Two Rivers Water Company files exchange and storage change cases in water court


Here’s the release from the Two Rivers Water Company (John McKowen):

Two Rivers Water Company ( announced today that it has filed two Colorado District Court, Water Division 2,Water Court applications in Pueblo, Colorado to irrigate farmland and for municipal, industrial, recreation, fire protection and other beneficial uses.

The first applicationwould allow Two Rivers to use water leased from Pueblo Board of Water Works to be stored in its reservoirs and used to irrigate farmlands in Huerfano and Pueblo County.

The second application would allow Two Rivers to use water diverted from the Huerfano River for irrigation to be stored in the Orlando Reservoir and other places upstream. In addition, itwould allow water to be used for municipal, domestic, industrial, agricultural, commercial, truck washing, stock watering, recreation, fish and wildlife, fire protection and other beneficial uses including augmentation, substitution and exchange. This application would permit Two Rivers to augment water supplies to the town of Gardner.

“The water court applications are another important step in the development of our business model, which is unique among publicly traded water companies,” stated John McKowen, Founder and Chief Executive Officer of Two Rivers.

“The exchange of water upstream to our reservoirs and ditch systems allow us to create jobs and economic growth in Huerfano and Pueblo counties at a more accelerated pace by putting water that otherwise would have to be released downstream to beneficial use first upstream for growing crops and augmenting municipal water supplies,” McKowen noted.“In particular, a water court application we filed for the Robert Rice ditch allows us to provide augmentation water to the town of Gardner, which could bein danger of losing its water supply,” he added.

McKowen noted that Two Rivers has a unique business model among publicly traded water companies in that it actively farms high-yield, irrigated farmland while also providingwholesale water for municipal, industrial and recreational use. Both farming and wholesale water are significantly demand driven in the current economic environment and provide excellent profit margins, McKowen said, adding thatone business benefits from the worldwide increase in the demand for food and the other benefits from the worldwide increase in the demand for water. In the western United States the two businesses are inextricably intertwined, McKowen noted.Two Rivers provides balance rather than the oftenseen,very intense competition for water between the agricultural and municipal communities, he said.

McKowen also pointed out that the symbiotic relationship between food and water allows Two Rivers to cover its overhead and generate profits from farming while its water business develops and establishes supply relationships.As a result, Two Rivers cansupport the development of its water business from irrigated farming and, in future years, provide support to water-short communities without permanently drying up prime farm land. Societally, McKowen noted, the Two Rivers business model provides a more holistic and sustainable solution to competing rural and urban interests.

Gary Barber, Two Rivers’ Chief Operating Officer and the architect of Two Rivers’ water strategy stated, “This is the first step of many whereby Two Rivers provides real solutions to water-short water districts along the southern portion of the Front Range of Colorado without buying and drying some of Colorado’s most productive farmland. As Chairman of the Arkansas Basin Roundtable, I have seen the tension build between smaller water districts trying to provide water to their communitiesandthose farming communities trying to sustainagriculture. Both need water.”

Barber noted, “Two Rivers’ water assets have a special character, most importantly 70,000 acre feet of storage which can be rehabilitated at 10% of the cost, and a small fraction of the time required to build new storage. We are ideally positioned to provide the ‘wet’ water solutions to both communities. It has been a problem we have been studying at the Roundtable for several years. “

In addition, Barber said, “When I was asked by Two Rivers to join its management team and saw how it had put together this unique “ag/muni” holistic business model with its unique assets, I saw it as a real opportunity to develop a public/private partnership that could genuinely serve the people of Colorado. Since joining Two Rivers in early 2010, I’ve been able to combine my water experience with the company’s entrepreneurial talent and build a unique enterprise that has many exciting opportunities ahead.”

More coverage from Chris Woodka writing for The Pueblo Chieftain. From the article:

Two Rivers’ plans call for creating about 38,000 acre-feet of storage in Cucharas and Orlando reservoirs. The company owns about 4,700 acres of land in ditch systems fed by the reservoirs, including the Huerfano-Cucharas Ditch. This year, about one-third of that will be planted as the company ramps up to full production, Barber said.

In a separate change-of-use application in water court, Two Rivers wants to dry up about 150 irrigated acres on the Robert Rice Ditch, but would change the use of the water only so it could be used in Huerfano County. Two Rivers purchased the ditch, which has a water right dating back to 1867, making it fairly senior.

Under the purchase agreement, as much as 130 acre-feet could be made available to serve future developments in Huerfano County. The water also could be used to augment existing wells in communities such as Gardner, Barber said.

“It’s not speculation, since we do have an agreement with the seller, but we did not file for the augmentation of any specific wells,” Barber said.

More Arkansas River basin coverage here.

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