Sites Reservoir Moves Forward: Understanding the Federal ROD and the Road Ahead

The U.S. Department of the Interior’s recent approval of a federal Record of Decision (ROD) for the proposed Sites Reservoir Project is a major milestone for one of California’s most debated new water-supply proposals. This approval advances federal environmental review and signals a clearer federal role, but debate over the project’s permitting, financing, and operations continues. The Department of the Interior, Bureau of Reclamation’s January 23, 2026, ROD essentially approves the project environmentally and allows it to move forward in a meaningful way.

Background

The Sites Reservoir is a proposed 1.5 million acre-foot off-stream reservoir planned in the Sacramento Valley near the community of Maxwell, on the border of Colusa and Glenn counties.

An off-stream reservoir means the reservoir basin would be located away from the mainstem of the Sacramento River, as opposed to being created by damming the river itself. The current project footprint is west of Maxwell, in an area where the reservoir would be impounded by a dam and conveyance infrastructure designed to move water into and out of storage.

How Off-Stream Storage Works

A helpful way to conceptualize Sites is as a large side-basin that can be filled during certain periods and used later. In terms of how it functions, water is captured during wet periods/high-flow windows when regulatory and operational constraints allow diversion without unacceptable impacts. Next is the actual conveyance of the water to the storage basin, with Sites’ planning describing a combination of existing and new conveyance components, including use of regional canal systems and new project-specific facilities.Water is then stored for later use, with the reservoir designed to hold water when it is relatively more available, to be deployed during shortages. Deliveries are shaped by contractual arrangements among participating agencies as well as environmental criteria.

This framework helps to explain a central point of controversy, being that storage does not “create” more water, but rather changes timing and availability. Whether that timing change is beneficial or harmful in a given year can depend on a number of hydrological, regulatory, and environmental factors that are not necessarily easy to predict.

Impact of Federal Record of Decision

A federal Record of Decision is the Bureau of Reclamation’s formal decision document under the National Environmental Policy Act (NEPA), issued after completion of the project’s federal Environmental Impact Statement process. It documents the agency’s selected alternative and its rationale, including mitigation and monitoring commitments.

The ROD is significant both for reducing a major layer of uncertainty by completing a key federal environmental decision step and for signaling a go-ahead for continued project development, given that the federal environmental review process has reached a defined endpoint. At the same time, an ROD is not a universal permit. For a project such as Sites, additional approvals and agreements still govern when and how the reservoir would be filled and operated.

Federal Cost Share Framework

The Department of the Interior’s announcement accompanying the ROD stated that the decision authorizes Reclamation to provide up to 25 percent of the total project cost. That figure is significant not only because it can reduce the amount that participating agencies must finance, but also because federal participation can influence the project’s overall feasibility and political durability. Relative cost share can affect local and regional agency confidence, financial structure in terms of how public funds, bonds, and participant contributions are blended, and accountability expectations, with greater commitment of public money tending to increase outside scrutiny.

Key Outstanding Approvals and Constraints

Now that a federal NEPA decision is in place, there are still several hurdles for a project of this magnitude. Water rights and diversion authority must be addressed, as the reservoir can only be filled if diversions are legally and operationally allowed. Additionally, the project must address what triggers diversion, what limits apply during sensitive periods, and how releases/deliveries interact with environmental and downstream needs. Finally, while the ROD reflects completion of federal NEPA review, other statutory pathways, such as species protections, may shape project commitments as agencies finalize permits and operating plans.

Conclusion and Implications

The Department of the Interior’s ROD moves the Sites Reservoir into a more advanced phase, but it is best understood as a milestone rather than any sort of final decision as to the project’s ultimate footprint or effects. The project will still be shaped by state water-right outcomes, enforceable diversion and operating criteria, final financing commitments, and the project’s ability to address ecological and Tribal concerns with sufficient specificity to withstand scrutiny.  

This article was originally published in the March 2026 edition of the California Water Law & Policy Reporter. It is posted here on our website with the permission of California Water Law & Policy Reporter, Argent Communications Group, Argent & Schuster, Inc., and the authors, Carson Trigueiro and Darien Key. All rights remain with the original publisher.

Carson Trigueiro is a business litigation attorney with experience in assisting with numerous types of both business and trust estate disputes. He can be reached at ctrigueiro@fennemorelaw.com.

Darien Key is a Land Use and Natural Resources Attorney based in Oakland. Darien’s practice focuses on Land Use entitlement (such as the Subdivision Map Act, Housing Accountability Act, and Builder’s Remedy), CEQA (California Environmental Quality Act), municipal law (such as the Brown Act, Public Records Act, Conflicts of Interest, etc.), water (SGMA compliance and groundwater adjudications), and related environmental laws both on the transactional side but also in litigation. He can be reached at dkey@fennemorelaw.com.