The panel agreed with a trial judge that Water Resources hadn’t met its burden to show the controversial project qualifies as a modification of the existing infrastructure for which the department has authority to issue bonds.
By Edvard Pettersson, Courthouse News Service
The California Court of Appeals on Wednesday affirmed a judge’s ruling that the state’s Department of Water Resources can’t issue bonds to fund the controversial Delta Conveyance Project — a proposed 14-mile tunnel that would divert water from the Sacramento River to Central and Southern California.
The three-judge appellate panel agreed the Delta Program doesn’t qualify as a “further modification” to the existing Feather River Project — a large configuration of dams, reservoirs and power stations in Northern California that dates back to the 1950s — for which Water Resources was given authority to issue revenue bonds.
“The problem here is that the contours of the Delta Program are so ill-defined that it is impossible to ascertain whether any future Delta Program facilities will serve the objectives, purposes, and effects of the Feather River Project, or instead constitute a new and different ‘unit’ of the State Water Project,” Associate Justice Peter Krause said in the unanimous decision. “Thus, we will affirm the trial court’s conclusion that the definition of the Delta Program is too vague and uncertain to support validation.”
Representatives of the Department of Water Resources didn’t immediately respond to a request for comment.
Sacramento County Superior Court Judge Kenneth C. Mennemeier, in January of last year, denied the department’s request to validate its authority to issue bonds to fund the project, which would put a massive tunnel to convey water under the Sacramento-San Joaquin River Delta. Mennemeier found the California Department of Water Resources’ definition of the Delta Program wasn’t linked to the Feather River Project.
The bonds would have raised $16 billion or more to plan and build the Delta Project, which officials in 2022 estimated would take 12 to 15 years to build. Opponents of the projects argue that it would divert billions of gallons of water each year from the Sacramento River, hurting the ecosystem and farming communities.
State officials have said they expect to lose 10% of their water supply by 2040 due to climate change. The Delta Project is a critical aspect of California Governor Gavin Newsom’s water supply strategy.
The strategy involves capturing more water during the wet season, helping stave off future climate-caused losses. It would move more water and help during earthquakes, which could cut community water connections.
Officials have said the Delta Project would include a 36-foot-wide tunnel extending about 45 miles. Two facilities south of Sacramento would pump 3,000 cubic feet of water a second from the Sacramento River into the tunnel, drawing 500,000 acre-feet of water a year — enough for 5.2 million people.
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LEGAL ALERT: Court of Appeal Affirms Trial Court’s Rejection of Financing Scheme for Delta Conveyance Project
From Somach Simmons & Dunn:
“On December 31, 2025, the Third District Court of Appeal issued an opinion rejecting the Department of Water Resources’ (DWR) attempt to validate its authority to issue revenue bonds for the planning, acquisition, and construction of the “Delta Program.” DWR must now find alternative means to fund its proposed Delta Conveyance Project, estimated to cost anywhere from $20 to $100 billion.
In 2020, DWR adopted three bond resolutions (Bond Resolutions) purporting to authorize revenue bond financing for the “Delta Program,” defined in the Bond Resolutions as “facilities for the conveyance of water in, about and through the Sacramento-San Joaquin Delta, subject to such further specification thereof as [DWR] in its discretion may adopt.” DWR concurrently filed a validation action (Validation Action) seeking a judicial determination that DWR’s Bond Resolutions intending to authorize the issuance of bonds are valid, legal, and binding. A geographically and ideologically diverse group of parties, including Delta public agencies, State Water Project contractors north and south of the Delta, environmental and non-governmental organizations, filed answers opposing the Validation Action. These opponents challenged the legality of DWR’s adoption of the Bond Resolutions and, in part, the scope of DWR’s authority to adopt the Delta Program as a “further modification” of a component of the State Water Project, specifically, the Feather River Project. … ”
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