California’s Santa Clara Valley Water District, known as Valley Water, has awarded a $1.88-billion construction contract for the long-planned Anderson Dam Seismic Retrofit Project, clearing the way for the major infrastructure project to move into its construction phase.
The contract has been awarded to the Flatiron Dragados Sukut ADSRP Joint Venture, which will carry out the $2.8-billion project. After years of planning, engineering studies, regulatory reviews and preliminary construction, work on the dam reconstruction is expected to begin in early 2027 and take approximately seven years.
Located in eastern Santa Clara County, Anderson Reservoir has been at the centre of seismic safety concerns for years. Built in 1950, it is the largest of Valley Water’s 10 reservoirs. The agency says the reservoir is so large that its other nine reservoirs could all fit inside it.
Concerns over the dam’s ability to withstand a major earthquake led to restrictions on reservoir storage levels, leaving the facility operating at only a fraction of its capacity while engineers and regulators worked on a long-term solution.
With key regulatory approvals now secured and supporting infrastructure nearing completion, construction crews are preparing for a comprehensive reconstruction of the dam.
“Rebuilding Anderson Dam is our top priority,” Valley Water board chair Tony Estremera said in a statement. He said the contract award reflects years of work and cooperation involving Valley Water staff, contractors, regulators and community partners.
The project, he added, represents the next phase of one of Santa Clara County’s most important water infrastructure investments and is expected to benefit the community for generations.
Federal approvals clear the way
The project received a major boost earlier in 2026 when federal regulators approved the seismic retrofit.
In spring 2026, the Federal Energy Regulatory Commission approved the retrofit and authorized the decommissioning of the hydroelectric generating facility formerly located at the site. The facility had operated for roughly three decades but has been inactive since 2018.
A second important regulatory milestone came in June, when the U.S. Army Corps of Engineers issued a critical water resources permit. Together, the federal approvals kept the project on schedule and allowed Valley Water to move toward full construction.
The approved design calls for major sections of the existing dam and spillway to be rebuilt to meet modern seismic and safety standards.
The work will include reconstructing portions of the dam embankment and spillway, installing new outlet pipes and implementing a series of safety improvements aimed at reducing earthquake risks and improving the facility’s long-term operation.
Environmental measures will also be incorporated into the reconstruction.
Once completed, the upgraded Anderson Dam will be capable of returning Anderson Reservoir to normal operating levels.
Wider benefits for water supply and flood protection
The project is not solely focused on dam safety. Valley Water expects the rebuilt facility to strengthen regional water supply reliability, support groundwater recharge, improve flood protection and restore recreational opportunities around the reservoir and along the nearby Coyote Creek corridor.
The improvements are expected to be particularly important for the roughly two million people served by Valley Water’s integrated water management system. The agency says the project will help secure future water supplies while providing greater protection for downstream communities.
Before the main dam reconstruction can begin, several supporting projects required by regulators must be completed. These projects are designed to safely manage water flows while construction is underway.
Most of the preparatory work has already been completed.
New tunnel prepares reservoir for construction
A key component is the Anderson Dam Tunnel Project, which is now in its final stages and is expected to be completed later in 2026.
The project is replacing the dam’s existing four-foot-diameter outlet pipe with a significantly larger 13-foot-diameter outlet.
The upgraded tunnel is considered essential to the wider seismic retrofit because it will allow Valley Water to release larger volumes of water into Coyote Creek while the reservoir remains empty during construction. It will also provide greater flexibility for managing reservoir levels during future storms and emergency situations.
Valley Water expects the new tunnel to be operational before the coming winter season, allowing it to be used if significant rainfall occurs.
The tunnel is one of five supporting projects launched by Valley Water to prepare for the seismic retrofit. According to the agency, all five projects remain on track for completion before construction of the rebuilt dam begins.
Together, the supporting projects will allow Valley Water to maintain an empty reservoir safely throughout the reconstruction while limiting impacts on surrounding waterways and communities.
Major investment in regional infrastructure
The Anderson Dam project represents a substantial financial commitment. Since 2023, Valley Water has secured more than $114 million in state and federal grants for critical water infrastructure projects.
Beyond its 10 dams and surface water reservoirs, Valley Water operates three water treatment plants, an advanced recycled water purification centre and a water quality laboratory. Its infrastructure network also includes nearly 280 acres of groundwater recharge ponds and approximately 350 miles of waterways.
The award of the $1.88-billion construction contract now marks a major step forward for Anderson Dam, bringing one of California’s most significant water infrastructure projects closer to the start of its long-awaited reconstruction.
