A plan to build a new $2.3 billion reservoir in southern Santa Clara County passed a significant milestone on Wednesday when a key state agency ruled that it continues to qualify for nearly half a billion dollars in state funding.

The California Water Commission, a panel appointed by Gov. Gavin Newsom, voted 8-0 that the project — which would be located near Pacheco Pass and would be the largest new reservoir constructed in the Bay Area in more than 20 years — is feasible and remains eligible to receive $496 million from Proposition 1, a water bond approved by voters in 2014.

Had the commission voted no, the plan by the Santa Clara Valley Water District would have suffered a major, if not possibly fatal, setback.

“Construction projects are expensive,” said Jose Solorio, a water commission member and former Democratic state assemblyman from Orange County. “We also do know that things like water are essential, and we need to continue to have it as humans and for our natural habitat.”

The district’s plans call for a 320-foot-high earthen dam to be built on the North Fork of Pacheco Creek in rural canyons about 2 miles north of Highway 152, east of Casa de Fruta.

Construction would start in 2025 and finish in 2032. The reservoir would submerge 1,367 acres and have a 35-mile shoreline, according to a draft environmental impact report released last month.

The district hopes to take water it now stores near the site in the massive San Luis Reservoir and pipe it to a new Pacheco reservoir, filling it during wet years.

Supporters of the project — who included Bay Area business and labor leaders — said Wednesday that it is needed to capture water in dry years for use during droughts.

“This project will ensure the continued prosperity of our region, its people and businesses,” said Christopher LaBelle, a senior environmental policy associate with Silicon Valley Leadership Group, a tech industry organization based in San Jose, “and improve our water supply resilience to stressors, like climate-induced droughts, and shocks, such as a major earthquake.”

Opponents — who included a dozen environmental groups and San Jose Mayor Sam Liccardo — noted the plan’s price tag has tripled over the past four years. They said it would cause spikes in water rates for Santa Clara County residents, and flood rural land that is home to several endangered species adjacent to Henry Coe State Park. They said conservation, recycled water, and groundwater storage were better options.

“Please consider the impacts to the environment as well as low income communities,” said Molly Culton, with Sierra Club California. “This project does more harm than good.”

In the end, the commission decided the project met two key requirements by a Dec. 31 deadline: to publish a draft environmental impact study and to identify other sources of funding.

The vote is not the final say in awarding the $496 million. The project still must obtain more than a dozen permits from state and federal agencies.

“There’s a substantial amount of work that still needs to be done,” said Alexandre Makler, a water commission member who also works as a senior vice president for Calpine. “We’re just in the beginning,” he added.

Most important is finding the money to pay for it.

Even if the water district receives the state bond funding in a year or two, it so far has not secured any federal funding, or signed agreements with other Bay Area water agencies to help pay construction costs. Any shortfall would come from Santa Clara County ratepayers.

“We have far more affordable approaches to water storage,” Liccardo wrote in a letter to the commission, citing the proposed expansion of Los Vaqueros Reservoir in Contra Costa County and groundwater storage.

The proposed reservoir would hold 141,000 acre feet of water, replacing a small reservoir built on Pacheco Creek in 1939. It would be the largest reservoir built in the Bay Area since 1998 when the Contra Costa Water District built Los Vaqueros.

On Wednesday, the plan was supported by the Silicon Valley Leadership Group and the Bay Area Council, two of the region’s largest business organizations, along with the San Jose Chamber of Commerce and several major labor unions. A number of prominent Democratic leaders also supported it, including assemblymen Ash Kalra of San Jose; Marc Berman of Palo Alto; Robert Rivas of Salinas; and state Sen. Bob Wieckowski, D-Fremont.

Sierra Club California, Friends of the River, the California Native Plant Society, the Center for Biological Diversity and other environmental groups opposed it.

Source: www.mercurynews.com