February 7, 2016

The big water game: state sees need for $14B worth of water projects

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A hay field along on the Colorado River above Dotsero. Using water for agriculture remains at the heart of water conversations in Colorado.

Brent Gardner-Smith/Aspen Journalism

A hay field along on the Colorado River above Dotsero. Using water for agriculture remains at the heart of water conversations in Colorado.

DENVER – With the recently released Colorado Water Plan calling for 400,000 acre feet of new water storage facilities, many of the state’s water providers and users are eager to get an estimated $13 to $14 billion worth of projects underway.

But just which projects, built with exactly what money, is not yet clear.

“Welcome to the Super Bowl of water,” said James Eklund, the director of the Colorado Water Conservation Board, which produced the water plan, in a Jan. 27 address to the members of the Colorado Water Congress in Denver. “To this one you all have a ticket. And you all bleed for our team, as we’re all Coloradoans.”

The water plan, put together in two years by the staff of the CWCB with the input of nine river-basin roundtables, does not include a prioritized list of projects, or, one could say, a detailed game plan.

Such a to-do list may emerge relatively soon, however, as the roundtables are now being asked by the CWCB to update their “basin implementation plans” and to identify, screen and recommend locally prioritized projects.

The roundtables have also now been tasked to work on a $1 million update of the 2010 Statewide Water Supply Initiative, or SWSI (“swahzi.”). It’s a more technical document than the Colorado Water Plan, which was weighted toward policy and process.

“Yes, the light at the end of the water plan tunnel turned out to be the oncoming SWSI train,” said Brent Newman, a program manager in the water supply planning division at CWCB.

In addition to sharpening its physical plans, the CWCB and the Interbasin Compact Committee, which includes members from each roundtable, are developing a funding plan.

“We know that the $14 to $16 billion of projects that we need, the state’s not going to pay for all that, water providers will find ways to finance that, but in order to provide a ten percent guarantee loan for those, we need to $1.4 to $1.6 billion between now and 2050,” Jacob Bornstein, a progam manager in CWCB's water supply planning department, told the members of the Water Congress on Jan. 29. (Bornstein has since taken a position at the Spark Policy Institute in Denver).

And the real state funding need, adding in the cost of environmental restoration and public education programs, may be closer to $3 billion.

“So that’s really what we’re talking about,” he told the Water Congress. “It will probably take some type of initiative, or something like that,” Bornstein said, suggesting a statewide ballot initiative.

And so a current option being explored is to put a statewide funding question in front of voters that would raise $100 million a year, or $3 billion, by 2050.

The state then envisions creating a 10-percent guaranteed-loan fund of $1.3 to $1.4 billion to help spark projects ranging from piping irrigation ditches to building large dams.

“In order for us to achieve the goals of the water plan, which are the goals of the population of the state over the next 20 to 50 years, it’s going to take a lot of money,” Russ George, a member of the CWCB board of directors, said during a January meeting. “And there isn’t any other source of money. The federal government is not in the water business in the same way it had been in the last century. So it’s the state that has to take the lead, and lead always means we have to bring some money to the table.”

The Colorado Water Conservation Board, after unveiling the Colorado Water Plan in Denver in November 2015. The board includes eight voting members from river basins in Colorado and one voting member from the city and county of Denver. Russ George, far left, represents the Colorado River basin.

Photo: Colorado River District

The Colorado Water Conservation Board, after unveiling the Colorado Water Plan in Denver in November 2015. The board includes eight voting members from river basins in Colorado and one voting member from the city and county of Denver. Russ George, far left, represents the Colorado River basin.

Project funding drops

The CWCB’s approach of using the basin roundtables to prioritize and promote projects, and help develop state plans, can be cumbersome and time-consuming. The Colorado River basin roundtable, for example, has 50 members with diverse views and meets every other month in Glenwood Springs for four hours.

And some roundtable members around the state were disheartened to find out in January, fresh off a frantic push to finish the Colorado Water Plan by December, that state funding for basin-specific project grants was going to drop sharply due to the downward swing in severance tax revenue.

The last two years the CWCB has received $10 million in revenue from taxes levied on oil and gas extraction, which is shared between a statewide account and nine basin roundtable accounts.

But the recent downturn in the gas patch, combined with a lagged property-tax deduction for gas producers, has state officials facing a 25 to 50 percent drop in funding for water projects over the next two years, at least.

