From the Fort Collins Coloradoan (Ryan Maye Handy):
Without changes to its water rates, Northern Water’s expenses are on track to exceed its revenue in 2015. At its monthly meeting on Thursday, the board reviewed a study it commissioned to outline options for future water-rate hikes.
Northern Water released the rate study on Tuesday, and several water district managers and lawyers asked the board on Thursday to postpone its decision until they had more time to review the massive document.
The board also postponed a decision to set the water rates for 2015, which will likely increase by 9 percent for all stakeholders…
Northern Water plans to raise the cost of Colorado-Big Thompson or CB-T shares, which many districts rely on for most of their water. Regardless of the board’s ultimate decision, water rates will increase for Fort Collins Utilities, which gets about half of its water from the Big Thompson. Utilities costs for Fort Collins customers will not be affected, a city official previously said.
The rate study, done by CH2MHill in Denver, came up with three options for rate changes, all of which would double or triple the costs of water for farmers and cities alike.
At its Thursday meeting, the board eliminated one option, which would keep the existing rate system.
In June, the board will decide between the two remaining options, which could turn out to be drastically different after 10 years, according to CH2MHill’s research:
• One option could mean a sharp increase in water rates. For municipalities and industrial clients, at most, one unit of CB-T water would jump from $28 per acre foot to $51.90 per acre foot by 2016. For irrigators, this increase would bump the cost from $10 to $18.70 per acre-foot.
• The other model would likely mean a more gradual increase. By 2016, this option would bump municipal and industrial rates to $49.10 and irrigation rates to $20.90 per acre foot.
Only those who own fixed-rate contracts would escape the proposed changes. Fixed-rate allotments were created in 1957 and set at $1.50 per acre-foot. The city of Fort Collins owns 6,052 fixed-rate units among its 18,885 total units of CB-T water.
Several water district managers asked the board to reconsider the fixed-rate contracts and allow them to absorb some of the costs of modern water operations.
Dennis Jackson, who worked on the rate study for CH2MHill, cautioned that a volatile economy could drastically change some of the study’s findings. While a strong economy would make rate hike unnecessary, a weaker economy would likely mean more increases in the future, he told the board.
“If for some reason the economy were to stall, and if we had conditions that were sluggish and not as forecasted, assessments would need to be higher, 15 to 20 percent higher,” Jackson said.
More Northern Colorado Water Conservancy District coverage here.