Negotiations for SDS water set for Tuesday

August 20, 2010

Colorado Springs Utilities and the U.S. Bureau of Reclamation will conduct their next round of public negotiations  involving multi-million dollar water storage contracts needed for the Southern Delivery System pipeline beginning Tuesday morning in Pueblo West.

The session is the fourth – and possibly final — in a series of talks over how much the utility should pay to store and convey water through Pueblo Reservoir. Although the utility has managed to whittle down the federal government’s demands, the two sides are still millions of dollars apart.

Reclamation wants Utilities to pay about $41.56 per acre foot to store and convey water in Pueblo Reservoir, or about $76.6 million, over the life of a 38-year contract. The utility has countered with an offer to pay $25.31 per acre foot, or about $38.3 million.

“We will continue to advocate for a fair and equitable rate for our customers,”  John Fredell, SDS project director, said Friday.

Reclamation’s demands have angered city officials, including Councilman Sean Paige.
“I think we have to hang tough and insist that the bureau present some tangible, verifiable method for how it comes up with its numbers. Its refusal to do so isn’t just arbitrary and capricious, it’s arrogant,” he said.

Utilities officials want to reach an agreement with Reclamation on pricing before construction begins on the 62-mile pipeline, which will transport water from Pueblo Reservoir to Colorado Springs. The first phase of the project is expected to cost roughly $2.3 billion in construction and financing costs over the next four decades.

The federal government  is a key player in the negotiations because Pueblo Dam is part of the federally owned Fryingpan-Arkansas Project, a complex series of dams, reservoirs, tunnels and conduits that deliver water from the Western Slope to the Front Range. The Arkansas River is the main delivery vehicle, and Pueblo Reservoir is the final reservoir in the system.

The entities that get to store water in the reservoir, how much water they can store, and whose water spills first in the event the reservoir is full are spelled out in complex rules and regulations.

Colorado Springs, as one of the original beneficiaries of the Fry-Ark Project, has 56,000 acre feet of what’s called firm storage in the reservoir. An acre foot equals 325,851 gallons of water, or enough to cover an acre with one foot of water.

What the utility is seeking through the current negotiations is the right to store an additional 28,000 acre feet under what’s called “excess capacity storage contracts,” if and when space is available.

Utilities’ SDS partners — Pueblo West, Security and Fountain — want similar contracts to collectively store an additional 14,000 acre feet of water.

Utilities officials believes they should get a better deal because Utilities is one of the original participants in the federal project and because Springs residents have contributed $68 million in property taxes to repay the government for construction and maintenance of the Fry-Ark facilities.

9 a.m. Tuesday. May continue at 9 a.m. Wednesday
Pueblo Shrine Club, 1501 West McCulloch Blvd., Pueblo West

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