From The Colorado Springs Gazette (Eileen Welsome):
The session is the fourth – and possibly final — in a series of talks over how much the utility should pay to store and convey water through Pueblo Reservoir. Although the utility has managed to whittle down the federal government’s demands, the two sides are still millions of dollars apart. Reclamation wants Utilities to pay about $41.56 per acre foot to store and convey water in Pueblo Reservoir, or about $76.6 million, over the life of a 38-year contract. The utility has countered with an offer to pay $25.31 per acre foot, or about $38.3 million. “We will continue to advocate for a fair and equitable rate for our customers,” John Fredell, SDS project director, said Friday…
Utilities officials want to reach an agreement with Reclamation on pricing before construction begins on the 62-mile pipeline, which will transport water from Pueblo Reservoir to Colorado Springs. The first phase of the project is expected to cost roughly $2.3 billion in construction and financing costs over the next four decades.
The federal government is a key player in the negotiations because Pueblo Dam is part of the federally owned Fryingpan-Arkansas Project, a complex series of dams, reservoirs, tunnels and conduits that deliver water from the Western Slope to the Front Range. The Arkansas River is the main delivery vehicle, and Pueblo Reservoir is the final reservoir in the system. The entities that get to store water in the reservoir, how much water they can store, and whose water spills first in the event the reservoir is full are spelled out in complex rules and regulations.
Colorado Springs, as one of the original beneficiaries of the Fry-Ark Project, has 56,000 acre feet of what’s called firm storage in the reservoir…What the utility is seeking through the current negotiations is the right to store an additional 28,000 acre feet under what’s called “excess capacity storage contracts,” if and when space is available.
More coverage from Chris Woodka writing for The Pueblo Chieftain. From the article:
A little more than a month ago, Colorado Springs Utilities asked the U.S. Bureau of Reclamation for quick action on its proposal for rates for contracts associated with SDS. But in that month, letters from Colorado Springs Councilman Tom Gallagher to Interior Secretary Ken Salazar have brought up concerns about how the proposed pipeline from Pueblo Dam to El Paso County was evaluated and the costs to Colorado Springs residents…
Tuesday’s session will be in Pueblo West, a community caught in the crossfire over SDS since it joined the project three years ago. Pueblo West hopes to tap into the proposed pipeline as it travels 50 miles from Pueblo Dam to serve Colorado Springs, Fountain and Security. The connection would expand the capacity of its water system from 12 million gallons per day — a figure already nearly reached on the hottest summer days — by 18 million gallons per day. The pipeline could carry 78 million gallons per day to El Paso County, and there have been discussions about letting other communities to the north use the pipeline when space is available. Colorado Springs has not made any deals, however, and would require any future users to secure their own contracts with Reclamation and comply with all Pueblo County 1041 regulations. Pueblo West needs the higher capacity to serve the number of homes that could be built one day…
As for the contract itself, Reclamation last offered to store and convey water for SDS at $41.56 per acre-foot annually, the rate Aurora pays less a 10 percent discount because all of the pipeline participants are members of the Southeastern Colorado Water Conservancy District, which serves the Fryingpan-Arkansas Project. Colorado Springs last offered to pay $25.31 per acre-foot annually, with an annual adjustment fee of 1.79 percent, about 1 percent lower than Reclamation’s proposal. SDS would use 42,000 acre-feet of excess-capacity storage in Lake Pueblo over a 40-year period: Colorado Springs, 20,000 acre-feet increasing to 28,000 acre-feet over the first 10 years; Pueblo West, 10,000 acre-feet; Fountain, 2,500 acre-feet; and Security, 1,500 acre-feet. Colorado Springs also is requesting an exchange of up to 10,000 acre-feet annually from Pueblo to Turquoise and Twin Lakes, where it could use water through the Homestake Project’s Otero pipeline and pumping station. Colorado Springs would trade space in the Fountain Valley pipeline to Fountain for space in the SDS pipeline.
More Southern Delivery System coverage here and here.