The Windy Gap Firming Project won key approval Tuesday from the Grand County Commission in a deal applauded by fishing interests but criticized by an environmental group.

The approval marks a major step forward for the Northern Water Conservancy District's proposal to build Chimney Hollow Reservoir west of Carter Lake near Loveland, according to Northern Water.

Chimney Hollow Reservoir will provide storage to improve the reliability of the Windy Gap Project, which diverts Colorado River water from Windy Gap Reservoir. Water is then moved through Colorado-Big Thompson Project facilities for delivery to Northern Colorado.

The proposed Chimney Hollow Reservoir will help the project's participants — 10 cities, two rural water districts and a power provider — to meet their growing water needs. The municipal water providers are expected to serve about 825,000 residents by 2050. A municipal "sub-district" for Northern Water is coordinating the project's permitting on behalf of the 13 groups.

Gary Wockner, director of Fort Collins environmental group Save the Poudre, said the deal "makes strides" toward offsetting the damage done to the Colorado River in Grand County by Northern Water.