Six years after the application was filed, a judge has granted a water conservancy district in northwest Colorado a water right for a new dam-and-reservoir project that top state engineers had opposed.
Rio Blanco Water Conservancy District now has a 66,720 acre-foot conditional water right to build a dam and reservoir between Rangely and Meeker, known as the White River storage project or the Wolf Creek project. The conservancy district is proposing an off-channel reservoir with a dam 110 feet tall and 3,800 feet long, with water that will be pumped from the White River.
But the decree, while granting Rangely-based Rio Blanco the amount of storage it was seeking, doesn’t allow the district all the water uses that it initially wanted. The decree grants Rio Blanco a water right for municipal use for the town of Rangely; augmentation within its boundaries; mitigation of environmental impacts; hydroelectric power; and in-reservoir use for recreation, piscatorial and wildlife habitat. The conservancy district will not be able to use the water for irrigation, endangered fish or augmentation in the event of a compact call.
For more than five years, state engineers had argued that the project was speculative and that Rio Blanco couldn’t prove a need for the water. Engineers had asked the court to dismiss Rio Blanco’s entire application in what’s known as a motion for summary judgment. Division 6 Water Judge Michael O’Hara III agreed in part with state engineers and dismissed some of Rio Blanco’s requested water uses in an order filed Dec. 23. That left the fate of just three water uses to be determined at trial: Colorado River Compact augmentation, endangered fish and hydroelectric power.
After seeing his order, the parties asked O’Hara if they could postpone the trial, which was scheduled for Jan. 4, while they hammered out a settlement agreement. The final decree and a stipulation, filed Thursday night, cancel and replace O’Hara’s Dec. 23 order and let the parties avoid a trial.
“When you come to agreements, you are much more likely to live with those than having the judge force you to do things you didn’t really want to do,” O’Hara told the parties in a Dec. 31 conference call.
Both sides said they are happy with the terms of the decree. Conservancy district Manager Alden Vanden Brink said that after six years of working out issues, the decree brought a sense of elation and a sigh of relief to the community of Rangely. The district is very pleased with the final result, he said.
“Folks kept holding their breath,” Vanden Brink said. “And now we’ve got a step forward for drought resiliency.”
Settlement and stipulation
The main issue for state engineers, who were the sole remaining opposer in this case, was whether Rio Blanco could prove it needed the water. According to Colorado water law, new conditional water rights cannot be granted without a specific plan and intent to put the water to beneficial use. State engineers maintained that the conservancy district had not proven that water rights it already owned wouldn’t meet its demands.
But Rio Blanco said its existing water rights in their current locations were insufficient and that it needed a new reservoir on Wolf Creek to meet current and future needs. And district officials said they were wary of seeking to transfer these rights and uses to a new reservoir because that requires a water-court process whose outcome is not guaranteed; therefore they needed the new conditional storage right. Even if a water court approved the changes, Rio Blanco still said there was not enough storage in the White River basin to meet demands during a drought or for future uses.
State engineers and Rio Blanco disagreed about how much, if any, water Rio Blanco needed for Rangely, irrigation, endangered fish and other uses. Rio Blanco agreed to give up two of the three water uses left to be determined at trial: Colorado River Compact augmentation and endangered fish.
According to the decree, if Rio Blanco in the future is successful at moving any of their existing water rights to the Wolf Creek project, the same portion of water granted by the decree will be canceled, eliminating duplicate water rights in the reservoir.
A stipulation agreed to by both parties lays out further restrictions on the water use.
According to the stipulation, annual releases from the reservoir will be limited to 7,000 acre-feet for municipal and in-basin augmentation uses. Up to 20,720 acre-feet of water can be used for mitigation of the environmental impacts of building the project. But once the exact amount of water needed for future mitigation is determined, the difference between that amount and the 20,720 acre-feet will be canceled, reducing the total amount of water decreed.
State Engineer Kevin Rein said the final decree is a good outcome, reached in the spirit of cooperation. Even so, state engineers were never willing to compromise on giving Rio Blanco water for Colorado River Compact compliance.
“That’s something that we would have held fast on in trial and we held fast on discussing it with them,” Rein said. “It’s more a matter of something that does not legally occur right now with the state of Colorado water law.”
Rio Blanco had proposed that 11,887 acre-feet per year be stored as “augmentation,” or insurance, in case of a compact call. Releasing this replacement water stored in the reservoir to meet downstream compact obligations would allow other water uses in the district to continue and avoid the mandatory cutbacks in the event of a compact call.
