The site project manager was formally invited on Thursday to apply for a $2.2 billion low-interest loan through the Water Infrastructure Finance and Innovation Act (WIFIA) to help bring the site reservoir project closer to reality.
The loan, if approved, could “significantly reduce costs for participants, making it more affordable for cities, farms and resource managers to have access to more water in dry years,” it said. the sites project authority in a statement.
The Sites project manager said Sites Reservoir is a “beneficiary-pays project,” which he says means the loan will be repaid by project participants.
“The importance of this opportunity cannot be overstated,” Fritz Durst, chairman of the Site Project Authority, said in a statement. “We thank our federal partners and the Biden administration for supporting Sites Reservoir in such a meaningful way.”
The sites project manager said WIFIA’s selection committee selected Sites Reservoir to apply for a loan after a “rigorous review process required by law”.
Established by the Water Infrastructure Funding and Innovation Act of 2014, the WIFIA program is a federal loan and guarantee program administered by the EPA, the authority said. According to the Site Project Authority, its goal is “to accelerate investment in the nation’s water infrastructure by providing long-term, low-cost federal loans for projects of regional and national importance.” The funding provided is intended to help fund drought resilience projects as well as drinking water and drinking water infrastructure projects across the country, the authority said.
The venues project manager said he submitted a letter of intent to apply for the loan in July 2021.
“For the site reservoir to be built — bringing substantial and critical environmental benefits to California — it must be affordable for our participants. This loan can get us there,” Durst said.
Jerry Brown, executive director of Sites Project Authority, said loans from WIFIA would cover about 49% of the total cost of the project. He said this specific loan would cover much of the local cost share. Brown said the state and federal cost share is separate and distinct from the WIFIA loan.
He confirmed with the appeal that the sites project manager will apply for the loan within a year.
“It’s an 18 to 24 (month) process to close the loan and start receiving funds to pay for project costs,” Brown said in an email. “The interest rate on the loan is set at closing, so given the current interest rate environment, there is a strong desire to move quickly to limit interest rate risk.”
The Site Reservoir Project, which has been underway for more than 60 years, is expected to transform Site Valley, located 10 miles west of Maxwell, where Colusa and Glenn counties meet, into a state of off-stream water storage facility that captures and stores stormwater into the Sacramento River – once all other water rights and regulatory requirements are met – to be released in critical dry years for a environmental use and for communities, farms and businesses across the state to use when needed, the call previously reported.
“Sites is unique because it wouldn’t rely on snow accumulations like Folsom and Oroville do,” Brown previously said on the call. “It would also bring a much needed water supply to the west side of the valley.”
Brown said that, if approved, the loan money would be received by mid-2024. He said the arrival of that money would coincide with the expected timeline for the initial construction of the project.
The loan money would be a tremendous boost for the project, Brown said.
“The impact is immediate because this loan represents a significant portion of the local dollars needed to support the project. This makes the project more affordable for our participating agencies,” Brown said. “That equates to a savings of about 10%, which for a project of this size is hundreds of millions of dollars. Affordability is key to moving sites forward. »
Brown said that if the site project manager is not approved for the loan, it could have profound effects on the schedule for completing the site reservoir project.
“Most likely it would delay the project 18 to 24 months,” Brown said. “The WIFIA process to get to this point is like a pre-qualification, which means that loan approval is more a function of ‘when’ and not ‘if’. That being said, if the WIFIA loan does does not materialize, the local cost share will have to be financed through the municipal bond market at higher interest rates, increasing project costs for local agencies and compromising affordability.
Brown also outlined some of the upcoming details that have yet to be worked out for the Sites Reservoir project.
“The next key steps will be to submit our water right applications next month and receive water right approval by the end of 2023, complete the environmental review process by the end of year and receive the final biological advisory and associated permits at approximately the same time. until we get the water rights,” Brown said.
Several regional lawmakers released statements supporting the loan and the project on Thursday.
“We need Sites now more than ever; our state is facing another historic drought. I have been a strong supporter of this project for years, it will provide water to over 24 million Californians and 500,000 acres of farmland,” said U.S. Congressman Doug LaMalfa, R-Calif., In a press release. “This loan will significantly reduce costs for consumers and make it more affordable for taxpayers to access the water they need, even in dry years. I’m glad the EPA is moving forward with allowing the project manager to apply. I look forward to seeing them create a stronger, more reliable water supply for our state.
LaMalfa said he and Congressman John Garamendi, D-California, led a bipartisan letter with other members of a California delegation asking the EPA to allow the sites project authority to request a WIFI ready.
“The Off-River Site Reservoir will bring California one step closer to achieving a drought-resistant water supply system, by storing floodwater from the Sacramento River during wet years for use during wet years. by farmers, our communities and the environment,” Garamendi said in a statement. . “With this additional $2.2 billion in federal funding, we have now secured the public funding needed to begin construction of Sites Reservoir. I am now calling on Governor (Gavin) Newsom to direct state agencies to finally complete the permitting process for the site reservoir project. After years of planning, it is time to complete the state permitting process and complete construction of the first major new reservoir in California since 1999.”