Sites Reservoir Costs Balloon: Are We Still Pretending This Project Makes Sense?
The Sites Reservoir project just got a lot more expensive—and harder to justify. At its June 20 meeting, the Sites Project Authority revealed that the cost of building the reservoir has increased to between $6.2 and $6.8 billion in 2025 dollars—over 50% from previous estimates. This news was confirmed again in July at a California Water Commission meeting (CWC staff presentation, Sites Project Authority Presentation). This cemented what many of us have long known: mega water projects like Sites almost always cost far more than initial estimates. We also know that they are often victims to cost overruns, which aren’t even factored into this updated cost estimate.
Previous estimates from 2019 and 2021 relied on rosy projections that underestimated costs and overstated benefits. Reality is unfortunately catching up, for the Sites project investors (also called “Partners”). The Authority claims that its conclusions remain the same about (1) affordability of project water and (2) project benefits, despite the increased costs. The public deserves an updated analysis with appropriate scrutiny of costs and benefits of the project.
The Inflated Costs Proves Our Concerns
Friends of the River and our partners warned about these cost issues long ago. In expert testimony submitted to the State Water Board, economist Dr. Mark Buckley explained that Sites’ costs were already on an upward trajectory, and that the project’s water deliveries would be increasingly limited by climate change and environmental protections—driving up the cost per acre-foot of water. Likewise, Dr. Jeff Michael testified that, with California’s flat population growth and declining urban water demand, major infrastructure investments like Sites do not align with the state’s needs and would only worsen our cost-of-living crisis.
We were right then—and this 50% cost hike confirms it.
Further, the Proposition 1 “public benefits,” which would fund nearly $1 billion in project costs, are being called into question. When Californians approved Prop 1 in 2014, they were promised water projects that would provide significant “public benefits” like ecosystem restoration and flood control. The Sites Project is struggling to prove that it will provide meaningful benefits, and its benefits have been consistently revised downward. In fact, the California Department of Fish and Wildlife recently concluded that a major Prop 1 benefit—food for Delta smelt in the Yolo Bypass—is not workable and is off the table.
Instead of reassessing this troubled project, it keeps getting more lipstick, with hopes that no one notices that the math no longer works. But the numbers don’t lie: a nearly $7 billion price tag, with reduced water availability and declining state and federal benefits is not a recipe for success. It’s a boondoggle. We see this story play out time and time again with water mega-infrastructure projects.
There Is A Better Way Forward
We don’t need another billion-dollar dam. California can meet its water needs with 21st century solutions: local water supply projects, conservation, recycling, land retirement, and groundwater recharge. These approaches are cheaper, faster, and better for our rivers and communities.
Friends of the River will continue to hold the Sites Project to account. Our recent motion to admit this cost evidence into the State Water Board’s record for the water rights proceeding underscores what we’ve been saying all along: Sites Reservoir is a bad deal for California’s environment, taxpayers, and ratepayers.