Many water users in the White River basin, including the towns of Rangely and Meeker, have water rights that are junior to the 1922 interstate compact, meaning these users could bear the brunt of involuntary cutbacks. Augmentation water would protect them from that.
State engineers said augmentation use in a compact-call scenario is not a beneficial use under Colorado water law and is inherently speculative. This doesn’t seem to be a settled legal issue, and O’Hara said in his motion that he would not rule on whether compact augmentation was speculative.
“We believe the augmentation for compact compliance was very difficult to allow just due to the complexities of the Colorado River Compact and the Upper Colorado River compact, and it’s gratifying that Rio Blanco listened to us and we were able to get a final decree that didn’t include that component,” Rein said.
The water-right decree represents just the first step toward constructing the project, which will need approvals from federal agencies. Every six years, in what’s known as a diligence filing, Rio Blanco must show the water court that it is moving forward with the dam and reservoir in order to keep its water right. Fort Collins-based environmental group Save the Colorado has already said it will oppose the project.
Aspen Journalism is a local, nonprofit, investigative news organization covering water and rivers in collaboration with The Aspen Times and other Swift Communications newspapers. This story ran in the Jan. 9 edition of The Aspen Times.
Here’s the release from Governor Polis’ office (Chris Arend):
The State of Colorado, through the Department of Natural Resources, filed a complaint today in Colorado federal court challenging the approval of the U.S. Department of Interior, Bureau of Land Management’s (BLM) Resource Management Plan (RMP) for the Uncompahgre Field Office. The Uncompahgre RMP, finalized in April 2020, governs mineral extraction and other land use activities on federal lands spanning five counties in southwestern Colorado. The Colorado Department of Natural Resources (DNR) protested the proposed RMP in July 2019, and Governor Polis also submitted inconsistencies between the RMP and state policies, but those concerns were dismissed by the BLM in the final plan.
The State’s complaint details how William Perry Pendley, a BLM deputy director, violated the Federal Vacancies Reform Act (FVRA) when he improperly exercised the authority to resolve DNR’s protest while unlawfully occupying the role of the agency’s acting director. Resolving such protests is a responsibility reserved exclusively to the Secretary of Interior, a U.S. Senate-approved BLM Director, or a legitimate acting director nominated by the President.
Mr. Pendley’s appointment by Secretary David Bernhardt was never reviewed by the U.S. Senate and had extended beyond the legal 90-day limit for temporary officials at the time when the plan was finalized. Colorado’s lawsuit follows a recent ruling in a federal lawsuit in Montana that invalidated two RMPs and an RMP amendment that were approved based on a similar unlawful protest resolution by Mr. Pendley.
“The unfortunate fact is that if the Trump Administration had followed the law in appointing a Senate-confirmed nominee to lead the U.S. Bureau of Land Management, Colorado and other western states would not be in this predicament,” said Governor Jared Polis. “It is now Colorado communities and the State of Colorado who face unnecessary uncertainty and potential impacts to local recreation and outdoor industry jobs.”
“The Department of Natural Resources raised legitimate concerns in its protest that the final Uncompahgre RMP runs counter to Colorado’s goals to protect sensitive habitat for big game species and other wildlife, and reduce greenhouse gas emissions,” said Dan Gibbs, Executive Director, Colorado Department of Natural Resources. “The complaint provides facts demonstrating that these concerns were not addressed appropriately, and the approval of the plan by Pendley’s BLM was invalid. We are hopeful that the uncertainty caused by the questionable appointment can be clarified by the court so that Western Slope and Southwest Colorado communities can reliably plan for the future.”
Attorney General Phil Weiser said: “In Colorado, our public lands are critical to our quality of life and economy. Over the years, the Bureau of Land Management has taken a series of illegal actions in developing the resource management plan that harms and conflicts with our state’s policies. We are bringing this lawsuit to address those harms and safeguard public lands and wildlife in Colorado.”
The state’s argument that Pendley, the BLM’s “acting director,” did not have the authority to approve anything mirrors a federal case in Montana that overturned three resource-management plans.
Gov. Jared Polis didn’t like the Bureau of Land Management’s long-range management plan for the Uncompahgre Plateau, saying the expansion of oil drilling in the region did not jibe with state laws and regulations protecting water, air, wildlife and recreation.
And because the agency did not resolve those issues in its Resource Management Plan, Polis on Friday sued the BLM, as well as agency bureaucrat William Perry Pendley and Interior Secretary David Bernhardt, asking a federal judge to overturn the Resource Management Plan (or RMP) for nearly 680,000 acres of federal land in western Colorado.
