Los Banos, CA (January 27, 2026) — Plans to expand San Luis Reservoir near Los Banos continue to move forward as federal and state agencies evaluate long-term water supply needs and infrastructure requirements. According to the U.S. Bureau of Reclamation, the proposal would raise B.F. Sisk Dam by approximately 10 feet, increasing reservoir storage by about 130,000 acre-feet. Federal project documents state that the additional capacity would improve water supply reliability for existing south-of-Delta water contractors and wildlife refuges.
San Luis Reservoir, located along State Route 152 between Los Banos and Gilroy, is jointly owned and operated by the Bureau of Reclamation and the California Department of Water Resources. Reclamation records describe the reservoir expansion as a connected action to seismic safety upgrades already underway at B.F. Sisk Dam, which are intended to reduce earthquake risk and protect downstream communities.
Environmental review for the expansion project is ongoing. According to publicly available filings, the Bureau of Reclamation is conducting review under the National Environmental Policy Act (NEPA), and the project cannot advance to construction until required approvals, permits, and funding agreements are finalized.
Project cost has been a central issue in recent planning discussions. Correspondence submitted to the California Transportation Commission (CTC) indicates that required improvements to a one-mile stretch of State Route 152 adjacent to the reservoir are a major cost driver. Those documents show that Caltrans identified additional seismic and safety requirements for the highway, which agency records indicate could add hundreds of millions of dollars to the overall project cost, raising it to roughly $1.05 billion to $1.1 billion in publicly available estimates.
Some recent reporting has suggested the project’s price tag could be lower than previously projected. The Mercury News reported that project representatives described a potential reduction in the estimated cost, from about $1.06 billion to approximately $847 million, attributing the change to a less expensive approach to how State Route 152 could be raised or rebuilt.
State lawmakers have also proposed funding measures aimed at addressing the highway component of the project. Assembly Bill 707 would allocate more than $455 million from the state’s General Fund toward improvements to State Route 152 associated with the reservoir expansion. According to legislative analyses, shifting more of the highway cost to transportation funding could reduce the financial burden on water agencies and ratepayers, even if the project’s overall construction cost remains largely unchanged.
Environmental review, funding coordination, and agency approvals remain ongoing. Federal records indicate that the reservoir expansion project will not proceed until all required reviews are completed and cost responsibilities are resolved among participating agencies.
This article is based on public records from the U.S. Bureau of Reclamation, the California Department of Transportation, the California Transportation Commission, and the San Luis & Delta-Mendota Water Authority, with secondary reporting by the Mercury News and Maven’s Notebook clearly identified where referenced.
