Shasta Dam (AP Photo/San Francisco Examiner, Kim Komenich) ( KIM KOMENICH )

Less than three months after California voters approved a water bond that contains $2.7 billion for new water storage, one of the leading projects under consideration has suffered a potentially fatal setback.

Biologists at the main federal agency that oversees the Endangered Species Act have concluded they cannot endorse a $1.1 billion plan to raise the height of the dam at California’s largest reservoir, Shasta Lake, because of its impact on endangered salmon.

In a 349-page draft report completed in late November, the U.S. Fish and Wildlife Service concluded that it is “unable to support” any of the project’s five options being considered.

The study has been shared with other federal agencies but not made public — and only came to light after environmentalists filed a Freedom of Information Act request.

“This is a huge setback. It shows they need to go back to the drawing board,” said Tom Stokely, a spokesman for the California Water Impact Network, a nonprofit group based in Santa Barbara that obtained the documents.

Supporters of raising the dam said they are concerned about the report.

“People are going to be frustrated,” said Mike Wade, executive director of the California Farm Water Coalition. “The voters made their point. They want to see investment in water storage projects along with conservation and ecosystem investment. By 2-1, people voted in favor of all of it.”

Located 10 miles north of Redding, the Shasta Dam is a linchpin of California’s water supply. Built by the Roosevelt administration from 1935 to 1945, it holds back a vast reservoir that when full contains enough water for the yearly needs of 20 million Californians.

Much of the water from Shasta is used to irrigate Central Valley farms, but some also goes to Bay Area cities via the Santa Clara Valley Water District and the East Bay Municipal Utility District.

Although Shasta Lake is only 42 percent full now because of the state’s severe drought, farmers, some city leaders and government engineers have for more than 20 years embraced the idea of raising the dam to store more water in wet years.

The most recent plan by the U.S. Bureau of Reclamation, which owns the 521-foot-high dam, would increase its height by 18.5 feet and require the relocation of roads, bridges, utilities and railroad lines. Bureau officials have justified the project’s $1.1 billion cost by saying that it would allow the lake to store 14 percent more water — for an increased average annual yield of up to 113,000 acre feet, enough water for about 550,000 people a year. It also would help boost the number of endangered Chinook salmon on the Sacramento River, bureau officials say, by allowing for the regular release of more cold water behind the dam into the river, particularly during dry years.

Under that justification, they have proposed that federal taxpayers pay 61 percent of the cost of the project while California farms and cities that use the extra water and hydro-electric power would pay the other 39 percent.

But in their evaluation, biologists at the U.S. Fish and Wildlife Service’s Bay-Delta office in Sacramento concluded that raising Shasta Dam would flood the habitat of several rare species and that any benefits would be offset by the degradation of salmon habitat downstream in the Sacramento-San Joaquin River Delta. That had not been considered in the Shasta Dam studies so far.

Further, the biologists said, looking at historic rainfall patterns, “in about 90 percent of the years, there would be no benefit” to salmon.

Obtaining the support of the U.S. Fish and Wildlife Service is key. Unless the project receives permits under the Endangered Species Act from the service, it cannot be built. In addition, environmental groups who oppose the project, claiming nearly all of its benefits would go to large farm operations in the Central Valley while taxpayers would pay the majority of the costs, could use the report as a basis for a lawsuit to block the dam expansion.

“This isn’t just an environmental and fisheries issue. It’s about the squandering of taxpayer dollars,” said Bill Jennings of the California Sportfishing Protection Alliance, an opponent of the project. “It’s about pork-barrel politics, about public money flowing from the public coffers to the handful of corporate farmers in the San Joaquin Valley.”

Opponents say more water can be obtained at a cheaper cost through water recycling, conservation, underground storage and storm water capture.

Raising Shasta Dam is one of three major new storage projects that could be funded with money from the November water bond. The others are Sites Reservoir in Colusa County and Temperance Flat, near Sequoia-Kings Canyon National Park.

Bureau of Reclamation officials said Tuesday they will take the biologists’ concerns on the Shasta project under consideration. The bureau released a draft environmental impact statement in 2013 and is still finishing the final document, which is needed before Congress can consider whether to fund the project.

“It’s too early at this stage to say how these particular comments might impact the final report,” said Louis Moore, a spokesman for the bureau.

Meanwhile, officials at the Fish and Wildlife Service indicated they may be altering some language in the report.

“It is a draft so it is subject to change,” said Steve Martarano, a spokesman for the service.

A federal government source familiar with the report said that Bureau of Reclamation officials were unhappy with it and have pressured the service to rewrite it.

Environmentalists say they are worried that top leaders in the Fish and Wildlife Service, particularly its regional director, Ren Lohoefener, who was appointed during the administration of former President George W. Bush, will overrule the biologists for political reasons.

They cited the case of Julie MacDonald, a former deputy assistant interior secretary who resigned in 2007 after an investigation found she had reversed several decisions by the agency’s biologists to weaken protections for endangered species in California. The investigation also found that she had given internal documents to the oil industry and property rights groups.

When asked about those concerns, Martarano said: “It’s going through the typical process of a draft.”

Paul Rogers covers resources and environmental issues. Contact him at 408-920-5045. Follow him at Twitter.com/PaulRogersSJMN.

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