The state is following the lead of Montana, arguing not just that the management plan conflicts with state laws, but that Pendley, who was never formally approved by the U.S. Senate as director of the BLM, did not have the authority to approve the RMP in April.
“The unfortunate fact is that if the Trump Administration had followed the law in appointing a Senate-confirmed nominee to lead the U.S. Bureau of Land Management, Colorado and other western states would not be in this predicament,” said Polis in a statement announcing the lawsuit. “It is now Colorado communities and the state of Colorado who face unnecessary uncertainty and potential impacts to local recreation and outdoor industry jobs.”
The final plan approved by Pendley was the first resource management plan approved under the Trump Administration’s “energy dominance” agenda to bolster domestic oil, gas and coal industries. It did not limit drilling in the North Fork Valley and expanded energy development across 675,800 acres of land and 971,200 acres of mineral estate in Montrose, Gunnison, Ouray, Mesa, Delta and San Miguel counties. And it did not weigh the state’s concerns about energy projects potentially injuring wildlife, habitat and air quality.
The preferred plan that was on track in the fall of 2019 — crafted after many years of BLM meetings and work with local communities — was replaced by a new Trump Administration alternative in the spring of 2020 that identified energy and mineral development as key planning issues alongside reducing regulatory burdens for extractive industries and economic development. The BLM said the plan would contribute $2.5 billion in economic activity to the region and support 950 jobs a year for the next two decades.
Earlier this month the BLM approved two oil and gas drilling projects in the North Fork Valley that allow up to 226 wells.
Colorado’s lawsuit, being handled by Colorado Attorney General Phil Weiser, says the plan’s conflicts with state laws were never resolved, so the approval should be overturned.
In 2020, the raft of bills passed by Colorado legislators in 2019 began altering the state’s energy story. Too, there was covid. There was also the continued movement of forces unleashed in years and even decades past, the eclipsing of coal, in particular, with renewables. Some Colorado highlights:
1) Identifying the path for Colorado’s decarbonization
Colorado in 2019 adopted a goal of decarbonizing its economy 50% by 2030 (and 90% by 2050).
The decarbonization targets align with cuts in greenhouse gas emissions that climate scientists warn must occur to reduce risk of the most dangerous climatic disruptions.
In September 2020, the Colorado Air Quality Control Division released its draft roadmap of what Colorado must do to achieve its targets. The key strategy going forward is to switch electrical production from coal and gas to renewables, then switch other sectors that currently rely on fossil fuels to electricity produced by renew able generation. But within that broad strategy there are dozens of sub-strategies that touch on virtually every sector of Colorado’s economy.
A core structure to the strategy is to persuade operators of coal-fired power plants to shut down the plants by 2030, which nearly all have agreed to do. It’s an easy argument to make, given the shifted economics. The harder work is to shift electrical use into current sectors where fossil fuels dominate, especially transportation and buildings.
It’s a lot—but enough? By February, environmental groups were fretting that the Polis administration was moving too slowly. During summer months, several members of the Air Quality Control Commission, the key agency given authority and responsibility to make this decarbonization happen, probed both the pace and agenda of the Polis administration.
This is from the Jan. 5, 2021, issue of Big Pivots, an e-magazine tracking the energy transition in Colorado and beyond. Subscribe at bigpivots.com
ohn Putnam, the environmental programs director in the Colorado Department of Health and Environment, and the team assembled to create the roadmap have defended the pacing and the structural soundness, given funding limitations.
Days before Christmas, the Environmental Defense Fund filed a petition with the Air Quality Control Commission. The 85-page document calls for sector-specific and legally binding limits on greenhouse gas emissions. It’s called a backstop. The proposal calls for a cap-and-trade system of governance, similar to what California created to rein in emissions. New England states also have used cap-and-trade to govern emissions from electrical generation. In this case, though, the emission limits would apply to all sectors. EDF’s submittal builds on an earlier proposal from Western Resource Advocates.
“The state is still far from having a policy framework in place capable of cutting greenhouse gas emissions at the pace and scale required—and Colorado’s first emissions target is right around the corner in 2025,” said one EDF blog post.
This proposal from EDF is bold. Whether it is politically practical even in a state that strongly embraces climate goals is the big question, along with whether it is needed. All this will likely get aired out at the Air Quality Control Commission meeting on Feb. 18-19.
