By Christopher Mouawad

This blog provides a glimpse into the complexity of permitting for large water projects like Sites. California water law is as intricate and varied as the systems it governs. What begins as a seemingly simple doctrine, such as “first in time, first in right,” can quickly spiral into a labyrinth of layered principles, regulatory frameworks, and practical tradeoffs. Add to that complicated state and federal environmental laws and permitting processes, and legal frameworks make the decision to move forward with any project a very involved process. 

The proposed Sites Reservoir Project provides a good opportunity to understand some of the processes and approvals required for a major water infrastructure project. Sites is California’s most ambitious surface water storage project in a generation. The proposed reservoir and its diversion infrastructure would span four counties, stretching through Tehama, Glenn, Colusa, and Yolo. See Figures 1 and 2. At its core, Sites is an “off-stream” reservoir that aims to capture “excess” water from the Sacramento River during higher-flow periods for use during dry periods. The goal is to increase our state’s existing 50 million-acre-feet surface water storage capacity by 1.5 million-acre-feet. That amount is roughly the size of Lake Berryessa, a reservoir located a 30 minute drive west of UC Davis.

Sites must navigate a different legal landscape than previous reservoir projects, many of which were approved and built before modern environmental laws took effect. The National Environmental Protection Act (NEPA) and California Environmental Quality Act (CEQA) impose information disclosure requirements and mitigation analyses on Sites. Although NEPA is procedural, requiring only a hard look before a federal agency makes a decision, CEQA actually requires mitigation of foreseeable environmental impacts. 

Separately, Sites must seek a permit (a water right permit, leading to a license) to divert water from the Sacramento River, which is granted at the discretion of the State Water Resources Control Board (SWRCB), and another separate permit to discharge back into the river from the US Army Corps of Engineers (USACE). The federal Endangered Species Act (ESA) imposes additional construction and operational limitations for the protection of certain species impacted by construction and operation of Sites, and the California Endangered Species Act protects another suite of species. There are also a host of other permits required for construction itself, from Clean Water Act permits to Clean Air Act permits from both the state and federal government. 

Beyond the statutory and regulatory requirements, Sites would also enter a complicated water rights landscape. A big piece of the permitting puzzle is the relationship of Sites to existing water rights to Sacramento River water, and existing legal agreements, such as the Coordinated Operations Agreement, which govern the operation of the State Water Project and Central Valley Project. As Sites navigates the challenging and lengthy process to secure its permits, these federal laws, state laws, local agreements, and private rights dictate the language of each permit – and ultimately what “excess” water might be available to fill the new reservoir.

Previously, Sites partnered with the Bureau of Reclamation to develop a Final Environmental Impact Report / Environmental Impact Statement (Final EIR/EIS) to satisfy legal requirements under NEPA and CEQA. While expedited litigation ultimately found the Final EIR/EIS satisfactory for purposes of NEPA and CEQA, the document did not provide all of the information required for approval of two Clean Water Act permits – a 401 water quality certification and a 404 discharge permit. USACE administratively withdrew, and SWRCB denied without prejudice, the 401 water quality certification application. Sites had until March 1, 2025, to provide supplemental information for the 404 discharge permit. However, Sites decided to resubmit both permit applications in “mid-2025.” 

Separate from the discharge permit requirements, Sites submitted a water right application to SWRCB, seeking permission to divert water from the Sacramento River. Similar to its discharge permit application, Sites submitted the Final EIR/EIS to SWRCB as the basis for approval of its water right. SWRCB found the Final EIR/EIS alone to be inadequate for purposes of a water right application and requested information to supplement the Final EIR/EIS. In addition, several protestants filed objections to the application. As a result, SWRCB’s Administrative Hearing Office began a series of hearings in April 2024 to review the application.

Currently, SWRCB is in the final stages of reviewing the water right application and drafting the permit for Sites; this permit will ultimately govern when Sites can divert water from the river for the reservoir. Because the “conditions” of diversion first identified in the Final EIR/EIS are not binding on Sites’ operation, the “terms” of the water right will be what will fit the proposed diversions within the existing laws and frameworks.

In sum, Sites has complied with its NEPA/CEQA requirements, is currently seeking its water right permits, and plans to resubmit its Clean Water Act permit applications later this year. 

There are many outstanding questions for Sites regarding the water right, such as completion of a facilities use agreement with owners of existing infrastructure, management of Article 21 / Section 215 flows, and incorporation of minimum flows into the water right. The next section discusses minimum flows to demonstrate the complexity of permitting for Sites.

