate how we can optimize the use of this environmental storage to provide the optimum benefit for all the different environmental objectives that are out there. So we're super excited about that. And the board is very committed to this as a component of the project.
I think one other thing to note, one of the criticisms about the Proposition One investment in environmental purposes is that maybe it's going to be somewhat of a bait and switch where we say we're going to do something, and then, when times get tough, it's not going to happen. But I can tell you with a hundred percent confidence that this board and this project is going to seek to have an ironclad contract with the environment, with the State of California, to the point where, as long as there's a California, there will be an environmental component to the Sites Reservoir.
Jim Morris: When you look at rice, we have shown that you can grow a crop that's very helpful for our cuisine and incredible for our economy, but then we also have the Pacific Flyway Benefits, and looks like salmon will be benefiting from rice farming as well. So does it need to be an or conversation, or can Sites be part of a greater and picture that help our water overall in California?
Jerry Brown: I've been involved in California water for decades. And we are at a stage where it seems like we are at odds a lot in terms of what kind of strategy to take to improve our situation. There's the or camp, which seems to be of a mindset that we can extend and optimize what we have. That we don't need to do much of anything, but we just need to conserve and recycle, and that will take care of all of our issues.
That is a strategy, but I believe that what we're seeing today and the stresses that are occurring in our natural and developed systems, which are significant, we're seeing the results of that just an or strategy. There is an element to extending our supplies that we have, but there's also the and part of this, which is we need to build new facilities and find smart ways to extend the resources that we have to provide for the changing climate, the growing population, and all the needs of California, including the environment. And we think Sites Reservoir is a great tool that will allow us to do the and.
Jim Morris: I've lived in the Sacramento Valley my entire life. And, I have to say, it's a big concern when we look at what the drought is doing to our region. So let's talk about some optimism. If not now, when would this ever happen? What kind of momentum do you see for this project, and what kind of optimism do you have at this time that this is going to get done and help our state?
Jerry Brown: We are at a critical juncture where the Sites Reservoir and other storage projects, whether it be groundwater, storage, or surface storage, recycled water, conservation, desalination, all of these things are necessary to secure our future. And with SGMA, with the stresses that our existing resources are under, we have to invest. And I think more and more people are recognizing that. Somebody asked me this the other day, "What is different today than maybe 10 or 20 years ago in terms of the possibilities for Sites Reservoir?"
And I think a big part of it is the recognition of the changing climate and the effect that that's having on the availability of our water supplies. And, I think, people see the sensibilities of essentially providing additional storage of water, so that as we get more of our precipitation in the form of rain instead of snow, that we have someplace that is reserving this supply, diverting it during the wettest periods, when that can be done safely, and saving it for the dry periods when we really need it most, all of us.
Jim Morris: I appreciate Jerry Brown taking time to visit on this key project. As the year progresses, we will keep you updated on developments with Sites Reservoir, as well as drought impacts in the Sacramento Valley. You can find out much more at podcast.calrice.org. We appreciate your comments, questions, and reviews. Thanks for listening.