2) Coal on its last legs as more utilities announce closures
It was a tough year for coal—and it’s unlikely to get better. Tri-State Generation and Transmission and Colorado Springs Utilities both announced they’d close their last coal plants by 2030. Xcel Energy and Platte River Power Authority had announced plans in 2018.
That will leave just a handful of coal plants operated by Xcel Energy puffing, but who knows what state regulators will rule or what Xcel will announce in 2021. It has a March 31 deadline to submit its next 4-year electric resource plan.
Meanwhile, Peabody, operator of the Twentymile Mine near Steamboat Springs, furloughed half its employees in May, partly because of covid, and in November announced it was considering filing for bankruptcy. If so, it will be the second time in five years.
It was an image from Arizona, though, that was iconic. The image published in December by the Arizona Republic, a newspaper, showed three 750-foot stacks at the Navajo Generating Station at Paige beginning to topple.
3) How and how fast the phase-out of natural gas?
Cities in California and elsewhere have adopted bans on new natural gas infrastructure in most buildings. Several states have adopted bans against local bans. Colorado in 2020 got a truce until 2022.
But the discussion has begun with a go-slow position paper by Xcel Energy and heated arguments from environmental hard-hitter Rocky Mountain Institute. It’s insane to build 40,000 new homes a year in Colorado with expensive natural gas infrastructure even as Colorado attempts to decarbonize its economy, Eric Blank, appointed by Polis in December to chair the PUC, told Big Pivots last summer. The PUC held an information hearing in November on natural gas.
State Sen. Chris Hansen, a Denver Democrat, sponsored a bill that would have created a renewable natural gas standard, to provide incentives to dairies and others to harness their methane emissions. The bill got shelved in the covid-abbreviated legislative session. Expect to see it in 2021.
4) Colorado begins effort to define a Just Transition
Colorado Gov. Jared Polis spent the first Friday in March in Craig and Hayden, two coal towns in northwest Colorado. Legislators in 2019 created an Office of Just Transition. The goal is to help communities and workers in the coal sector affected by the need to pivot to cleaner fuels create a glide path to a new future. No other state has the same legislative level of ambition.
There are many places in Colorado where the impacts of this transition will be felt, but perhaps no place quite as dramatically as in the Yampa River Valley of northwest Colorado.
Polis and members of the Just Transition team created by legislators spent the afternoon in the Hayden Town Hall, hearing from disgruntled coal miners, union representatives, and local elected and economic development officials. That very afternoon, the first covid case in Colorado was reported.
Legislators funded only an office and one employee. That remains the case. Some money will have to be delivered in coming years to assist workers and, to a lesser degree, the impacted communities. As required by law, a final report to legislators was posted in late December.
Legislators will have to decide whether the task force got it right and, if so, where the money will come from to assist workers and communities in coming years.
Meanwhile, in Craig, and elsewhere, the thinking has begun in earnest about the possibilities for diversification and reinvention. But it will be tough, tough, tough to replace the property tax revenues of coal plants in the Hayden, Craig, and Brush school districts.
For more depth, see the first and second stories I published on this (via Energy News Network) in August.
The question driving the upcoming investigation is whether Xcel customers, who represent 53% of electrical demand in Colorado, would be better served by shuttering this coal plant well ahead of its originally scheduled 2060-2070 closing.
6) Work begins on giant solar farm that will power steel mill
In October, site preparation work began on the periphery of Pueblo on 1,500 acres of land owned by Evraz, the steel mill, for a giant 240-megawatt solar farm. Keep in mind that nearby Comanche 3 has a generating capacity of 750 megawatts. Commercial operations will begin at the end of 2021.
Evraz worked with Xcel Energy and Lightsource BP to make the giant solar installation happen. The company expects the solar power to provide nearly all of its needs. See artist depiction on page 15. See August story.
7) A new framework for oil and gas and operations
Colorado’s revamped oversight of oil and gas drilling and processing continued with a new legislatively-delegated mission for the Colorado Oil and Gas Conservation Commission: protecting public safety, health, welfare, and the environment. The old mission: fostering development.
Guiding this is a new 5-member commission, only one of whom can be from the industry. The 2019 law also specified shared authority over oil and gas regulation with water and other commissions to also have say-so. And local governments can adopt more restrictive regulations.
The specifics of this came into sharp focus in November with 574 pages of new rules adopted after 10 months of proceedings, including what both industry and environmental groups called cooperative and collaborative discussions.
