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ALBUQUERQUE, N.M. — The New Mexico Interstate Stream Commission on Monday said “yes” to a controversial proposal to divert water from the Gila River for use in southwestern New Mexico farms and cities – but with reservations.

The commission agreed to formally notify the U.S. Department of Interior that it wants to proceed with a project that would divert water from the Gila during times of high flow, building reservoir storage so that it can then be piped for as yet unidentified uses.

The vote allows the state to meet a Dec. 31 federal deadline to take the project’s next steps, a move that could free up $62 million in additional federal funding. But commissioners cautioned that more hurdles remain, chief among them the cost of a potential project and the ability of the state and local communities to pay for it, and that the state is not committed to build the project if it determines it is too costly.

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“New Mexico’s financial options will remain open for years to come,” acting Interstate Stream Commission Director Amy Haas said in a statement issued by the agency following the vote.

“If New Mexico determines down the road that our options are overly costly or no longer feasible, we have the option to change course.”

Opponents, who turned out in force at the hearing, said they believe the state knows enough to kill the project now. Bearing signs saying things like “No billion dollar boondoggle,” they say the cost – at least $575 million, according to a state consultant, and possibly $1 billion, according to an independent federal review – is too high, given the small amount of water the project will yield. They claim the project will cause environmental damage to the wild-flowing Gila with too little benefit.

More than 60 people attended the hearing, held in Albuquerque City Hall.

Project supporters say arid New Mexico cannot afford to pass up the water, an argument that carried the day with the commission, though the supply will be small. At Monday’s meeting, Interstate Stream Commission staff acknowledged that evaporation and reservoir seepage will eat up nearly half the water before it ever reaches any farms or cities.

The law under which the project would be built authorized 14,000 acre-feet per year on average from the Gila, but the actual yield will likely be between 6,000 and 8,000 acre-feet, ISC staff member Ali Effati told the commission. An acre-foot of water is enough for a typical family for two years.

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The opportunity to develop a new water supply is too important to pass up, said state Engineer Scott Verhines, who serves as the commission’s secretary. “Few of New Mexico’s regions have an opportunity to develop new water. This one does,” Verhines said.

Commissioner Blane Sanchez, the lone “no” vote, said he had reservations about the project because too little design work has been done to fully understand the costs. “It hasn’t been fully vetted,” Sanchez said.

Commissioners Jim Dunlap, Phelps Anderson, Randy Crowder, James Wilcox, Mark Sanchez, Buford Harris and Verhines all voted yes. Commissioner Topper Thorpe, who owns irrigation land in the area that might be served by the project, did not vote.

Verhines acknowledged the financial uncertainty, but said to vote “no” now, before the project is fleshed out, would close off the option of future development of the water.

The decision starts a complex set of next steps for the project, which has been a decade in the making. The federal government already has allocated $68 million for southwestern New Mexico water projects, some of which can be spent now on design work for the diversion project. By voting “yes,” the state could get access to an additional $62 million if the diversion project proceeds to construction.

In the meantime, New Mexico can continue studies in the project to flesh out details, including how much it will cost and how much water it will yield. The required federal studies, a necessity for the work to proceed, could take another five years to complete, staff told the commission.

Critics said the money spent in design work and environmental reviews in the coming years will be wasted, because it already is clear that the project makes no economic sense.

“I think they know enough now,” said Allyson Siwik of the Gila Conservation Coalition. The money spent on studies could better be devoted to conservation measures and other steps to help the region cope with water scarcity, she said in an interview following the decision.