Sen. John Hoeven details $300M cost savings for diversion, water supply projects

Ingrid Harbo And Michael Mcgurran, Grand Forks Herald

Wed, January 21, 2026 at 1:36 AM UTC

4 min read

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Jan. 20—FARGO — Savings for North Dakota taxpayers on two Red River Valley water infrastructure projects in a recently passed federal bill will top $300 million, according to U.S. Sen. John Hoeven.

During a press conference Tuesday, Jan. 20, Hoeven touted the savings, which result in the shifting of federal funds in the

Fargo-Moorhead Area Diversion

project and the authorization to use established infrastructure for the Eastern North Dakota Alternate Water Supply project.

"We're going to have $300 million in construction cost savings — flat out, up front, we save," Hoeven said. "And because of the way we've done it, it actually doesn't cost the federal government more because of the innovative, creative way that we're doing stuff."

The

U.S. Senate approved

the $100 million-plus diversion funding shift and infrastructure authorization, expected to save the Eastern North Dakota Alternate Water Supply project $200 million, in a bill on Thursday, Jan. 15.

Fargo Mayor Tim Mahoney, who leads boards for both projects, said he hoped the funding and authorization will help straighten out financial pictures for the pair of projects.

"I can't say enough that this really is a double boost in the arm that really kind of gives us a boost to help us get over the top," he said.

The Eastern North Dakota Alternate Water Supply is the westernmost portion of the

Red River Valley Water Supply

project, which will supply water to central and eastern North Dakota. The state of North Dakota and local entities are paying for the eastern portion of the pipeline.

The federal authorization allows the project to use the existing McClusky Canal, a canal connected to the Missouri River Basin, rather than building 40 miles of new pipeline. The ability to use the existing infrastructure rather than building a new section of pipeline will save the project an estimated $200 million, Hoeven said.

The existing infrastructure will also save an estimated $4 million per year in operating costs by providing a shorter canal that uses gravity to move the water, Hoeven said.

The Senate bill also included a $50 million appropriation for the construction of the Eastern North Dakota Alternate Water Supply project.

Duane DeKrey, general manager of the Garrison Diversion Conservancy District, said Hoeven was instrumental in getting the water supply project off the ground, both when he was governor and now as a senator.

"Sen. Hoeven's extensive efforts will make the Red River Valley Water Supply significantly more affordable for end users, which will benefit communities throughout North Dakota" DeKrey said.

North Dakota Department of Water Resources Director Reice Haase said the state of North Dakota has contributed $400 million to the state portion of the water supply project. Additionally, local cities that will be served by the project, like Grand Forks and Fargo, have contributed funding, he said.

The funding shift for the Diversion project will allow the Metro Flood Diversion Authority, which oversees the non-federal portions of the flood control project, to access between $100 million and $120 million in federal funds already approved for the project.

Construction of the $3.2 billion flood control project is split between the federal U.S. Army Corps of Engineers and the Metro Flood Diversion Authority's private developer. The Army Corps portion of the project was funded up-front with $750 million in federal funds.

Because of the up-front funding, the Corps is expected to finish its portion of the project ahead of time and below budget, Hoeven said. Leftover funding from the federal project would be transferred cover the local parts of the project, but not until the 2030s.

The bill passed last week allows between $100 million and $120 million of the leftover federal funding to go toward the local portions of the project as soon as this year.

Along with federal funding, the diversion project is paid for by $850 million from the state of North Dakota, $86 million from Minnesota and $1.5 billion from local sales taxes.

Mahoney, who chairs the Metro Flood Diversion Authority board, addressed the funding shift's impact on the project.

"It really helps on our financial model, as sales tax in our community is not as high or vigorous as we thought it might be at this point," Mahoney said.

The diversion is in its final year of construction. The project has a

$1 billion budget

for 2026.

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