March 26, 2014

Xcel: Shoshone hydro plant not for sale

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Shoshone old school
A historic photo of the Shoshone hydro plant, with U.S. 6 instead of I-70 in front of it. The plant, which opened in 1909, carries senior water rights from 1902 for 1,250 cfs. The water right now dominates the flow regime in the Colorado River.

Library of Congress / Historical American Buildings Survey

A historic photo of the Shoshone hydro plant, with U.S. 6 instead of I-70 in front of it. The plant, which opened in 1909, carries senior water rights from 1902 for 1,250 cfs. The water right now dominates the flow regime in the Colorado River.

GLENWOOD SPRINGS — The Shoshone hydropower plant on the Colorado River is not for sale, according to Fred Eggleston, West Slope area manager for Xcel Energy, which owns the plant.

“Shoshone is not for sale,” Eggleston told the Colorado River Basin Roundtable, which met Monday in Glenwood Springs, nine miles downstream from the Shoshone plant. “Don’t plan to sell it. Nothing in the future about selling it.”

That may be good news to those on the West Slope who fear a Front Range utility will buy the plant, shut it down, and extinguish the plant’s senior water rights — resulting in less water in the lower Colorado River.

But it also means the plant’s fate is left in the portfolio of Xcel Energy, a regional utility based in Minneapolis that operates 25 other hydro plants, serves 3.4 million electricity customers in eight states, and sees $10.1 billion a year in revenue.

A view, circa 1935, of the Shoshone hydro plant on the Colorado River east of Glenwood Springs. The plant went into operation in 1909.

Library of Congress / Historic American Buildings Survey

A view, circa 1935, of the Shoshone hydro plant on the Colorado River east of Glenwood Springs. The plant went into operation in 1909.

Setting the record straight

Eggleston’s comments to the members of the Colorado roundtable were in response to an article in The Daily Sentinel of Grand Junction on March 17 about the prospect of the plant being bought by West Slope interests.

The Sentinel story quoted Louis Meyer of SGM Engineering, a consultant developing the Colorado roundtable’s “basin implement plan,” that buying the plant would be “one of the seminal things going forward in our plan.”

The article included several references to the plant not being for sale, and stated there was “no indication for now that the Shoshone Generation Station is even for sale.”

But an Xcel spokesman quoted in the story, Mark Stutz, said he couldn’t comment on whether the plant was for sale, or not.

That left the prospect lingering.

And Eggleston told the roundtable meeting he wanted to clarify any “mis-information.”

“Again, Xcel is not interested in selling,” Eggleston said. “They would not consider any first-right-of-refusals, or anything else that’s not within the interests of Xcel at this time.”

Eggleston said the article in the Sentinel caught the attention of Ben Fowke, the company’s chairman, president and CEO.

“It would be a good idea to do that every two or three years so that the executive management is reminded how important Shoshone is, and that Xcel Energy is making a commitment to everybody on the Western Slope to protect those water rights and operate that plant,” Eggleston said.

The amount of water in the Colorado River below Loma depends in part upon the Shoshone hydro plant.

Brent Gardner-Smith / Aspen Journalism

The amount of water in the Colorado River below Loma depends in part upon the Shoshone hydro plant. Smith / Aspen Journalism

Water for the West

The real value of the Shoshone plant to the West Slope is its senior water rights from 1902, which keep up to 1,250 cubic feet per second of water flowing down the Colorado River.

“The whole reason the West Slope, lead by the River District, would be interested in gaining the plant is because we want that water right held intact,” said Jim Pokrandt, a communications and education specialist with the Colorado River District.

And he noted when the River District discusses the purchase of the plant, it is in the context of “if it were for sale, the River District would be interested in making sure that offer was explored.”

Pokrandt said he couldn’t specify an asking price, or a value for the hydro plant, which was built in 1909, other than in the “tens of millions of dollars.”

And, he noted, the River District, or another entity, couldn’t buy it without additional tax revenue.

Xcel spent $12 million to repair the plant after a penstock was blown out in 2007.

The plant has two 7.5 megawatt generators, which Eggleston said together produce an average of 6.5 to 7 megawatts.

He said while the generators have been recently refurbished, the plant’s turbine is over 100 years old and that limits production. The plant opened in 1909.

Eggleston said the Shoshone plant is still important to Xcel as a generation plant, not so much for the revenue, but for its useful role in managing regional power distribution, especially now that the Cameo plant has been dismantled.

This gateway in the Colorado River is just above the Utah state line. For much of the year, how much water is left in the river can depend on Shoshone's senior water right. It also depends on flows from the Gunnison River.

Brent Gardner-Smith / Aspen Journalism

This gateway in the Colorado River is just above the Utah state line. For much of the year, how much water is left in the river can depend on Shoshone's senior water right. It also depends on flows from the Gunnison River.Smith / Aspen Journalism

Does Denver want it?

Denver Water has long chafed at the restrictions imposed by Shoshone’s water rights, but Travis Thompson, media coordinator for the utility, said via email that “Denver Water has not made an offer to purchase the Shoshone plant over the last few decades, and there are no standing offers.”

Denver Water also drove the framing and adoption of the Colorado River Cooperative Agreement (CRCA), signed in 2012 by a list of regional entities.

“Under the CRCA, if Xcel decides to sell the Shoshone assets, they agree to do so in an open bidding arrangement,” Thompson, said.

He added that if the West Slope wanted to buy the plant, Denver Water also agreed it would support the idea and “assist the West Slope in acquiring Shoshone assets.”

But fear of Front Range water interests is still discernable in the Colorado River basin.

On Monday, Chuck Ogilby, a member of the Colorado roundtable, read a passage from the group’s vision statement: “The Shoshone call shall be preserved and protected for the benefit of the West Slope. This is non-negotiable.”

“Obviously, the group feels really, really strongly about that plant,” Ogilby said.

In 2007 Xcel and Denver Water reached an agreement that in future drought conditions, Xcel would run just one of the plant’s turbines and “relax” the plant’s call on the river down to 704 cfs for either a month in the spring, or longer, if conditions warranted.

This “relaxation” has only been invoked only once, early in 2013, after two dry winters, according to Thompson.

The deal allows Denver Water to fill its reservoirs earlier in some years, but it made people on the West Slope nervous.

“For some of us anyway, we felt that we were compromised, that we weren’t able to be at the table,” Ogilby said of the deal between Xcel and Denver Water.

Eggleston responded by asking if it would be a good idea “to bring some of our folks from Denver over here” to talk with the roundtable’s members.

“We can go as high up the food chain as we possibly can based on schedules,” he said about reaching out to Xcel executives.

“That’s a great idea,” Pokrandt said.

“As high up as you can go,” said another person from the back of the room.

Meyer, the consultant for the roundtable, noted after Eggleston spoke that progress may have been just been made.

“That is something that we have already accomplished in this process, to get his superiors to come to one of our upcoming meetings,” Meyer said. “The reason there is misinformation out there is that the Shoshone power plant is shrouded in mystery.”

Editor’s note: Aspen Journalism’s Water Desk and the Aspen Daily News are collaborating on coverage of rivers and water. The Daily News published a version of the story on Wednesday, March 26, 2014.

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