A Reservoir That Promises Restraint

In its Final EIR/EIS, Sites makes several commitments to limit the diversions required to fill the reservoir, including specific minimum flow and bypass conditions to keep water in the Sacramento River. These are specific flow thresholds that Sites committed to maintain at key points in the Sacramento River near Red Bluff and Hamilton City. See Figure 3. 

But an EIR/EIS is not exactly a regulatory document that establishes legal limits on how diversions occur; rather, it is the terms of the water right that will actually govern how diversions occur.

This dynamic between the separate processes spurs the question: how should the conditions of diversion identified in the Final EIR/EIS be incorporated into the terms of the water right permit? 

Why Precision in Permitting Matters

Sites did not include the same numeric flow thresholds in its formal water right application as it did in its Final EIR/EIS. Rather, the terms in the water right application simply state that diversions must comply with the California Endangered Species Act (CESA) and any related Incidental Take Permits (ITPs). See Figure 4. The interaction of the water right permit and other regulatory frameworks like CESA are complicated, and this can make it difficult for observers to understand how a project will actually operate.

Sites did obtain an ITP from the California Department of Fish and Wildlife in 2024, and that ITP does include some minimum flows, but it does not contain all of the flows listed in the Final EIR/EIS – for example, the pulse protection standard at Bend Bridge discussed in the Final EIR/EIS is not included. More significantly, because the proposed water right does not itself contain the terms, but instead relies on the ITP, the key flow commitments are enforceable only by reference to the ITP, a document that is much easier to amend than a water right. A change to a water right triggers a public protest process and formal SWRCB review. An ITP, by contrast, can be modified without significant public process, especially under the “minor amendment” process governed by the California Code of Regulations.

Further, the purpose of minimum flows in an ITP varies greatly from the purpose of minimum flows in a water right. Minimum flows in ITPs under CESA primarily focus on species protection, whereas SWRCB has the legal authority to establish minimum flows in a water right to address broader public trust concerns, including downstream rights, ecosystem health, and water quality. 

As a result, only referring to minimum flows through an ITP rather than directly in the water right itself leads to operational differences regarding the purpose of minimum flows and poses challenges for transparency and accountability for the water right.

Weighing Precision and Practicality

SWRCB could consider two possible pathways regarding minimum flows to more closely align the terms of diversion in the permit with the conditions of diversions in the Final EIR/EIS:

• Amend the terms of the water right application to incorporate specific minimum flow thresholds identified in the Final EIR/EIS directly, not just by reference to the ITP. This can be done through Standard Permit Terms 60 or 204, which allow explicit flow conditions to be embedded in a permit. The ITP process could remain in place to allow for increased minimum flows, if required for species protection, but the right itself would continue to serve as a minimum flow floor.

• Alternatively, limit ITP modification flexibility by requiring that the permit is granted on the condition that future changes to ITPs related to the water right cannot undergo expedited processes, such as through a “minor amendment” change. This is a compromise which allows the Authority to retain flexibility by not including minimum flows within the water right while allowing an amendment to undergo public review.

To be clear, being precise would make the operation of Sites more rigid. Adaptive management, discretionary agency authority, and operational flexibility should be important features of Sites that are practically valuable. Moreover, changes in water management in the Central Valley is changing the landscape, and flexibility may be helpful in adjusting project operations. For example, ITP modification would allow for easier upward adjustments in the minimum flows, if required to protect listed species. Removing potentially lengthy public review for this purpose could be advantageous for the species and the ecosystem in practice. However, the lack of precision leaves open the possibility of amendments for lower minimum flows without robust public review. While perhaps appropriate for the purposes of CESA, such a process may not be adequate for governing a water right.

Weighing this balancing act is an example of the complicated water governance struggles at the heart of many water management decisions in California. 

About the Author

Christopher Mouawad is a recent graduate from the UC Davis School of Law. He is passionate about California water law and management. In his free time, you can find him enjoying the snowpack in Tahoe or admiring elephant seals and elk in Point Reyes National Seashore. He received the 2025 Doremus / Anthon Environmental Law Writing Prize for his paper, Exclusively Excess: A Critical Commitment, that takes a close look at the Sites Reservoir Project’s diversions. The paper reviews the “conditions” of diversion included in the Project’s Final EIR/EIS and the “terms” of the Project’s water right application (Application 25517X01), and then compares the conditions and terms to determine if legal discrepancies exist between the two. The paper concludes with suggested amendments so that the eventual permit terms can more closely align with the original conditions that underwent the environmental review. Additional information and citations are available in the paper. Feedback on the paper is welcome at mouawad.christopher@gmail.com.