“So while normally in January the Arkansas roundtable would get $120,000 in their basin account, it may be closer to between $60,000 and $100,000,” said Newman, during a presentation in January to the Arkansas roundtable in Pueblo.

Roundtable grants usually cover only a portion of the cost of a water project, but they are a stamp of approval and a recommendation to the CWCB for 
statewide funding.

“You better expect less money,” said Diane Hoppe, the chair of the CWCB board, told the Arkansas roundtable members on Jan. 13.

The day before, she told the South Platte basin roundtable, which meets in Longmont, “Be cautious about what you’re going to spend money on.”

And George, her fellow CWCB board member, re-emphasized that point during the CWCB board meeting on Jan. 25 in Denver, just as the board was in the process of approving a series of roundtable-recommended water project grants.

“We have put in a tremendous effort to create a window into Colorado’s water future, that proposes solutions instead of fighting,” George said, referring to the Colorado Water Plan. “And just as we launch it, we are told ‘Oh, and by the way, never mind, there is nothing to use to pay for anything.”

George, from Rifle, has been the director of both the state’s Department of Natural Resources and Department of Transportation, and he served as speaker of the Colorado House of Representatives.

“In all the years I’ve been in state government, what we heard today (at a finance committee meeting) is the worst it has ever been,” he said. “And so here we are, with our hands absolutely shackled. The ground has shifted under us for awhile, and it will cause us to be a little creative about how we do these things, but everybody’s budget is going to be less.”

The grate in place on Sawyer Creek, a headwaters stream in the upper Fryingpan River basin, that captures water and sends it under the Continental Divide through the Fry-Ark project. There are several streams in the upper Fryingpan basin that could still be diverted via Fry-Ark.

Photo: Brent Gardner-Smith/Aspen Journalism

The grate in place on Sawyer Creek, a headwaters stream in the upper Fryingpan River basin, that captures water and sends it under the Continental Divide through the Fry-Ark project. There are several streams in the upper Fryingpan basin that could still be diverted via Fry-Ark.

Less money, less pressure?

For some stakeholders in the Roaring Fork River watershed, uncertainty about statewide funding resources might be a relief.

Most of the new or expanded reservoirs and new underground storage facilities envisioned east of the Continental Divide will be able to store Western Slope water.

And more Front Range storage capacity is expected to increase the pressure on the Roaring Fork and the Fryingpan rivers, which already have about 40 percent of their headwaters sent east through existing tunnels. And the heavily used Colorado River is under constant stress.

“The acceptance of the final Water Plan should not be the precipitating event in a race to see who can establish the biggest entitlements and take the last drop of available or theoretically available water out of the Colorado watershed leaving the West Slope to be whipsawed between Front Range dependence and Colorado compact obligations,” Pitkin County told the CWCB in a Sept. 17 letter.

And the county’s Health Rivers and Streams Board offered the state a similar sentiment.

“It is unacceptable for the growing population of the Front Range to look to the Colorado basin or our drainage as a resource to be exploited rather than a resource to be preserved,” the rivers board wrote in a Sept. 17 letter.

On the other hand, the state’s water plan does include goals that could benefit Western Slope rivers and streams.

For example, it calls for “stream management plans” to be developed for 80 percent of the state’s rivers. Those plans, to be developed locally, could show how current diversions are affecting rivers and lead to alternative approaches.

The plan calls for a collaborative “multi-purpose” approach to water projects that could bring benefits to water-starved streams and rivers, albeit benefits tied to new water-management infrastructure.

And it sets goals of finding 400,000 acre-feet of municipal water conservation savings by 2050 and developing effective alternatives to the ongoing “buying and drying” of farm land.

From left, Russ George, a CWCB board member, Andrew Gorgey, then Garfield County manager, Peter Fleming, general counsel for the Colorado River District, and James Eklund, director of the CWCB, talking about the potential for new transmountain diversions outside of the Garfield County building in Glenwood Springs in 2015.

Photo courtesy Colorado River District

From left, Russ George, a CWCB board member, Andrew Gorgey, then Garfield County manager, Peter Fleming, general counsel for the Colorado River District, and James Eklund, director of the CWCB, talking about the potential for new transmountain diversions outside of the Garfield County building in Glenwood Springs in 2015.

Is there the will?

An outstanding question facing the Colorado water industry is whether it can develop the “political will” to gain funding for, and approval of, big water projects.

And it was the topic of a high-level panel discussion at the Water Congress meeting called “The Political Will To Get Things Done,” moderated by Jim Lochhead, head of Denver Water.

