The dam was authorized in 1965 as part of the Auburn-Folsom South Unit of the Central Valley Project.[1][3] Construction began in 1979, and the dam was completed in 1982. The project was transferred to the Foresthill Public Utility District for operation and maintenance in 1984.[1] Although Sugar Pine Dam was funded through the Central Valley Project, it was never integrated into the project operationally, as it was intended to work with the never-completed Auburn Dam.[3] The Sugar Pine Pipeline carries water from Sugar Pine Reservoir to the Foresthill area.[1]
In 2003, the Foresthill Public Utility District purchased Sugar Pine Dam, reservoir, and the pipeline from the U.S. Bureau of Reclamation for $3.1 million.[4] As of 2012[update], the district provides water to 1,875 homes and 75 businesses in and around Foresthill.[3]