North Dakota Water Infrastructure Projects to See $300 Million in Savings
North Dakota taxpayers are poised to benefit from over $300 million in savings on two critical Red River Valley water infrastructure projects thanks to a recently passed federal bill, according to U.S. Senator John Hoeven.
The savings stem from a strategic shift of federal funds within the Fargo-Moorhead Area Diversion project and authorization to utilize existing 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 stated during a press conference on Tuesday, Jan. 20, 2026. “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 funding shift and infrastructure authorization on Thursday, Jan. 15, a move expected to save the Eastern North Dakota Alternate Water Supply project $200 million. Fargo Mayor Tim Mahoney, who leads boards for both projects, expressed optimism that the funding and authorization would stabilize the financial outlook for both initiatives. “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,” Mahoney said.
The Eastern North Dakota Alternate Water Supply, a western extension of the broader Red River Valley Water Supply project, aims to deliver water to central and eastern North Dakota. Currently, the state and local entities are funding the eastern portion of the pipeline. The federal authorization allows the project to leverage the existing McClusky Canal, connected to the Missouri River Basin, eliminating the need to construct 40 miles of new pipeline. This strategic decision is projected to save an estimated $200 million, Hoeven explained.
Furthermore, utilizing the existing infrastructure is anticipated to reduce annual operating costs by approximately $4 million, as the shorter canal will utilize gravity to move water, according to Hoeven.
The Senate bill also includes a $50 million appropriation specifically for the construction of the Eastern North Dakota Alternate Water Supply project. Duane DeKrey, general manager of the Garrison Diversion Conservancy District, highlighted Hoeven’s pivotal role in initiating the water supply project, both during his tenure as 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 has already contributed $400 million to the state portion of the water supply project, with additional funding coming from local cities like Grand Forks and Fargo, noted North Dakota Department of Water Resources Director Reice Haase.
The funding adjustment for the Fargo-Moorhead Area Diversion project will enable the Metro Flood Diversion Authority to access between $100 million and $120 million in previously approved federal funds. The $3.2 billion flood control project is a collaborative effort between the federal U.S. Army Corps of Engineers and the Metro Flood Diversion Authority’s private developer. The Army Corps’ portion, initially funded with $750 million in federal funds, is expected to be completed ahead of schedule and under budget.
Leftover funds from the federal portion were originally slated to be available for local project components in the 2030s, but the new bill allows between $100 million and $120 million to be directed toward local portions of the project as early as this year. The diversion project is also supported 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, emphasized the importance of this funding shift, stating, “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.” The diversion project is currently in its final year of construction, operating with a $1 trillion budget for 2026.
These financial adjustments represent a significant step forward in delivering vital water infrastructure improvements to North Dakota communities.
