The U.S. Department of the Interior on March 17 announced $889 million in investments for water infrastructure projects across six Western states. The funding focuses on canal rehabilitation, subsidence repair and system upgrades aimed at restoring lost conveyance capacity—and provides a short-term pipeline of major civil work connected to existing U.S. Bureau of Reclamation systems.
The funding comes from the large spending and tax bill signed by President Trump in July 2025. It provides $1 billion through 2034 to restore and expand capacity in existing federal water systems while accelerating permitting for major projects. The allocation is substantial by project standards, but against the broader national picture, it is a fraction of what engineers say is needed.
California accounts for $540 million of the Reclamation funding, more than 60% of the total, reflecting the depth of rehabilitation needed across Central Valley conveyance systems, where subsidence and structural wear have reduced flow capacity for decades.
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Delta-Mendota Canal | EA Final
The largest allocation, $235 million, will fund rehabilitation of the 116-mile Delta-Mendota Canal, a Central Valley Project facility conveying water from the Sacramento-San Joaquin Delta near Tracy, Calif., south to the Mendota Pool.
Originally designed with a maximum capacity of 4,600 cu ft per second, the canal is operated by the San Luis & Delta-Mendota Water Authority under a transfer agreement with Reclamation. Funded work includes embankment raising, check structure repairs and potential construction of a new concrete-lined segment.
Another $200 million targets subsidence correction along the 152-mile Friant-Kern Canal, which serves approximately 1 million acres of San Joaquin Valley farmland.
Groundwater pumping has reduced the canal’s capacity from its original 4,000 cfs to approximately 1,600 cfs—a 60% decline—cutting deliveries by as much as 300,000 acre-ft in affected years, according to Reclamation. A Phase 1 correction of the most heavily affected 33-mile middle reach, including realignment of approximately 23 miles of canal in Tulare and Kern counties, was completed in spring 2024. Negotiations on the upper and lower reaches are ongoing.
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The Friant Water Authority said the funding will advance that remaining work. “The Friant-Kern Canal is a lifeline for farms, communities and groundwater recharge efforts,” said CEO Johnny Amaral, adding the investment “will have a lasting impact on the communities we serve.”
The remaining California funding includes $50 million for subsidence repairs along the San Luis Canal, $15 million to upgrade a Tehama-Colusa Canal Authority pumping plant serving roughly 150,000 acres of Sacramento Valley farmland and $40 million for planning and preconstruction tied to a proposed 18.5-ft raise of Shasta Dam.
That project, currently in preconstruction and design, would add approximately 634,000 acre-ft of storage—enough to supply about 2.5 million people for a year, according to Interior.
Beyond California
The funding also includes $100 million will support the Eastern North Dakota Alternate Water Supply Project, a phased system designed to deliver up to 165 cfs of treated Missouri River water through an intake, pump station, biota treatment plant and buried transmission pipeline to municipal and rural users across eastern North Dakota, per a Reclamation Record of Decision issued in January 2021.
Utah’s $100 million will replace the Strawberry Highline Canal—an open conveyance that has delivered irrigation water to approximately 42,500 acres in southern Utah County since 1913—with an enclosed pipeline to reduce seepage losses and improve delivery efficiency.
Wyoming’s $100 million goes to the Fort Laramie Canal tunnels, where a July 2019 ceiling collapse in Tunnel No. 2 left the system running below its approximately 1,500-cfs design capacity, operating on emergency repairs. A May 2025 Reclamation-approved demolition and reconstruction of approximately 6,642 ft of tunneling along the 85.3-mile canal, operated by the Goshen and Gering Ft. Laramie irrigation districts.
The project-level investment comes against a deteriorating national backdrop.
Read More America’s Water Infrastructure Crisis EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress, 2023 ASCE, 2025 Report Card for America’s Infrastructure, March 2025 ASCE/Value of Water Campaign, Bridging the Gap, 2024
EPA’s 7th Drinking Water Infrastructure Needs Survey and Assessment, published in 2023, put the 20-year national investment requirement for drinking water systems alone at $625 billion—a 32% increase over the agency’s prior estimate. The American Society of Civil Engineers’ 2025 Infrastructure Report Card rated the nation’s drinking water infrastructure a C- and wastewater infrastructure a D+, both unchanged since 2021, and projects that the drinking water investment gap will grow from $309 billion today to $620 billion by 2043.
That trajectory is now further complicated by the expiration of the Infrastructure Investment and Jobs Act in 2026, which ASCE estimates has been saving $700 per year per U.S. taxpayer, and whose lapse would accelerate the funding shortfall.
The remaining allocations—$30 million for Idaho conveyance improvements, $11 million for South Dakota siphon repairs and $8 million for North Dakota’s Garrison Diversion Unit—round out a package Interior Secretary Doug Burgum said will “strengthen our nation’s water security, modernize aging infrastructure and support the farmers, communities and industries that depend on reliable water supplies.”
For the construction industry, the announcement signals near-term workload for canal relining, embankment stabilization, pump station upgrades, pipeline conversion and tunnel reconstruction tied to existing Reclamation systems.
Procurement packages and contractor selections have not been announced; Interior said project delivery will advance in coordination with state and local partners.
