Colorado Springs Utilities will book significant revenue from their supply deal with the Cherokee Metropolitan District


From The Colorado Springs Gazette (John Schroyer):

Utilities has been working on a deal with The Cherokee Water District, on the eastern edge of Colorado Springs, under which Utilities will deliver a minimum of 500 acre-feet of water per year. That could net up to $738,000 for the city next year, and as much as $900,000 in 2013. And the deal, as they say, is nearly sealed.

Cherokee relies mainly on groundwater [ed. Upper Black Squirrel designated groundwater basin], but as time goes on that source has been dwindling. In the past, Utilities has provided water to Cherokee on an emergency basis, but last April, the City Council gave Utilities the go-ahead to write up a contract that would grant Cherokee reliable water delivery.

On Wednesday, Utilities Water Services Division General Manager Wayne Vanderschuere presented the contract to the board. Under its terms, Cherokee has to pay Utilities at least $2.4 million next year for a minimum of 500 acre-feet of water service, with a cap of 1,000 acre-feet for $4.4 million. The price, which Vanderschuere said is expensive, is 9.32 cents per cubic foot. That price, however, can be reduced for Cherokee if it finds alternate sources for water, instead of buying directly from Utilities. Cherokee still would have to pay for delivery (i.e. use of Utilities’ piping system), but Utilities could save more water for its residential customers. The city’s share of the $2.4 million minimum is $400,529, and the maximum is $738,833. In 2013, the minimum would drop to $299,186, but the maximum would increase to $907,710.

Board President Scott Hente practically clapped his hands in delight. “It’s a win for all of us,” Hente said happily. “There are all kinds of things we could do with that money. We worked out a great deal.”

More Cherokee Metropolitan District coverage here and here.

CWCB: The goal of a grant approved Wednesday is to, ‘develop a consistent way to measure crop consumptive use,’ for ag water lease-fallowing change cases


From The Pueblo Chieftain (Chris Woodka):

The $279,000 study would develop a consistent way to measure crop consumptive use that can be transferred if the water is sold through lease programs such as the Arkansas Valley Super Ditch. Colorado Springs Utilities, Pueblo Board of Water Works and the Lower Arkansas, Upper Arkansas and Southeastern Colorado water conservancy districts will contribute $157,500 toward the study. They received an additional $121,500 from the Colorado Water Conservation Board, which approved a grant in Berthoud Wednesday. “The purpose of this project is not to transfer water via temporary leases, but make possible the water transfer by constraining costs, protecting other water rights from potential injury, maintaining agricultural economies and preserving the institutionalized and long recognized water court process,” said Todd Doherty of the CWCB staff…

The water groups want to develop a commonly accepted model that would look at how much water historically has been used to grow crops in the major agricultural areas of the Lower Arkansas Valley and how much flows off fields to be returned to the Arkansas River. Traditionally, those determinations have been made on a case-by-case basis in water court…

“The reason our district is involved in looking at these temporary transfers is because they could have deleterious effects on other water rights,” [Terry Scanga of the Upper Arkansas Valley Water Conservancy District] told the board. “This would provide a common platform so that transferrable use of water could be preserved. We’re looking at potential impacts, and that could reduce the costs of both objectors and applicants in water court.”

Click through and read the whole article, including the handy glossary of terms dealing with ag water transfers.

More Arkansas River basin coverage here.

The Niobrara shale play, horizontal drilling and new hydraulic fracturing technology spurs frenzied oil and gas mineral right leasing activity up and down the Front Range and points south


Here’s a report about leasing activity in the Lower Arkansas River basin from Anthony A. Mestas writing for The Pueblo Chieftain. Click on the thumbnail graphic to the right for the Chieftains’s rendering of 2010 permitting activity from the Colorado Oil and Gas Conservation Commission. Click through and read the whole article. Here’s an excerpt:

The courthouses in Bent, Prowers and Kiowa counties have been inundated the past few months with land firms researching mineral rights and offering leases to landowners for unnamed oil companies, officials in the three Lower Arkansas Valley counties confirmed Wednesday. “There probably are 20 to 25 land men here every single day,” Bent County Clerk and Recorder Patti Nickell said. “They are researching the land so that they can offer leases to the landowners.”

Officials in all three counties said they are unaware of any type of proposed oil drilling operations in the area and do not know which oil companies are behind the research effort…

Nickell said a steady stream of land men began arriving in Bent County in June. “It has increased, increased, increased. These are land people who work for oil companies,” Nickell said…

“We are certainly willing to cooperate with the oil and gas exploration and any permitting that would be necessary in Prowers County. We see that as a resource that would help the county financially as well as employ people and give a stimulus to the local economy,” [Prowers County Commissioner Gene Millbrand] said.

More coverage from Peter Strescino writing for The Pueblo Chieftain. From the article:

Vince Matthews, state geologist and executive director of the state Geological Survey, said while Pueblo County sits on the Niobrara Formation, it is too shallow here. A perfect example of this is at Lake Pueblo, where the formation’s layers are totally exposed. “To be productive, it’s got to be about a mile deep,” he said. “In Pueblo, it’s too close to the surface and even eroded away.”

While Pueblo probably will never be considered a production site, Prijatel agreed there will be considerable economic expansion around the Wattenberg Field exploration. “Wherever something happens, that’s where people go,” he said. “Look at North Dakota. There’s a boom, there’s a need for housing, there’s jobs. Even motel workers will be making $20 an hour because of the demand. “People are spending a lot of money.”

More oil and gas coverage here and here.