Colorado Springs residents and other future users of the Southern Delivery System may get soaked for more than $200 million. That's what will happen if the Bureau of Reclamation gets its way in contract negotiations for the pipeline, which appear to involve anti-Springs shenanigans from the highest level of the United States Department of the Interior.
Utilities officials have told The Gazette's editorial staff they have great concerns about enormous fees proposed by the federal government and the burden those fees pose to ratepayers.
Springs Utilities is building a 50-mile pipeline from Pueblo Reservoir to Colorado Springs at approximately $2.3 billion, a figure that includes interest and all other costs over 40 years. To extract its water from the reservoir, Colorado Springs must negotiate a contract with the Bureau of Reclamation to use federal facilities at the dam.
Springs Utilities officials believe a fair price would be something in the neighborhood of $17.35 per acre foot of water it will use. That’s the amount Pueblo pays under a similar contract reached with the government in 2000, and that's the amount Pueblo will pay through 2025. Even if we adjust for inflation, which would still be unfair considering Pueblo's ongoing price, the value of $17.35 in 2000 is only $21.98 today.
But that’s not even close to what federal officials want. They’re demanding something more like $75 per acre foot, regardless of the sweet deal they made with Pueblo. Additionally, they want the cost of the SDS contract to increase by 3.08 percent each year. Meanwhile, Pueblo’s similar contract increases by 0.00 percent each year.
An article in the Pueblo Chieftain on Wednesday contained a telling tidbit. The article reported on a meeting Tuesday in which Springs Utilities officials tried to negotiate a better price with Michael Collins, area manager for the Bureau of Reclamation. Colorado Springs hired Joe Hall, a former area manager for the bureau, to analyze the federal government’s desired price. Hall said the justification for the high rate seemed “confusing and inconsistent.”
Collins replied to critics by saying that federal laws give Secretary of the Interior Ken Salazar broad discretion to set rates.
It’s no secret Salazar and his brother, U.S. Rep. John Salazar, whose district includes Pueblo, are not fans of the Southern Delivery System.
“I believe pressure from the top level of the Department of Interior is causing our regional director to negotiate this contract at unreasonable levels,” said former Springs Councilman David Sarton, a water law expert who served on the Southeast Colorado Water Conservancy District Board of Directors for 16 years until 2002. “With Ken Salazar running the Department of Interior, they have ultimate control.”
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It’s an intriguing theory, and one Secretary Salazar’s office denies. Though Collins appeared to pass responsibility to Salazar on Tuesday, Salazar’s chief spokesman passed it right back to Collins when questioned by The Gazette’s editorial department Wednesday.
“The secretary has had no involvement in the development of the rate proposal,” Interior spokesman Daniel DuBray wrote in an e-mail. “The Secretary has delegated this authority to the Bureau of Reclamation. The federal negotiating team, led by Mr. Michael Collins of the Bureau of Reclamation, developed the proposed rates for storage, conveyance, and exchange of non-federal water within the federally-owned facilities of the US Bureau of Reclamation’s Fryingpan-Arkansas Project.”
DuBray denied that his boss sides with Pueblo to spite Colorado Springs.
“It has been Secretary Salazar, more than any other elected or public official in recent memory, who has tried over the years to bring Pueblo and Colorado Springs together to work cooperatively on water issues,” DuBray wrote.
DuBray said federal officials typically aim high in the early stages of contract negotiations, then get reasonable.
“Negotiations by their very nature require give-and-take,” DuBray wrote.
In negotiating various permits for SDS, Colorado Springs has given tens of millions of dollars for the benefit of Pueblo and Pueblo County. But the federal government has no business giving bargain-basement contracts to Pueblo while trying to take exorbitant sums from Colorado Springs.
This contract should involve equal treatment, which means something in the ballpark of $17.35 per acre foot and no annual increase. Federal dam facilities belong to all of us, not just politically powerful Pueblo.