From the Northern Colorado Business Report (Steve Porter):
The rule, proposed by the district’s board of directors, is intended to keep cities and towns and others with C-BT water rights from selling the water for use outside the district. In this case, that means selling it to oil-and-gas companies or water haulers who intend to use it on hydraulic fracturing – or fracking – operations in the region. Federal and state laws prohibit the use of C-BT water outside the district, but oil-and-gas companies and the water haulers who serve them have been eagerly buying water from any source available to them.
Brian Werner, Northern spokesman, said the rule was proposed because the district has been contacted by some of the 33 communities it serves about whether selling C-BT and Windy Gap Project water is allowed under their contracts. “My guess is the vast majority of them have been approached by water haulers,” he said…
Northern’s proposed rules explicitly target the use of C-BT and Windy Gap water: “The use of C-BT Project water and the first use of Windy Gap Project water as well development water cannot and shall not be made for any oil or gas well located outside the boundaries of Northern Water or the Subdistrict.” The proposed rule also calls for the water supplier – city, town or other possessor of C-BT or Windy Gap water – to keep strict accounting records to assure that the water is being beneficially used within district boundaries. Penalties for violating the rules would include the water supplier being fined $500 per acre-foot of C-BT and Windy Gap water illegally delivered to a water hauler. Other possible corrective actions include requiring water suppliers to provide a replacement water supply to Northern Water or the subdistrict…
Werner said Northern’s board will take the matter up again at its Jan. 13 meeting. He said written comments can be submitted through Jan. 3…
While the city of Greeley has become one of the region’s biggest suppliers of water to the oil and gas industry, Longmont, Loveland, Fort Lupton, Frederick and Firestone are also reportedly selling water.
Jon Monson, Greeley’s water and sewer director, said the city has been selling surplus water to the oil-and-gas industry for the last five years, an amount that held relatively steady through 2010 but which jumped by 50 percent this year. “This extra revenue can lower the bond costs and the amount of bonds we need to issue,” he said. “This lowers the cost of the bonds to the ratepayers and will cut down future water bills.”
Here’s the announcement (including to proposed rule) from Northern Water.