“I really want to see the state step up,” said Mike Applegate, the president of the board of Northern Water and the CEO of Applegate Group, an engineering firm specializing in water projects.

“I would ask the governor to take this document (the water plan) that he asked us to put together and take it on the road. He needs to talk to all of the federal agencies that get involved in our projects. This is going to be purely political, but hand it to them and say, ‘This is our road map to the future, we really think this is a good idea, we like what’s in here, you guys to need to help us make it happen,’” he said.

Northern has been working for years to gain federal approval for its NISP project, which stands for Northern Integrated Supply Project. It includes two new reservoirs near Fort Collins, Glade and Galeton, which would hold 170,000 and 45,000 acre feet of water, respectively.

Northern also wants to build Chimney Hollow Reservoir, as part of the Windy Gap Firming Project, to add 90,000 acre-feet of storage near Loveland.

Meanwhile, Denver Water is working to enlarge Gross Reservoir, southwest of Boulder, to hold 77,000 more acre-feet of water, as part of the Moffat Collection System.

“A lot of times we’ve been asked by some of the federal agencies, ‘Where does the state stand on these things,’” Applegate said. “And the answer we’ve gotten in the past is that the state can’t take a position yet, because they need to see what the outcome of the federal documents are, the studies. I think we’re past that. I think we really need to get some leadership here to stand up and say, ‘This is a good idea, let’s start doing this.”

That drew a response from Dave Merritt, an engineer who sits on the board of the Colorado River District and is a former Glenwood Springs city councilor.

“From a West Slope perspective, I never thought I’d be in situation where I felt sorry for Denver and Northern,” Merritt said. “But I do. I feel that we are long past the decision process in both Moffat and Windy Gap. The governor needs to make a statement. Are you going to support it? Or are you not going to support at it at this point?

“When you are in a political leadership position, you are not an agency making a determination, you are the governor of the state of Colorado,” Merritt added. “As a state, we’ve done enormous amount of work on those projects, and I think that we need to more forward on them.”

The majority of the members of the Colorado basin roundtable, however, do not share Merritt’s view.

In its September comment letter on the water plan, the roundtable’s position was that it is “adamantly opposed to the concept of state endorsement of a project … before the completion of the final federal EIS.

“The sole purpose of this endorsement is to apply political pressure on federal permitting agencies. The state should not assume a role as a proponent of a water project until the state regulatory process has been completed and the project has been agreed to by the impacted counties, conservancy districts and conservation districts in the area which would be impacted by the project,” the roundtable stated.

James Eklund, the director of the CWCB, hails from a Western Slope ranching family. He often works to  add a touch of levity to otherwise serious-minded state-level water meetings.

James Eklund, the director of the CWCB, hails from a Western Slope ranching family. He often works to add a touch of levity to otherwise serious-minded state-level water meetings.

Get a little plan, Stan

In the face of still-uneasy Front Range-West Slope relations, Eklund, the head of CWCB, tried to bring a little levity to the Water Congress convention, which brings together water owners, developers and managers from all the basins in the state.

“Storage, as I said, needs 400,000 acre-feet more/where and how much, that’s our chore,” he rhymed, moving from his earlier Super Bowl analogies.

“Now these things cost money above our existing abilities/but the low hanging fruit is ground water storage and existing facilities.

“Governor Hickenlooper gave ag a shout-out in the state of the state/buy and dry is happening at too high a rate.

“For us to get 50,000 acre-feet in alternatives by 2030/we water lawyers and community have to get out hands dirty.

“The doctrine of prior appropriation is only as strong as we make it/so if we stop innovating I’m afraid they, public trust, will take it.”

The last line is a reference to two citizen initiatives that have been submitted for possible inclusion on the November ballot which would weaken Colorado’s “first in time, first in right” water laws and move the state’s approach to water administration toward a “public trust” system.

It’s fair to say the Colorado water industry sees the questions, and the threat of a public trust doctrine, as the equivalent of nuclear bombs. Or fourth-quarter interceptions run back for touchdowns.

And the Colorado Water Congress is working to tackle the questions before they reach the ballot in the first place, or to defeat them if they get put in front of voters.

In other words, welcome to the big game.

Editor's note: Aspen Journalism is collaborating with the Aspen Daily News and Coyote Gulch on water and rivers in Colorado and the West. The Daily News published this story on Super Bowl Sunday, Feb. 7, 2015.

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