The new rules simplify the bureaucratic process for drilling operators, require that drilling operations stay at least four blocks (i.e. 2,000 feet) from homes; old regulations required only a block. The new rules also end the routine venting of natural gas.
The new rules likely won’t end all objections but the level of friction may drop because of the rules about where, when, and how.
8) Covid clobbers the drilling rigs and idles the pickups
Oil prices dove from near $60 a barrel in January to $15.71 in May. All but 7 drilling rigs in Colorado’s Wattenberg Field had folded by then, compared to 31 working a year before. Covid-dampened travel had slackened demand, and supply was glutted by the production war between Saudi Arabia and Russia.
Unemployment claims from March to November grew to 8,425, compared to 30,000 direct jobs in 2019. The full impact may have been 230,000 jobs in Colorado, given the jobs multiplier. Dan Haley, chief executive of Colorado Oil and Gas Association, at year’s end reported cautious optimism for 2021 as prices escalated and vaccines began to be administered.
Covid slowed the renewable sector, too, causing Vestas to announce in November it would lay off 185 from its blade factory in Brighton.
9) Utilities mostly hold onto empires—for now
Xcel Energy got a big win in November when Boulder voters approved a new franchise after a decade-long lapse while the city investigated creating its own utility. Black Hills Energy crushed a proposed municipal break in Pueblo. And Tri-State Generation & Transition stalled exit attempts by two of its three largest member cooperatives, Brighton-based United Power and Durango-based La Plata Energy, through an attempt to get jurisdiction in Washington D.C.
But there was much turbulence. Xcel lost its wholesale supplier contract to Fountain, a municipality. Canon City voters declined to renew the franchise with Black Hills. And Tri-State lost Delta-Montrose, which is now being supplied by Denver-based Guzman Energy, a relatively new wholesale supplier created to take advantage of the flux in the utility sector. Low-priced renewables have shaken up the utility sector – and the shaking will most certainly continue as the relationship between consumers and suppliers gets redefined.
10) Two utilities take lead in the race toward 100% renewables
Xcel Energy in December 2018 famously announced its intent to reduce carbon emissions from its electrical generation 80% by 2030 (as compared to 2005 levels), a pledge put into law in 2019. In 2020, nearly all of Colorado’s electrical generators mostly quietly agreed to the same commitment.
Meanwhile, several utilities began publicly plotting how to get to 100%. Most notable were Platte River Power Authority and its four member cities in northern Colorado. Holy Cross Energy, the electrical cooperative serving the Vail-Aspen, Rifle areas, announced its embrace of the goal in December. CEO Bryan Hannegan said the utility sees multiple pathways to this summit.
11) Gearing up for transportation electrification
You can now get a fast-charge on your electric car in Dinosaur, Montrose, and a handful of other locations along major highways in Colorado, but in 2021 that list will grow to 34 locations.
Colorado is gearing up for electric cars and trying to create the infrastructure and programs that will accelerate EV adoption, helping reduce greenhouse gas emissions from transportation, now the No. 1 source, while delivering hard-to-explain-briefly benefits to a modernized grid.
Also coming will be new programs in Xcel Energy’s $110 million transportation electrification program approved by the PUC just before Christmas. It creates the template going forward.
Now comes attention to medium- and heavy-duty transportation fleets. Easy enough to imagine an electrified Amazon van. How about electric garbage trucks?
Colorado and 14 other states attempted to send a market signal to manufacturers with a July agreement of a common goal of having medium- and heavy-duty vehicles sold within their borders be fully electric by mid-century. Of note: Other than Vermont, Colorado was the only state among the 14 lacking an ocean front.
Many await arrival of the first Rivian pickup trucks in 2021, while Ford is working on an electric version of its F-series pickup.
12) Disproportionately impacted communities
The phrase “disproportionately impacted communities” joined the energy conversation in Colorado in 2020.
In embracing the greenhouse gas reduction goals, in 2019, state legislators told the Air Quality Control Commission to identify “disproportionately impacted communities,” situations where “multiple factors, including both environmental and socio-economic stressors, may act cumulatively to affect health and the environment and contribute to persistent environmental health disparities.”
The law goes on to describe the “importance of striving to equitably distribute the benefits of compliance, opportunities to incentivize renewable energy resources and pollution abatement opportunities in disproportionately impacted communities.”
Specific portions of Air Quality Control Commission meetings were devoted to this. What this will mean in practice, though, is not at all clear.
A version of this was previously published by Empower Colorado. IT was published in the Jan. 5, 2020, issue of Big Pivots.